Answer:
a. Overstates Inflation.
In the case of Mary and Bob, the CPI would have already increased but in this case the price of the minivan increased as well. This will overstate inflation because it will not measure the general rise in price alone (inflation), it will also measure the rise in price as a result of the new minivan having better features.
b. Understated Inflation
Donna's case represents an understated inflation because the quantity shrank yet the price stayed the same. This means that the price is now buying less quantity than it used to which is inflation because more dollars are now required to buy the previous amount. This was not however recorded as there was no change in price.
c. Overstates Inflation
In the case of Zach, the inflation will be overstated because Zach is no longer buying bagels and is now buying muffins so continuing to use bagels as a representative good in the basket of goods used to calculate CPI would be overstating it.
d. Accurate representation of Inflation
In Chris's case, the increase in the price of the same shoe over the years has been because of a general rise in prices and not because it is a different model. It is the same shoe and its price is rising generally so this is an accurate depiction of inflation.
Answer:
$50,400
Explanation:
To do this first start by multiplying .12 x 35,000. The answer should be $4,200. After this multiply 4,200 by 12 in order to get the amount of money earned over a 12 month period. This will give you $50,400.
Answer: $40,000
Explanation:
The gain from discounted operations assuming no income taxes, is the gain from the sale of the asset less the net operating losses in the period.
= Gain from Sales of Asset - Net losses in period
= 90,000 - ( 20,000 + 30,000)
= $40,000
The correct answer for the question that is being presented above is this one: "B. A pawn shop has lower interest rates than banks." The statement about a pawn shop that is correct is this one: <span>B. A pawn shop has lower interest rates than banks.</span>
