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Oksana_A [137]
3 years ago
8

The difference between the nominal interest rate and the real interest rate is

Business
2 answers:
leonid [27]3 years ago
8 0

Answer: the correct answer is letter D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation: in financial maths when you speak about "real" rates you should consider the inflation impact.

anyanavicka [17]3 years ago
8 0

Answer:

D. the nominal interest rate is the stated interest rate whereas the real interest rate is the nominal interest rate minus the inflation rate.

Explanation:

The nominal interest rate is that interest rate that is advertised by the financial institutions either as interest on loan or deposit. Since it is the interest rate stated in financial instruments like the ones quoted on bonds, it is also seen as the stated interest rate.

The real interest rate is the interest rate which has been adjusted to remove the effect of inflation. That is, to get the real interest rate, take the nominal interest rate and subtract the inflation rate. therefore, we can use the following formula.

Real Interest Rate =  Nominal Interest Rate - Inflation Rate.  

In fact the real interest rate can be sen as the real cost of borrowing money.

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The aggregate demand curve is downward sloping because
SSSSS [86.1K]

Answer:

D. an increase in the price of a good causes a decrease in market demand for that good.

Explanation:

First, if prices decrease, then people will feel wealthier and consume more and the aggregate demand increases. (Pigou´s effect)

Second, if interest rates decrease available domestic investors will  invest in foreign countries where return (interest rates]) on investments are higher. If domestic investors invest in foreign countries the supply of dollars will increases. This will decrease the real exchange rate and then exports will be affected in a positive way; exports will increase and thus the aggregate demand.

Third, when the price level is down, consumers demand less currency, which means that they will keep more money in their bank accounts. If banks have more money, then the interest rate for loans decrease.  If interest rates decrease, the cost of investment decreases too. Then, if the price for investment decreases, the demand for it increases and the aggregate demand decreases too.

3 0
4 years ago
Kramer Corporation recently announced that its net income (EAT) was lower than last year. However, analysts estimate that the co
SVETLANKA909090 [29]

Answer:

When you are preparing the cash flow statement, some adjustments are made that actually increase the cash flow even if the net income has decreased, for e.g.:

  • lower accounts receivables
  • lower inventories
  • higher depreciation and amortization expenses
  • higher accounts payables and accruals
  • sale of investments
  • new long term debt
  • less dividends distributed
  • new capital raised

8 0
3 years ago
What will an executive summary for a new business contain that a business plan for a well-established business will not?
Setler [38]
Hello,

The answer is option A "a mission statement".

Reason:

The answer is option A because the mission statement pretty much tells the goals of the business. Its not option B because every executive summary must include funding's on its products (to show if they raised prices or sales). Its not option C because every businesses wants to grow in order to make more money (by making more stores). Its also not option D because every summary will have the information about the newest products and services for there business.

If you need anymore help feel free to asks me!

Hope this helps!

~Nonportrit
3 0
4 years ago
Read 2 more answers
How does the book value of shares of stock differ from the market value of shares of stock? Use a real-world example in your ans
Ad libitum [116K]

Answer:

The book value of the stock can be calculated by taking the difference of assets and liabilities and then dividing the answer by the number of shares. The result will be the book value of a unit stock. Whereas the market value of the share is different because the stock market valuates the stock which is dependent on its assets, return, riskiness of the industry, social responsibility, etc. So these factors helps companies like S & P global, Dow's plc, etc to value stocks and publish the credit ratings of companies in stock exchange.

Explanation:

The market value of Home Depot is $243 in the stock exchange but the equity book value of is at deficit which is -$1878 millions. Dividing it by number of shares we have -29 ($1878 millions / 6,3.8 million shares). The book value of the company is negative but still the company has a great number of profits for the year and the company is worth $300 billions.

3 0
3 years ago
Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000. The franchise agreement allows Charco to sell
denis-greek [22]

Answer:

$40,000.

Explanation:

Given that Charco purchased a franchise from Burger Master on January 1, 2021, for $240,000

Useful life of Franchise = 6 years

Cost = $240,000

Yearly amortization expense = cost/useful life

                                                = $240,000/6

                                                = $40,000

The amortization expense for the year ended December 31, 2021 is $40,000. This is the yearly charge to p/l for the Franchise.

3 0
3 years ago
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