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3 years ago

Which of the following policies should a country implement in an economic downturn to avoid a Paradox of Thrift?

Business

1 answer:

zalisa [80]3 years ago

5 0

Answer:

B) Implement policies to encourage greater consumption.

Explanation:

The Paradox of thrift says that an increase in autonomous saving leads to a decrease in aggregate demand and thus a decrease in gross output which will, in turn, lower total saving due to that total saving may fall because of individuals' attempts to increase their saving, Therefore, to avoid the paradox of thrift policies to encourage consumption must be implemented.

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Nervous Norman holds 70% of his assets in cash, earning 0%, and 30% of his assets in an insured savings account, earning 2%. The

elena-14-01-66 [18.8K]

Answer: 0.6%

Explanation:

The expected return is a weighted average of the returns of the assets invested in.

70% is invested in cash which earns 0%

30% is in a savings account earning 2%

Expected return = (70% * 0%) + (30% * 2%)

= 0% + 0.6%

= 0.6%

6 0

3 years ago

West Corp. issued 25-year bonds two years ago at a coupon rate of 5.3 percent. The bonds make semiannual payments. If these bond

Nataliya [291]

Answer:

YTM is 4.94%

Explanation:

The yield to maturity is the return on the bond throughout the bond's tenure and can be computed using rate function in excel as shown below.

=rate(nper,pmt,-pv,fv)

nper is the number of coupons the bond has left to pay(23 years*2)

pmt is the semiannual coupon of the bond=$1000*5.3%*6/12=26.5

pv is the curren price=$1000*105%=$1050

fv is the face value of the bond

=rate(46,26.5,-1050,1000)=2.47%

2.47% is the semiannual yield

annual yield=2.47% *2=4.94%

7 0

2 years ago

uppose you buy a bond with a coupon of 7.8 percent today for $1,080. The bond has 5 years to maturity. Assume interest payments

Mariulka [41]

Answer:

45.58%

Explanation:

Rate of return is the expected gain or loss on an investment, over a specific time period. It is derived as a percentage of the investment's original value or cost.

ROR = [CV - IV]/ IV × 100

CV is the current value of the investment (value at the end of the investment period)

IV is the initial value of the investment.

Note also, the assumption that interest payments are reinvested.

At the end of year 1, interest payment is $1,164.24

End of year 2 - $1,255.05

End of year 3 - $1,352.95

End of year 4 - $1,458.48

End of year 5 - $1,572.24

[Interest rate - 7.8%]

ROR = (1572.24 - 1080)/1080 × 100

ROR = 45.58%

5 0

3 years ago

erastova [34]

Answer:A

Explanation:

3 0

2 years ago

Factory Overhead Volume Variance Dvorak Company produced 5,100 units of product that required 3.5 standard hours per unit. The s

AveGali [126]

Answer:

$2,250 Favourable

Explanation:

Calculation to determine the fixed factory overhead volume variance

Fixed factory overhead volume variance=$2.50 × [18,750 hrs. – (5,100 units × 3.5 hrs.)]

Fixed factory overhead volume variance=$2.50×[18,750 hrs. – 17,850 hrs]

Fixed factory overhead volume variance=$2.50×900

Fixed factory overhead volume variance=$2,250 Favourable

Therefore the fixed factory overhead volume variance will be $2,250 Favourable

5 0

2 years ago