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4 years ago

In the Keynesian model, it is assumed that, when demand for a firm's product changes, the firm:

Business

1 answer:

REY [17]4 years ago

7 0

Answer:

B. changes production levels to meet the demand.

Explanation:

The Keynesian model is usually used as a theoretical approach to understand economics in the short run. For Keynes, in the short term, firms can not change their prices immediately because exist a menu cost: the cost of changing prices. Instead, firms change the unique variable that they can control: quantities.

In such way can meet the demand in the short run.

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3 years ago

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2 years ago

The Corner Grocer has a 7-year, 6 percent annual coupon bond outstanding with a GHS 1,000 par value. The bond has a yield to mat

Amanda [17]

The increase of yield to maturity to 6.5% would reduce bond price by 5.43%

What is bond price?

The bond price is the present value of annual coupons over the bond life of 7 years and the face value payable to bondholders at bond maturity discounted at the yield to maturity of the bond.

We can determine the bond prices with yield to maturity of 5.5% and with 6.5% yield to maturity using a financial calculator which requires that the calculator be set to its end mode since its annual coupons are payable at the end of each year, rather when the coupons would be paid at the beginning of each year.

Initial bond price:

I/Y=5.5(bond yield is 5.5%, without the % sign)

PMT=60(annual coupon=face value*coupon rate=1000*6%)

N=7(number of annual coupons in 7 years)

FV=1000(the face value is 1000)

CPT(press compute)

PV=GHS 1,028.41

New price with YTM of 6.5%:

I/Y=6.5(bond yield is 6.5%, without the % sign)

PMT=60(annual coupon=face value*coupon rate=1000*6%)

N=7(number of annual coupons in 7 years)

FV=1000(the face value is 1000)

CPT(press compute)

PV=GHS 972.58

change in bond price=(972.58/ 1,028.41)-1

change in bond price=-5.43%

Find out more about bond pricing on:brainly.com/question/25596583

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2 years ago

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost i

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Please see attachment

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