Money supply is the total amount of money in circulation which includes coins, cash and balance in savings account in a country at a period of time.
- Given a fixed supply of money and a downward sloping aggregate demand curve, an increase in money demand will <u>not change</u> the price paid for its use, otherwise known as the <u>discount rate.</u>
- A change the money supply in a country causes a change in aggregate demand.
- An increase in the money supply causes increase in aggregate demand and a decrease in the money supply causes decrease in aggregate demand.
Therefore, an increase in money demand will not change the price paid for its use, otherwise known as the discount rate.
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Answer:
Management can implement a tax strategy to create future taxable income, but it will be detrimental to the future profitability of the company.- D.
Answer:
(i) The farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units
(ii) The farm cannot cover its revenue using its total variable cost, therefore the farm will shut down
(iii) The two relevant points on supply curve will be: (Price = $12 & Quantity = 0) and (Price = $25 & Quantity = 200)
Explanation:
(i)According to given data, When output is 200 but price is $20, this price is equal to ATC, so the farm breaks even. But since this price is higher than AVC of $15, the farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units.
(ii) When output is 200 but price is $12, this price is equal to ATC, so the farm makes economic loss. Also, this price is lower than AVC of $15, so the farm cannot cover its revenue using its total variable cost, therefore the farm will shut down.
(iii) The farm's supply curve is the portion of its Marginal cost (MC) curve above the minimum point of AVC. Since price equals MC, the two relevant points on supply curve will be: (Price = $12 & Quantity = 0) and (Price = $25 & Quantity = 200).
Answer:
a. It will take her 5 years to pay for her wardrobe
b. She should shop for a new card once she is done paying for this one.
c. She should shop for a new card after finishing paying for this card since going further into debt with the current card would be a bad idea. This is due to the fact that an annual interest rate of 16% is very high. The best option would therefor to finish her payments on the credit card, then shop for a new card with a lower annual interest rate.
Explanation:
Use the formula below to determine the number of months it would take Rachel to pay off her debt;
C *{1-(1+r)^(-n×t)}/(r/n)=PV
where;
C=annuity
r=annual interest rate
n=number of compounding periods in a year
t=number of years
PV=present value
In our case;
PV=$10,574
C=$260
r=16%=16/100=0.16
n=12
t=unknown
replacing;
260*{1-(1+0.16/12)^(-12×t)}/(0.16/12)=10,574
1-(1+0.16/12)^(-12×t)={10,574×(0.16/12)}/260
1-{1.013^(-12 t)}=0.542
(1-0.542)=1.013^(-12 t)
ln 0.458=-12 t (ln 1.013)
t=-ln 0.458/12×ln 1.013
t=5
It will take her 5 years to pay for her wardrobe
b. She should shop for a new card once she is done paying for this one.
c. She should shop for a new card after finishing paying for this card since going further into debt with the current card would be a bad idea. This is due to the fact that an annual interest rate of 16% is very high. The best option would therefor to finish her payments on the credit card, then shop for a new card with a lower annual interest rate.
