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3 years ago

Inflation is 20 percent. Debt is $2 trillion. The nominal deficit is $300 billion. What is the real deficit or surplus

Business

1 answer:

algol133 years ago

4 0

Answer:

Real deficit is -$100 billion.

Explanation:

Since we have a nominal deficit in the question, what we are to calculate is the real deficit.

The real deficit can be described as the actual or nominal deficit that has been adjusted for the effect of inflation on the debt. Therefore, the real deficit can be calculated using the following formula:

Real deficit = Nominal deficit - (Debt * Inflation rate) ................. (1)

From the question, we have:

Inflation rate = 20%

Debt = $2 trillion = $2,000,000,000,000

Nominal deficit = $300 billion = $300,000,000,000

Substituting the values into equation (1), we have:

Real deficit = $300,000,000,000 - ($2,000,000,000,000 * 20%)

Real deficit = $300,000,000,000 - $400,000,000,000 = -$100,000,000,000 = -$100 billion

Therefore, real deficit is -$100 billion.

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An insurer sells a very large number of policies to people with the following loss distribution: $100,000 with probability 0.005

kogti [31]

Answer:

a) $2000

b) $1,886.7925

C) $2,036.7925

Explanation:

First, the question states to determine the expected claim cost per policy

Expected Claim Cost represents the fund required to be paid by an insurer for a particular contract or a group of contracts as the case maybe. This is usually based on the policy taken.

A) Expected Claim Cost per policy

= (Policy Loss Value A x its probability) + (Policy Loss Value B x its probability) + (Policy Loss Value C x its probability)+(Policy Loss Value D x its probability)+ (Policy Loss Value E x its probability)

= ( (100000 x 0.005 )+ (60000 x 0.010) + (20000 x 0.02) + (10000 x 0.05) + 0 = $2000

Part B: discounted expected claim cost per policy

Since, the sum of $2000 is expected to be paid by the insurer by the end of the year, the interest to be earned based on the rate (discounting used)

=$2,000 ÷ (1 + 0.06)

= $1,886.7925

Part C:: Determine the Fair Premium

Fair Premium is calculated as follows

The discounted policy claim cost + the Processing Cost per application + The fair profit loading

= $1,886.7925+ $100+50 = $2,036.7925

3 0

3 years ago

HOW IMPORTANT IS INNOVATION TO ENTREPRENEURSHIP?

faust18 [17]

Answer:

Successful innovation allows you to add value to your business so that you can increase your profits—if you don't innovate well, your business will plateau. Innovation helps you stay ahead of the competition. With globalization and a rapidly changing market, there are more competing businesses than ever before.

<h2><u>Hope This Helped!</u></h2>

8 0

2 years ago

After the accountant of Stallone Retailers had prepared the financial statements for the year ended 31 December Year 6, the fol

n200080 [17]

The adjusted profit of Stallone Retailers for the year ended December 31, Year 6 is £115,400.

Data Analysis:

1. Motor Van £8,000 Motor running expense £8,000

Depreciation expense £1,600 Accumulated depreciation £1,600 ( £8,000 x 20%)

2. Cost of goods sold £3,000 Inventory £3,000

3. Drawings £4,000 Inventory £4,000

4. Loan £2,200 Cash £2,200

<u>Adjustment of Profit</u>

Profit before the errors £112,000

Adjustments:

Motor running expense £8,000

Depreciation expense (£1,600)

Cost of goods sold (£3,000)

Adjusted profit £115,400

Thus, the adjusted profit is now £115,400.

Learn more: brainly.com/question/3816206

4 0

2 years ago

Suppose that the United States currently imports 1.0 million pairs of shoes from China at $20 each. With a 50 percent tariff, th

hichkok12 [17]

Answer:

Trade situation is a win-win game for US consumers as well as US producers and for all the whole world.

Since China is producing cheaper shoes which means US consumers will be gain from Chinese import at a reduced cost and that will result in higher consumer surplus. But because of the tariff, US consumers are at a disadvantage. Due to free trade agreement between US and Mexico, Chinese producers lost as their is tariff in their product which make it to be uncompetitive.

Explanation:

Looking at the difference between importation cost from both Mexico and China,

I.e Consumer Price of Mexican shoes - Consumer Price of Chinese Shoes = $30 - $25 = $5

Which means US consumers are paying $5 extra for Mexican import than Chinese import without tariff

For Chinese product

With the tariff, US consumers were paying ( 1 million * $10 ) = $10 million

Net consumer surplus is -$10 million USD.

For Mexican product

1.2 million * $5 = $6 million

Net Gain

$10 million - $6 million = $4 million.

The Net losses for US Sellers is $6 million

US government is losing all its tariff because of the free trade agreement resulting from Mexican import

1 million * $10 = 10 million

Trade situation is a win-win game for US consumers as well as US producers and for all the whole world.

6 0

3 years ago

Using a(n) ________ strategy, the producer directs its marketing activities toward final consumers to induce them to buy the pro

Maru [420]

Answer:

Letter A is correct. <u>Pull.</u>

Explanation:

A pull marketing strategy aims to increase demand for a product or service as consumer attraction to the product or service increases.

In this strategy, the marketing team should focus efforts on designing promotions that induce consumers to want a particular product through appeals for price benefits, brand value, and satisfaction. Increasing consumer perception and product desire directly increases product demand and business results.

Some examples of pull marketing are through email marketing, social media, promotions and discounts, advertising and others.

3 0

3 years ago