a. Nominal interest rates Increase and Aggregate demand Decrease
b. New Fed policy Buy bonds
Explanation:
When contemplating unemployment, the nominal interest rate applies to the rate of interest. Net may, without taking into consideration any commissions or compounded interest, be related to the advertised or reported interest rate of a loan.
The aggregate demand (AD) for finished commodities and facilities in the market at a certain time is aggregated. Strong demand is often named, but this term is often used in many ways. This is the market for a country's gross national product.
When the Fed sells debt in the international market, the world economy money supply is expanded by exchanging debt for cash from the general public. Instead, when the Fed sell bonds, the supply of money is reduced by cash being pulled out of the market in return for bonds. The Fed also sells bonds.
Answer: (B) Demand for products
Explanation:
The demand for the products is basically refers to the process in which the amount of the specific products are get purchased for the particular price so that the one business organization increase their productivity and the other business meets its specific requirement.
There are basically five factors which determine the demand of products function in an organization are as follows:
- Income of the buyer
- Price
- Customer choice
- The actual price of the related other products
- Future supply expectations
Therefore, Option (B) is correct.
Answer:
5.71%
Explanation:
The after tax cost of debt=pretax cost of debt*(1-t)
where t is the tax rate of 35% or 0.35
pretax cost of debt=yield to maturity
The yield to maturity can be determined using rate formula in excel as below:
=rate(nper,pmt,-pv,fv)
nper is the number of coupon interest payable by the bonds i.e 12 coupons in 12 years
pmt is the annual coupon=$1000*9.5%=$95
pv is the current market price-flotation cost=$1,100-$48=$1052
fv is the face value of $1000
=rate(12,95,-1052,1000)=8.78%
After tax cost of debt=8.78%
*(1-0.35)=5.71%
Answer:
C. Ron’s basis in his stock is $27,000
Explanation:
Income recognized on services rendered $21,000
Add basis of $6,000
Ron stock basis $27,000
The property contributed by Ron is not considered insignificant compared to the value of the services he has rendered, which is why the entire contribution is counted as being for property.
Hence, the control requirement is satisfied and a valid § 351 transaction results. Ron’s stock basis is $27,000 [$6,000 (basis of cattle transferred) + $21,000 (income recognized on services rendered)]
Answer:
The correct answer is letter "B": inefficiencies result when incentives to produce are reduced.
Explanation:
Equity-efficiency tradeoff takes place when attempting to optimize the production efficiency, distribution of wealth is diminished. The concept is always linked to moral philosophy because it implies taking about how people organize themselves in the way to produce and share their goods in a fairly. According to this point of view, when there is not enough motivation to produce inefficiencies arise.
