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frosja888 [35]
3 years ago
11

According to liquidity preference theory, if the price level A. fell, the interest rate would fall, and induce investment spendi

ng to fall. B. rose, the interest rate would fall, and induce investment spending to rise. C. rose, the interest rate would rise, and induce investment spending to fall.
Business
1 answer:
Pavlova-9 [17]3 years ago
3 0

Answer:

The correct answer is: fell making the interest rate fall.

Explanation:

The preference for liquidity is a recurring expression in the study of economics, especially important in Keynesian theory and that assumes that people consider it better to have their savings in liquid form, that is, as money.

This concept, which is very recurrent in macroeconomics, assumes the existence of an outstanding trend in human and rational behavior through which individuals prefer to have their assets accessible and liquid compared to other possibilities. Originally, the definition of liquidity preference was coined by Keynes when explaining the concept of monetary demand and its mode of action.

This theory suggests that there is a direct relationship between interest rates or rates and people's preferences in terms of liquidity, because both maintaining money effectively and not doing so entail certain costs for these. In other words, saving money can translate into financial gains.

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Cardinal Health bonds have an annual coupon rate of 3.4 percent and a par value of $1,000 and will mature in 7 years. If you req
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Annual coupon to be paid\bold{= \$1000 \times 3.4\%= \$1000 \times \frac{3.4}{100}  = \$34}

years = 7

Calculating the bond price:

= \$1000 \times PVF(5\%, 7\ years) +\$34 \times PVAF(5\%, 7\ years) \\\\= \$1000 \times 0.71068 +\$34 \times 0.17282\\\\= \$710.68 + \$5.87588\\\\= \$716.55588\\\\= \$716.56\\\\

So, the final answer is "$716.56".

Learn more:

brainly.com/question/15570099

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3 years ago
Golden Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require high
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A. The company paid a higher cost for the direct materials than allowed by the standards.

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The following is a logical explanation for this variance:

Since, the standard quantity of raw materials to be used is 22 pounds x 500 units = 11000 pounds. The actual usage is 9500 pounds ony. Hence, variance in direct material price variance can be only due to higher cost of direct material purchased.

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