Answer:
The correct answer is prices in the aggregate are rising, although some particular prices may be falling.
Explanation:
Inflation is a generalized increase in the prices of goods and services in an economy over a period of time.
Inflation exists when the prices of the whole goods and services of an economy increase steadily. That is, when the average price of all goods and services in a country goes up.
The price increase causes the loss of purchasing power of citizens. Or put another way, if there is inflation it means that with the same money we can buy less things than before.
Often it is said that inflation is good, but it is not that it is good in itself, but that although the prices of an economy rise, wages also tend to rise according to that price increase. Thus, in the end the purchasing power of citizens remains stable. It can be good, as long as it is stable and not very high, for the following reasons:
- The rise in prices helps reduce the value of debts, both from households, as well as from companies and the Government. This is because if there is inflation in an economy and our wages rise at the same rate, but the debt remains the same as before, the real value of the debt will be lower than before prices rose.
- The rise in prices also causes people to prefer to consume now instead of later, because then prices will be more expensive. This is fundamental so that money circulates and there is transmission of goods in an economy. It is the gear of capitalism.
Disadvantages of inflation
Its main drawbacks are:
- Loss of purchasing power: If the rise in wages is not at least equal to the rise in prices, the purchasing power will fall. We could be happy if we raise the salary by 10% in one year, but if inflation has been 20%, we can actually buy 10% less with that salary.
- Saving decreases: Inflation causes money to lose value, so it will motivate you to consume and spend money, instead of saving it, since if money is going to be worth less in the future, citizens and investors will prefer to spend it now.
Answer:
C) $90,000 income from the S corporation and $30,000 income from the C corporation.
Explanation:
An S corporation is a type of corporation that is subject to certain restrictions (e.g. total number of shareholders) because it is taxed like a general partnership, i.e. the corporation's income is not taxed at a corporate tax rate but is taxed as shareholders' gross income. This way shareholder can avoid double taxation.
If Bjorn owns 60% of the S corporation, then he will be taxed for 60% of the corporation's income = 60% x $150,000 = $90,000
Dividends from a C corporation are also taxed as gross income = $30,000
Answer:
$1, 727.68
Explanation:
Cheryl wants to have $2000 three years from now in an account that pays 5%
The $2000 is equivalent to the Future value when applying the compound interest formula. The present value is the amount she needs to invest now.
Fv= PV (1+5/100)^3
$2000 = PV(1+0.05)^3
$2000 =Pv 1.157625
Pv = $2000/1.157625
Pv= 1,727.68
Cheryl has to invest $1, 727.68
Increases in government spending are not very effective in offsetting real shocks because they shift the aggregate demand.
<h2>Definition of Aggregate Demand</h2>
Aggregate demand is the value of all requests for all types of goods and services produced in a certain period. The demand value contained in this aggregate will be expressed in terms of the overall value used for these goods and services up to a more specific price level and at a certain time period.
Some things that include aggregate demand are all consumer goods, capital goods used for the production process, import-export activities, and state government spending programs. Each of these variables will be considered the same as long as they are traded at the same market value.
This aggregate demand can also be calculated over a long period of time, which is often referred to as GDP or Gross Domestic demand. If this GDP will describe the total value and also the goods produced, then aggregate demand will represent the desire for goods and services.
Learn more about aggregate demand at brainly.com/question/29349235.
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Answer:
$891.86
Explanation:
For this question, we use the Present value formula that is to be shown on the attachment. Kindly find it below:
Given that,
Future value = $1,000
Rate of interest = 12%
NPER = 5 years
PMT = $1,000 × 9% = $90
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the present value is $891.86