1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Svetach [21]
3 years ago
14

Suppose the announcement of a new head of the central bank, with a reputation of being soft on inflation, increases expected inf

lation by 5 percentage points. According to the Fisher effect, what is the new nominal interest rate?
Business
1 answer:
puteri [66]3 years ago
6 0

Answer:

Nominal interest rate (i)= expected inflation rate (f) + real interest rate (r)

i= 5+r

Explanation:

The Fisher Effect is an economic theory created by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates.

The Fisher Effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.

The Fisher Effect can be seen each time you go to the bank; the interest rate an investor has on a savings account is really the nominal interest rate.

You might be interested in
On January 2, 2017, a calendar-year corporation sold 5% bonds with a face value of $2500000. These bonds mature in five years, a
Oksanka [162]

Answer:

Consider the following explanation

Explanation:

Under Effective interest method, Interest calculated at the effective interest rate (i.e., the yield of the bond) is charged as an expense annually, and the payment made basis the Coupon rate.

In the given case, interest to be paid semi annually i.e, on June 30 and on December 31, will be $62,500 (i.e., 2,500,000 * 5% * 6/12).

On the basis of above, the interest expense to be charged in the 2017 can be calculated as follows: take a look to the attached archive.

As calculated above, the amount to be charged as interest expense for the year 2017 is (80,220 + 80,840 i.e.,) $ 161,060.

Download xlsx
3 0
3 years ago
Stocks are:
denis23 [38]
Not available for individual investors hola
7 0
3 years ago
True or False: Potential customers and non-potential customers are mixed together in the marketplace, so it is impossible to ens
Jobisdone [24]

The marketplace is full of both potential and non-potential customers which makes this statement <u>True</u>.

<h3>Are both potential and non-potential customers in the market?</h3>

The market does indeed have both potential customers for a product and non-potential customers who would not want to buy the product.

As a result, it is not possible to directly market to only potential customers, but to the entire marketplace.

Find out more on potential customers at brainly.com/question/3053467.

#SPJ1

3 0
2 years ago
When the Fed buys bonds the supply of money decreases and so aggregate demand shifts left. the supply of money decreases and so
stealth61 [152]

Answer: The supply of money increases and so aggregate demand shifts right.

Explanation: When the Federal Government buy Bond they help to increase the amount of money available for the Banks to loan to Business entities, Organisations and individuals.

The Aggregate Demand will Shift to the right, signaling the Increase in the rate of Demand as a result of the Increase in the volume of Money in circulation within the Economy. Once consumers have money to spend or invest they will cause the Demand for goods and services to increase.

4 0
3 years ago
Carpet Woes. Beau went shopping at ABC Carpet. He saw some carpet he liked but could not make up his mind. The manager at ABC Ca
ella [17]

Answer: The court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

Explanation:

Based on the information given in the question, we should note that the court will apply the predominant-purpose test to determine whether the predominant purpose of the contract was the sale of goods in which case the UCC would apply.

We should note that under a predominant purpose test, it will apply when the transaction involved is Mena for goods sales and not for the service sales.

4 0
2 years ago
Other questions:
  • A company's sales forecast would likely consider all of the following factors except:
    10·1 answer
  • One test of evidence is "does the evidence come from unbiased sources?"
    6·1 answer
  • Problem 10-3 eastman publishing company is considering publishing an electronic textbook about spreadsheet applications for busi
    6·1 answer
  • Use the table and proivded and explain the law of diminshing returns<br><br>plz help asap ​
    10·1 answer
  • 50. Regarding product mix, brand name is a part of A. place. B. price. C. product. D. promotion.
    7·1 answer
  • Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly fina
    11·1 answer
  • On October 1, Kelly Company received $25,500 for six months of rent, in advance. Kelly credited Rent Revenue, which is an altern
    10·1 answer
  • Lotta Dough just won the state lottery and has elected to receive $50,000 per year for 20 years in the form of an annuity due. W
    15·1 answer
  • How would non repayment of loan affect the economy of the country?​
    15·1 answer
  • the difference between a demand schedule and a demand curve is that the demand ____ presents information graphically or visually
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!