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Marina86 [1]
3 years ago
6

There are two aspects of efficiency that the equilibrium of market for loanable funds exhibits. Select the TWO statements that c

haracterize these two aspects of efficiency. a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money. b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing. c. Investment projects that are financed have smaller rates of return than projects not receiving financing. d. All potential savers lend money. e. Savers who lend money are willing to accept a higher minimum interest rate than potential savers who do not lend money. f. There is always a small surplus of funds in the market.
Business
1 answer:
Mashutka [201]3 years ago
5 0

Answer:

a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.  

b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.  

Explanation:

Loanable funds refer to the aggregate amount of money that all sectors, entities and individuals within an economy have decided to keep as an investment, instead of spending on personal consumption, by saving and giving them out as loans to borrowers.  

The market for loanable funds is in equilibrium when the supply of loanable funds by the saver is equal to demand for loanable funds by the borrowers at a given interest rate.

When the market for loanable funds is in equilibrium, efficiency is maximized because projects that have higher rates of return are given priority to be funded first before the projects with lower rates of return are funded. The reason is that savers that have lowest costs of lending provides funds for the projects that have highest return rates in equilibrium. However, potential saver who do not lend money will prefer a higher interest rates.

Therefore, the correct options related to the two aspects of efficiency that the equilibrium of market for loanable funds exhibits are as follows:

a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.  

b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.  

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Controlling the money supply to achieve desired macroeconomic goals is called
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Answer:

The answer is monetary policy

Explanation:

Monetary policy is an economic policy that manages the size and growth rate of the money supply in an economy. It is a powerful tool to regulate macroeconomic variables such as inflation, consumption, growth and liquidity.

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Marika received a tip from a close friend who is an executive manager of a publicly traded company called MicroGreen Inc. The ma
saveliy_v [14]

Answer:

<u>Information asymmetry.</u>

Explanation:

Information asymmetry is characterized as a market failure that causes power imbalance. This occurs when some party involved has more information than another party.

This situation is becoming more widespread in microeconomics, as it interferes with the classic concept that the free market must follow the concept of perfect competition.

But information asymmetry is a market failure that directly impacts business relationships, and causes cases of adverse selection and moral hazard.

Ideally, there should be greater transparency in the financial statements that are required to be published so that the risk of information asymmetry between the company and investors is reduced.

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3 years ago
Write in detail about the programmes of the institute of agriculture and animal science​
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Answer:

The mission of the institute is to promote agricultural science and to train manpower for agricultural development focusing on teaching, research and extension.

Explanation:

4 0
1 year ago
When​ Judy's income increased from ​$200 to ​$240 a​ week, she increased her demand for concert tickets by 20 percent and decrea
aleksley [76]

Answer:

The answer is YED for concert tickets =  20%/ 20% = 1

YED for bus rides = -20% / 20%  = -1

Explanation:

income elasticity of demand (YED) = % change in Quantity demanded / % change in income

% change in income= (240-200) / 200  * 100= 20%

YED for concert tickets =  20%/ 20% = 1

YED for bus rides = -20% / 20%  = -1

The income elasticity of demand for concert tickets and bus rides is  unitary which means the rise in income is proportionate to the increase in the quantity demanded.

4 0
3 years ago
On January 1, 2011 Grace Company had an $13,000 balance in the Accounts Receivable account and a zero balance in the Allowance f
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Answer:

The amount of uncollectible accounts expense recognized on the 2011 income statement is:

$6,600.

Explanation:

As the amount of uncollectible accounts are expressed as percentage of the total sales, then the amount is $6,600

  • Initial Balance  

Dr Accounts Receivable  $ 13.000  

During 2011, Grace provided $55,000 of service on account  

Dr Accounts Receivable  $ 55.000  

Cr SALES $ 55.000  

  • The company collected $48,100 cash from account receivable.  

Dr CASH $ 48.100  

Cr Accounts Receivable  $ 48.100  

  • Uncollectible accounts are estimated to be 12% of sales on account  

Dr Bad Debt Expense $ 6.600  

Cr Allowance for Uncollectible Accounts $ 6.600  

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of accounts receivables as CREDIT.

Bad accounts are those credits granted by the company and there is no possibility of being charged.

"When customers buy products on credits but the company cannot collect the debt, then it's necessary  to cancel the unpaid invoice as uncollectible."

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit)  with accounts receivable (credit), with this we are recognizing the bad credit of the company.

7 0
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