With the real money supply held constant, the theory of liquidity preference implies that a higher income level will be consistent with a higher interest rate
.
Option A
<u>Explanation:
</u>
The choice for liquidity in economic theory is money demand, which is seen as liquidity. In his novel The Central idea of Jobs, Interest, and Money, John Maynard Keynes created this concept to illustrate the determining of interest rates by market forces for money.
In practical terms, the faster the asset has become currency, the more liquid it becomes. The liquidity selection theory refers to cash demand as calculated by liquidity.
Example: a Treasury bill could pay a 2% interest rate, a Treasury bill of 10 years might pay a 4% interest rate, a Treasury bond of 30 years might pay a 6% interest rate. To order for a higher rate of return for the lender to surrender equity, they must agree that cash is stuck for a long period of time.
Answer:
because math makes people sad
Explanation:
Answer:
The correct option is D
There is increase in ROE by 2.86%
d. 2.86%
EXPLANATION:
THIS IS THE COMPLETE QUESTION BELOW;
Last year Swensen Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $195,000. The debt-to-total-assets ratio was 27%, the interest rate on the debt was 8.2%, and the firm's tax rate was 37%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROE change in response to the change in the capital structure?
a. 2.08%
b. 2.32%
c. 2.57%
d. 2.86%
e. 3.14%
CHECK THE ATTACHMENT BELOW FOR DETAILED EXPLANATION
In long-run equilibrium, monopolistically competitive firms will have excess production capacity.
What is Monopolistic Competition?
When a large number of businesses provide competitive goods or services that are comparable but imperfect substitutes, monopolistic competition exists.
A monopolistic competitive industry has minimal entry requirements, and decisions made by any one firm do not immediately affect those of its competitors. The price and marketing choices made by the competing companies serve as their points of difference. Between a monopoly and perfect competition, monopolistic competition exists, combines aspects of both, and comprises businesses with comparable but distinct product offerings. Industries with monopolistic competition include those in restaurants, hair salons, household goods, and clothes.
To know more about monopolistic competition refer:
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Answer:
C. a public good
Explanation:
Oil and gas reserves are the public good
Since , Oil and Gas reserves belongs to the property of the nation and the license to drill them are controlled only by the government .
The oil and gas reserves are both non-excludable and are non- rival.
Excludability means the nature of the use of a goods or services .
