Answer:
D. an increase in the price of a good causes a decrease in market demand for that good.
Explanation:
First, if prices decrease, then people will feel wealthier and consume more and the aggregate demand increases. (Pigou´s effect)
Second, if interest rates decrease available domestic investors will invest in foreign countries where return (interest rates]) on investments are higher. If domestic investors invest in foreign countries the supply of dollars will increases. This will decrease the real exchange rate and then exports will be affected in a positive way; exports will increase and thus the aggregate demand.
Third, when the price level is down, consumers demand less currency, which means that they will keep more money in their bank accounts. If banks have more money, then the interest rate for loans decrease. If interest rates decrease, the cost of investment decreases too. Then, if the price for investment decreases, the demand for it increases and the aggregate demand decreases too.
A purchasing power parity (PPP) adjustment enables a more precise comparison of the level of living across nations. The cost of living in the US serves as the foundation for the adjustment.
<h3>What is purchasing power parity (ppp)?</h3>
By removing the variations in price levels between nations, purchasing power parities (PPPs) are rates of currency translation that aim to equalize the purchasing power of various currencies. The more the salary and price discrepancies across nations, the greater the productivity gaps in the production of marketable products, and, consequently, the greater the discrepancy between buying power parity and the equilibrium exchange rate.
By taking the geometric mean of the pricing relationships between each pair of economies for the two varieties of rice, the basic-heading PPP for each pair of economies may be calculated directly. This comparison is bilateral. Indirectly, PPP C/A PPP B/C = PPP B/A can be used to calculate the PPP between economies B and A.
Hence, A purchasing power parity (PPP) adjustment enables a more precise comparison of the level of living across nations. The cost of living in the US serves as the foundation for the adjustment.
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Answer:
6.383%
Explanation:
Calculation for the What is the yield to maturity
Using this formula
YTM=n√Face value/Bond price -1
Where,
n=one-year
Face value=10,000
Bond price=9,400
Let plug in the formula
YTM=1√10,000/9,400−1
YTM=1.06383-1
YTM=0.06383*100
YTM=6.383%
Therefore the yield to maturity will be 6.383%
Answer:
Results are below.
Explanation:
<u>To calculate the future value, we need to use the following formula:</u>
FV= PV*(1+i)^n
a) i= 0.04 annually compounded
n= 5
PV= $625
FV= 625*(1.04^5)
FV= $760.41
b) i= 0.04/2 = 0.02 semiannually compounded
n= 5*2= 10
PV= $625
FV= 625*(1.02^10)
FV= $761.87
c) i= 0.04/4 = 0.01 quarterly compounded
n= 5*4= 20
PV= $625
FV= 625*(1.01^20)
FV= $762.62
d) i= 0.04/12 = 0.0033 monthly compounded
n= 5*12= 60
PV= $625
FV= 625*(1.003333^60)
FV= $763.11
Answer:
Accounts receivable turn over is 16.64
Explanation:
To compute accounts receivable turn over ratio, we simply divide net credit sales over the average accounts receivable.
Accounts receivable turn over ratio = $1,240,000/$74,500
= 16.64
The higher the ratio, the better it is in the company. It simply means, the company exercises the effective way to collect its receivable from the customer.
*Net credit sales is derived by deducting sales returns and allowances from gross credit sales. If the problem is silent regarding cash sales, we will assume that the sales made by the period is all at credit.
