Answer: b. using a fixed basket of goods and, therefore, will tend to overstate inflation.
Explanation:
CPI uses a fixed basket of goods each year and measure inflation by monitoring the changes in this basket over several years/ periods.
This has the tendency to overstate inflation however, due to three(3) main reasons: Substitution bias, Quality bias and New product bias.
With substitution bias, the CPI does not take into account that when products increase in price, people will substitute them for lower priced goods. Quality bias means that CPI does not account for change in quality. New Product bias means that CPI does not account for new and better products as it uses a fixed basket.
Put together these three can cause CPI to overstate inflation by as much as 1% sometimes.
Willing to pay for the stock today is $72.43.
Given values, Dividend = $1.85
Price = $80
return = 0.13
Formula, Current Price = (Dividend + Price ) / (1 + return )
= (1.85 + 80) / (1+ 0.13)
= $72.43
The number one purpose that buyers personal inventory is to earn a return on their funding. That go back commonly is available in viable methods: The stock's price appreciates, this means that it is going up. you can then promote the stock for a profit if you'd like.
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Answer:
$100,000
Explanation:
Data provided
Perpetual cash flow = $10,000
Discount rate = 10%
According to the given situation, the computation of Present value of this inginite sequence of cash flow is shown below:-
Present value = Perpetual cash flow ÷ discount rate
= $10,000 ÷ 10%
= $10,000 ÷ 0.1
= $100,000
Therefore for computing the present value we simply applied the above formula.
Answer:
The principle or model of voluntary exchange assumes that people will act based on self-interests. This is an important component of a healthy economy. If individuals in a market economy do not feel that they will benefit from the exchange, they would not be willing to make it.
Hope this helps!
Answer: MRP or the Marginal Revenue Product is the addition to total revenue when one more unit of a product is produced and sold in the market. It can be calculated using the given formula,
Therefore, MRP for the twelfth worker will be,
which is total revenue at 12th worker minus total revenue for the 11th worker.
