All categories

3 years ago

If actual output exceeds potential output for a prolonged period of time, we would eventually expect factor prices to:

Business

1 answer:

Andru [333]3 years ago

7 0

Answer:

The correct answer is option A.

Explanation:

The potential output represents the full employment level of output. If the actual output is greater than the potential output level for a long time, it implies that the economy is experiencing inflation.

In the case of inflation, the general price level rises, so the factor prices will rise as well. This increase in factor prices will further increase the cost of production.

This increase in the cost of production will consequently cause the supply to decrease shifting the SAS or short-run aggregate supply curve to the left.

You might be interested in

A firm is reviewing an investment opportunity that requires an initial cash outlay of $336,875 and promises to return the follow

Fofino [41]

Answer:

The NPV of this investment is $64,581.75

Explanation:

Hi, we need to discount to present value all the future cash flows, the formula to use is as follows:

$NPV=-Investment+\frac{CF1}{(1+r)^{1} }+\frac{CF2}{(1+r)^{2}} +\frac{CF3}{(1+r)^{3}} +\frac{CF4}{(1+r)^{4}} +\frac{CF5}{(1+r)^{5}}$

Where

NPV = Net Present Value

CF = The cash flow stated in the problem by year

r= discount rate (in our case, 0.08 or 8%)

Now, let´s solve this.

$NPV=-336,875+\frac{100,000}{(1+0.08)^{1} }+\frac{82,000}{(1+0.08)^{2}} +\frac{76,000}{(1+0.08)^{3}} +\frac{111,000}{(1+0.08)^{4}} +\frac{142,000}{(1+0.08)^{5}}$

$NPV=-336,875+ 92,592.59 + 70,301.78 + 60,331.25 + 81,588.31+96,642.81$

$NPV=64,581.75$

So, the net present value of this project is $64,581.75

Best of luck.

7 0

3 years ago

Robert Solis is a salesman in a company that specializes in event management. He uses the Internet to identify potential compani

TiliK225 [7]

Answer:

Explanation:

4 0

3 years ago

If you put $50 in a savings account that paid 10% compounded yearly, how much interest would you earn in 3 years?

stepladder [879]

Answer:

$66.55

Explanation:

10% of 50 = 5

55 in one year

10% of 55 = 5.5

60.5 in two years

10% of 60.5 = 6.05

66.55 in three years

Hope this helped

4 0

3 years ago

On March 1, 2020, the Teal Company received a $45,000 payment for annual magazine subscriptions (the subscriptions run from the

bulgar [2K]

Answer:

The company has incorrectly credited the sales revenue account at the time of the receipt of payment. So, the journal entry to record the transaction is as follows:

Date Particulars Debit Credit

March 1, 20 Sales Revenue A/c $45,000

To Unearned Sales Revenue A/c $45,000

(To record Unearned sales revenue)

5 0

3 years ago

Tuller wants to start a commercial trucking business and also wants to form his own limited liability company (LLC). Tuller, as

sweet-ann [11.9K]

Answer:

d, all states, as no state requires at least two members to create an LLC

Explanation:

The requisite of two members to create an LLC was removed from all states in the USA. Now, all states allow a single-member LLC. Massachussets was the last one to eliminate that requisite in 2003.

Maybe this change in laws was because owners cheated on that requisite by placing as the two members (owners) a man and his wife, or a woman and her husband, or some other person (in direct relation with the owner) which was just placing the name but the company actually belonged to only one member.

4 0

3 years ago