M1 money growth in the US was about 16% in 2008, 7% in 2009 and 9% in 2010. Over the same time period, the yield on 3-month Treasury bills fell from almost 3% to close to 0%. Given these high rates of money growth, why did interest rates fall, rather than increase? What does this say about the income, price level and expected-inflation effects?
Higher money growth (increase in the money supply) should have the following effects:
Liquidity effect indicates that this growth in money should shift money supply to the right, which should decrease the interest rate.
Income effect indicates that the growth in money should increase income levels, which should increase the demand for money and shift the demand curve to the right. This should increase the interest rate.
The price level effect indicates that the growth in money should increase price levels, which should increase the demand for money and shift the demand curve to the right. This should also increase the interest rate.
During this time period, unemployment was high, economic growth was weak and policymakers were more concerned with deflation than they were with inflation.
Therefore, the expected inflation effect was almost non-existent (due to the concerns with deflation) and the liquidity effect dominated all other effects, which made interest rates fall.
<span>This is illustrated with the first graph on slide 32 of the Theory of Money Powerpoints.</span>
Answer:
The correct answer is E
Explanation:
Adaptive task performance usually acknowledged as the adaptability, which is comprise of the employee responses to the task demands that are unusual, novel or very least or unpredictable.
It involves such behaviors handling the crises or the emergencies situation or circumstances.
So, in this case, Jamie, the police officer suspect scene of store robbery and the suspect ran and other officer arrived on the scene and take him down. Later, the Jamie state the situation to family and this is an example of adaptive task performance.
Answer: 8.23%
Explanation:
Firstly, we will calculate the cost of debt which will be:
= Yield (1-Tax rate)
= 9% × (1-0.34)
= 9% × 0.66
= 5.94%
Then, the Cmcost of preferred stock will be:
= 7/(104-9.40)
= 7/(94.6)
= 7.39%
We will also get the value of the cost of equity which will be:
= (Dividend expected common/Price common) + growth rate
= (2.50/76) + 8%
= 3.29% + 8%
= 11.29%
For Debt:
Cost after tax: 5.94
Weight = 50%
Weighted cost = 5.94 × 50% = 2.97
For Preferred stock:
Cost after tax: 7.39
Weight = 1%
Weighted cost = 7.39 × 10% = 0.74
For Common equity
Cost after tax: 11.29
Weight = 40%
Weighted cost = 11.29 × 40% = 4.52
Weighted average cost of capital = 2.97 + 0.74 + 4.52 = 8.23%
Answer: Tactical plan
Explanation: In simple words, tactical planning refers to the segmentation of strategic planning in shorter time periods. It focuses on determining the course of actions for departments of an organisation but for a short time period.
In the given case, Kyle is estimating various requirements of the organisation for next six months.
Hence from the above we can conclude that she is creating tactical plan.
An agreement containing mutual promises. Workers on a building are guaranteed that their contractors will pay them at the end of each month.
<h3><u>How do bilateral contracts work?</u></h3>
A bilateral contract is a <u>legally binding arrangement</u><u> between two parties wherein each exchanges commitments to carry out and execute </u><u>one-half of a deal</u>. Because it makes both parties into what is known as an "obligor," or a person or party who is bound to another, this contract form is one of the most often utilized binding agreements.
Due to their widespread usage, sales contracts and bilateral contracts are frequently used interchangeably. An obligor has violated the bilateral agreement if they don't carry out their obligation (and of course, vice versa).
Learn more about Bilateral Contract with the help of the given link:
brainly.com/question/14892242?referrer=searchResults
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