Explanation:
1. If butter complements margarine for instance, and there occurs a sudden increase in the price of butter leading to lower demand, this would affect the demand for margarine negatively leading to a fall in the demand for margarine.
2. If this goods are substitutes the demand for butter will increase when the price of margarine rises.
This is because it is only natural for people to switch to the next best alternative (substitute) that fills the same purpose or needs.
3. Remember Ice cream and ice cream cones complementary goods; meaning the demand for one increases the demand for the other and vice versa.
4. If the price of ice cream increases, demand would also decrease for ice cream as consumers are usually sensitive to price.
This decrease in the demand for ice cream would also affect ice cream cones since they complement each other, leading to a decrease in the demand for ice cream cones.
Answer:
Increase the aggregate demand. This means, that the total demand for goods and services within a particular market will increase
Explanation:
The future expectations of an improving economy increase the aggregate demand. This means, that the total demand for goods and services within a particular market will increase as there is more trust in the market.
The rise in the income is another important factor for the aggregate demand to increase. With improving expectations the consumers will think that they income will improve and therefore their consumption levels.
Answer:
The rate of return expected on this project by Cold Goose Metal Works Inc. is 15.20%
Explanation:
Since flotation cost is 4% that implies that $500,000 is actually 96% (100%-4%) of the cash proceeds from the capital funding,hence funds raised is computed thus:
funds raised=$500,000/0.96=$520,833.33
Annual return on investment=cash inflow-initial cash outflow
cash inflow is $600,000
cash outflow is $520,833.33
annual return on investment=$600,000-$520,833.33=$79166.67
rate of return on project=annual return on investment/initial investment
=$79,166.67
/$520,833.33*100=15.20%
The rate of return that Cold Goose Metal Works Inc is 15.20%
Answer: B. raise the discount rate, make open market sales are two things that both decrease the money supply.
Explanation: If the discount rate is high, less banks are likely to borrow money from the Federal Reserve because they will be paying a higher interest rate on the borrowed funds. Open market refers to banks buying and selling different government entities in an open market.
