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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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The LIBOR scandal in 2012 involved a. banks reporting inflated earnings from their loans. b. hackers breaking into the loan docu

stepladder [879]

Answer:

C) banks falsely reporting the interest rates they offered in the interbank market.

Explanation:

The LIBOR rate is used all over the world to set banking interest rates. it reflects the cost of interbank loans. The LIBOR was used as a benchmark to charge interest rates to clients around the world, e.g. LIBOR + 2%.

The scandal involved many major banks, e.g. Deutsche Bank, Barclays, UBS, Rabobank, HSBC, Bank of America, Citigroup, JPMorgan Chase, the Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds, WestLB, Royal Bank of Scotland, and a long list of etc.

What the banks did was artificially manipulate the LIBOR rate by increasing or decreasing it to show artificial profits from trading activities. When the manipulation was discovered, it had been going on for at least 7 years, and some believe it started earlier.

4 0

3 years ago

Which statement is the best description of a price‑taker as it pertains to perfect competition?

Nesterboy [21]

Answer:

The correct answer is letter "A": Mary Beth grows cotton. She finds that she can always sell her entire crop at the market price. However, if she asks a price that is even slightly higher she cannot sell any of her cotton.

Explanation:

Perfect Competition is a market where competition is at the highest degree possible. Perfect competitive markets have the following characteristics:

All companies sell the same goods or services.
All companies are price takers.
All firms have relatively small market shares.
Buyers have full product and price information.
The industry is characterized by low or no barriers to entry and exit of the industry.

Thus, in Mary Beth's case, she cannot ask for a different price than the one of the market because in a perfectly competitive market it is controlled by supply and demand. Companies cannot set the price.

8 0

3 years ago

In business, the four basic forms of competition are

dalvyx [7]

Perfect competition, monopolistic competition, oligopoly, and monopoly.

7 0

4 years ago

7. Kraft Company expects to give a dividend of $2 next year. Dvidend increases by 4 per cent require a 12% return. What will be

Nat2105 [25]

Answer:

$28.125

Explanation:

Dividend D1= $2

(Dividend is given at the end of 1 year)

Growth g= 4% or 0.04

Required Return r = 12% or 0.12

Step1- Share price of company A today

As per Dividend Growth Model

Share price =Expected dividend/(required return - growth rate)

S0 = Do(1+g) / (r-g)

S0 = D1/(r-g)

S0 = 2/(0.12-0.04)

S0 = $25

Therefore share price of company A today for given details will be $25

Step2 - Expected dividend at the end of 3 years

D4=D0(1+g)^4

( as we already have D1 which is one time growth multiplied, therefore to find dividend at the end of 3rd year we will multiply 1 Less growth multiplier to D1)

D4= D1(1+g)^3

D4 = 2(1+0.04)^3

D4 = $2.25

Step3 - Share price of company A in 3 year

Share price =Expected dividend/(required return - growth rate)

S3 = D4/(r-g)

S3 = 2.25/(0.12-0.04)

S3 = $28.125

Therefore share price of company A in 3 years for given details will be $28.125

7 0

3 years ago

g If Warren Buffet can beat the market using value investing, then... Group of answer choices the market is semi-strong form eff

vova2212 [387]

Answer: The market is weak form efficient

Explanation:

Weak form markets are markets in which stocks are said to incorporate all past information in their prices. Investors who believe that the market is at weak form efficiency believe that since the stock contains past information, using the current information in the company's books to determine if the company is overvalued or undervalued is possible (fundamental analysis).

Warren Buffet's Value Investing means that he invests in stocks that he believes to be undervalued and sells them for higher or holds them when they appreciate. This is consistent with fundamental analysis. If Warren Buffet is beating the market by investing in undervalued stock then the market is indeed weak form efficient.

3 0

3 years ago