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KatRina [158]
2 years ago
12

Suppose the economy is in long-run equilibrium. In a short span of time, there is a decline in the money supply, a tax increase,

a pessimistic revision of expectations about future business conditions, and a rise in the value of the dollar. In the short run, what would we expect to happen?
Business
1 answer:
Mkey [24]2 years ago
8 0

Answer:

The price level and GDP will fall.

Explanation:

A decline in money supply will increase the interest rate, as a result the investment will decline. This will cause production to decrease. An increase in tax will cause the cost of production to increase, reducing the supply. The taxes will decrease the disposable income, further reduing demand and cnsumption. A pessimistic expectation of business will also cause production to decline.

A rise in the value of dollars will make exports expensive, reducing exports. All of this will cause the GDP and price level to decline.

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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Suppose you just bought an annuity with 9 annual payments of $15,400 at the current interest rate of 11 percent per year.

First, we need to determine the final value with the following formula:

FV= {A*[(1+i)^n-1]}/i

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Then, we can calculate the present value with the following formula:

PV= FV/(1+i)^n

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FV= $218,125.17

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B) i= 6%

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C) i= 16%

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PV= $70,940.77

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