Answer:
The correct answer is: stabilizers; destabilizer.
Explanation:
The automatic stabilizer is a government policy that correct fluctuations in the economy through their normal operation and hence they are called automatic stabilizers.
Taxes and government spending are examples of automatic stabilizers.
During an expansion, taxes increase with an increase in income and government spending decrease. These two without any intervention by the government automatically stabilize the economy.
Automatic destabilizer causes fluctuations by their normal operation. An example of destabilizer is inflation which increases during expansion and causes fluctuations without any intervention.
Answer: False
Explanation:
There is a relationship between the level of education that a person receives and the lifetime earnings. It should be noted that the more education that a person receives, the higher the lifetime earnings of such person will be.
For example, someone who has a doctorate degree is expected to have a higher lifetime earnings than someone who has a high school degree.
Therefore, based on the explanation given, the statement is false.
Answer:
The extent to which a country has developed may be assessed by considering a range of narrow and broad indicators, including per capita income, life expectancy, education, and the extent of poverty.
Explanation:
thats
indicators of development
Answer:
Under CAPM:
Re = Rf + Beta(Rm - Rf)
Rf = 5%
Rm - Rf = 6%
Beta = 1.25
Re = 5% + (1.25 x 6%) = 12.5%
Under dividend discount model:
Re = (Div₁ / P₀) + g
Div₁ = $1.20
P₀ = $35
g = 8%
Re = ($1.20 / $35) + 8% = 11.43%
Under bond yield plus risk premium approach:
Re = Pre-tax cost of debt + risk premium over its own debt
Pre-tax cost of debt = 7%
risk premium over its own debt = 4%
Re = 7% + 4% = 11%
The highest cost of equity results from the CAPM model and it is 12.5% while the lowest results from using the bond yield plus risk approach (11%), the difference is 1.5% between them.
