An economist gather empirical data to test the proposed relationship between money and the price level by gathering data on past changes in the money supply and note the resulting changes in the price level.
<h3>Further explanation </h3>Economists cannot study complex relationships using data because they are unlike the researchers in the hard sciences that can run a controlled laboratory experiment for the generation of data to test the theories and relevant models. An economist would look for data on past changes in the money supply, and note the resulting changes in the price level
An economist can develop models and theories to provide a description of the world based on observed phenomena, because there is a close association between price and money.
Economists do not usually develop theoretical models of the economy but they only analyze the summary statistics about the current state of the economy. An economist would persuade the Federal Reserve to change the money supply to various levels, and also observe the resulting changes in the price level.
An economist supposed to believe that the price level in the economy is directly related to the money supply or the amount of money circulating in the economy. The following relationship is applied to that condition:
, where
P = Price Level
M = Money Supply
A = A composite of other factors including real GDP that change very slowly over time.
<h3 /><h3>Learn more</h3><h3>Answer details</h3>
Grade: 9
Subject: business
Chapter: relationship between money and the price level
Keywords: price level, money
Answer:
$76,620.83
Explanation:
According to the scenario, computation of the given data are as follows
Future Value (FV) = $100,000
Rate of interest = 10% yearly
Rate of interest (Rate) = 10%÷ 2 = 5% semiannually
Number of period (Nper) = 9 × 2 = 18
Face value = $100,000
Payment (pmt) = $100,000 × (6%÷2) = $3,000
By putting the value in excel present value formula, we get,
PV = $76,620.83
Attachment is attached below
Answer: 17.56%
Explanation:
Given that,
Leonardo taxable income = $90,000
Tulsa bonds = $8,750
Theresa taxable income = $50,000
Computation of Leonardo's Tax:
According to the tax rate schedule,
Total Tax = Tax + 24% of taxable income over $82,500
= $14,089.50 + 24% × $7,500
= $14,089.50 + $1,800
= $15,889.5
Computation of Theresa's Tax:
According to the tax rate schedule,
Total Tax = Tax + 22% of taxable income over $38,700
= $4453.50 + 22% × $11,300
= $4453.50 + $2,486
= $6939.5
Total tax on Leonardo's income and Theresa's income:
= $15,889.5 + $6939.5
= $22,829
Effective tax rate =
=
= 17.56%
Answer:
Yes it should as the net present value at the firm WACC is positive $ 4,156.54
Explanation:
we are given with the after-tax cost for the machine and after-tax cost of the labor cost savings the new machine will provide
So we should check if the present value of the savings is greater or equal than the machine cost:
C $ 8,000
time 10 years
rate=WACC= 0.1
PV $49,156.5368
Net present value:
inflow - cost
49,156.54 - 45,000 = 4,156.54