Answer:
Money supply increases causing the interest rate to decrease. investment spending will increase and the AD curve will shift to the right. price level however does not change.
Explanation:
Because the AS curve is horizontal there is a liquidity trap. During a liquidity trap, monetary policy is MOST EFFECTIVE. When money supply increases it causes an excess of money in the economy causing a drop(decrease) in the interest rate. The subsequent drop in the interest rate causes people to increase investment, which causes investment spending to rise(increase). This increase in investment spending causing the Aggregate Demand(AD) curve to move right. The price level does not change because the AS curve is horizontal and pegged at a given price level. So no matter the Demand the supply will only be at that constant price.
Answer:
C. workers with more years of formal schooling are less likely to be affected by ability, effort, and chance.
Explanation:
The <em>signalling theory in education</em> tells us that employees send "signals" to their employees regarding their education. In other words, employers are willing to pay higher wages to employees with additional years of formal schooling.
This means these qualified workers have their wage primarily defined by their education level, which does not always reflect their true skill-set (the output of ability and effort).
Answer:
Present value = $1,170.68
Explanation:
The value of the bond in 5 years will be:
PV of face value = $1,000 / (1 + 7%)¹⁵ = $362.45
PV of coupon payments = $110 x 9.1079 (PVIFA, 15 periods, 7%) = $1,001.87
Total value = $1,364.32
The current value of the bond is:
PV of face value = $1,364.32 / (1 + 12%)⁵ = $774.15
PV of coupon payments = $110 x 3.6048 (PVIFA, 5 periods, 12%) = $396.53
Present value = $1,170.68
Answer:
Throughout the revenue generation code section 1231, 1231 assets were specified in the revenue generation section 1231. Elsewhere there is further clarification provided.
Explanation:
- The loss suffered should be considered as something of an ordinary loss which can be excluded from either the taxable income of the individual, as this is thus advantageous since it is 100% exempt again from the tax liability of the individual.
- Inventories weren't included throughout the 1234 clauses, nevertheless, and as such the losses mostly on stock kept during 6 months also aren't protected by the 1234 rules and therefore must be recognized as a regular loss of operation.
- The income earned from either the property where impairment is claimed as either a regular business loss throughout section 1234 could be calculated as deep-term losses or capital gains unless the income increases the value of the loss reported throughout section 1234.