If people made an assumption that future rates of inflation will follow the pattern of inflation rates in the past, they are said to have an adaptive expectation.
`Adaptive expectation is an economic theory that emphasizes the role of previous occurrences in forecasting future results. Predicting inflation is a common example. According to adaptive expectations, if inflation increases in the previous year, consumers will anticipate more inflation in the next year.
Pe = Pt -1 is a simple formula for adaptive expectations. This indicates that respondents anticipate inflation to be similar to last year.
The model makes the simple assumption that individuals base their estimates of the future on what has already occurred. In the actual world, previous behavior is just one of many variables that affect present and future actions. Particularly whether inflation is trending higher or lower, adaptive expectations are limited. Due to these restrictions, rational expectations were formed, which took a variety of elements into account while making decisions.
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Answer: The correct answer is "A disproportionate number of high-risk individuals are attracted to buy insurance.".
Explanation: A disproportionate number of high-risk individuals are attracted to buy insurance is a problem that arises in a health insurance market. Due to the greater risk, many insurers choose not to allow these individuals to hire these policies, and those that do offer these products do so with a higher premium than others.
Answer:
30600 less 25 000 = 5600
increase in net income
Explanation
1400 units 1000 units
sales 224 000 160 000
(1400*160) (1000*160)
variable costs (106 400) (48 000)
(1400*76) (1000*48)
contribution margin 117 600 112 000
fixed costs (87 000) (87 000)
net operating income 30 600 25000
Answer:
$119,657.025
Explanation:
Given that,
Loader had a list price = $123,530
Discount = 5.75%
Freight cost = $2,310
Specialist’s fee = $920
Amount to be capitalized in an asset account for the purchase of the front end loader:
= List price - Discount + Freight cost + Specialist fees
= $123,530 - ($123,530 × 5.75%) + $2,310 + $920
= $123,530 - $7,102.975 + $2,310 + $920
= $119,657.025
Note: Operator salary and insurance cost are an operational expense, so will not be capitalized.
The answer for this question (I think) is D. If they don't study the needs of the customers they don't know who their target group, if they don't cut costs they could waste money, and increasing promotion gains income.