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alexgriva [62]
3 years ago
8

A country in South America is experiencing high inflation, around 15% annually, and high unemployment, around 25%. According to

the AD/AS model, which of the following is most likely to explain this outcome?
a. A positive real shock
b. A positive aggregate demand shock
c. A negative aggregate demand shock
d. A negative real shock
Business
1 answer:
Assoli18 [71]3 years ago
5 0

Answer:

The correct answer is the option D: A negative real shock

Explanation:

To begin with, in the case presented where the economy has suffered from high inflation and unemployment rates then the most likely situation that could have happened before to explain this outcome is that the country and its economy were harmed badly by a negative real shock. This tend to happen when the aggregate supply is low and this one tends to decline rapidly affecting the economy in its whole due to the fact that the sellers are now producing less of the products and services and therefore the consumption and the real GDP decreases dramastically.

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Which of the following is not an example of a significant noncash transaction? Conversion of bonds into common stock. Sale of pl
Lostsunrise [7]

Answer:

Sale of plant assets.  If the company<u> sales an equipment it will receive cash </u>for it. We are not given with any information of this transaction not being in cash, so we should assume it was a sale in cash or cash equivalent.

Explanation:

<u>Conversion of bonds into common stock.</u> The bonds, which are outstanding and represent a promise to pay, are converted into common stock, this transaction doesn't involve cash.

<u>Issuance of common stock to purchase land. </u>The land is acquire in exchange of common stock, the company is not using cash. the owner of the land can later sold the stock to a third party but it won't affect the cash flow of the company.

<u>Issuance of debt to purchase equipment </u>Like singing a note to purchase a machine, no cash is involve.

3 0
3 years ago
Chelsea Fashions is expected to pay an annual dividend of $1.26 a share next year. The market price of the stock is $24.09 and t
tekilochka [14]

Answer:

7.83%

Explanation:

This is calculated by using the Gordon growth model (GGM) formula as follows: P = d / (r - g) ……………………………………… (1)

Where;

P =  market price of the stock = $24.09

d = next year annual dividend = $1.26 r = cost of equity = ?

g = dividend growth rate = 2.6%, or 0.026

Substituting the values into equation and solve for r, we have:

24.09 = 1.26 / (r - 0.026)

24.09 (r - 0.026) = 1.26

24.09r - 0.62634 = 1.26

24.09r = 1.26 + 0.62634

24.09r = 1.88634

r = 1.88634 / 24.09

r = 0.0783038605230386, or 7.83038605230386%

Rounding to 2 decimal places. we have:

r = 7.83%

Therefore, the correct option is 7.83 percent.

6 0
3 years ago
According to surveys, the second largest expense of a typical American<br> consumer is
lesantik [10]

Answer:

Social Security

Explanation:

3 0
3 years ago
Read 2 more answers
Mr. Smith, the special education teacher, called Tim's parents to schedule a meeting to update information on Tim's progress on
topjm [15]

Answer:

b

Explanation:

ebbbbdbjdbvbksb jbejbkgbksn

7 0
2 years ago
Jack's manufacture company have experienced inflation for the past three years as follows: the first year's periodic inflation r
ankoles [38]

Answer:

8.09%

Explanation:

Year          Inflation rate    1 + Inflation rate

1                     0.03                     1.03

2                     0.04                     1.04

3                         x                       1+x

Average rate  0.05                   0.05

1 + Average rate  = [(1+r1)*(1+r2)*(1+r3)]^(1/3)

1.05 = [1.03*1.04*(1*x)]^(1/3)

[1.0712*(1+x)] = (1.05)^3

[1.0712*(1+x)] = 1.157625

1 + x = 1.157625 / 1.0712

1 + x = 1.080681

x = 1.080681 - 1

x = 0.080681

x = 8.09%

Thus, the periodic Inflation rate in year 3 is 8.09%

5 0
3 years ago
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