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brilliants [131]
4 years ago
12

Why does the​ self-correcting mechanism stop working when the policy rate hits the zero lower​ bound?

Business
1 answer:
Alex73 [517]4 years ago
4 0

The available options

A. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

B. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses saving and investment and therefore further widens the output gap.

C. The​ self-correcting mechanism stops working because the rising inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses planned spending and further widens the output gap.

D. The​ self-correcting mechanism stops working because the rising inflation produced by a positive output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease enhances planned spending and further widens the output gap.

Answer:

A

Explanation:

For a given situation in the question above the correct answer is Option A, which is: The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

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shusha [124]

A(n) dr Business Continuity Plan ensures that important commercial enterprise functions continue if a catastrophic incident or catastrophe happens.

A business is described as an enterprise or enterprising entity engaged in industrial, industrial, or expert activities. companies can be for-earnings entities or non-profit agencies. business sorts a variety from limited liability businesses to sole proprietorships, agencies, and partnerships.

An enterprise reason describes the cause, or reason, that an organization becomes, to begin with based. It describes what makes a commercial enterprise precise, in addition to what the commercial enterprise plans to do. A business case isn't always an undertaking or price announcement and is a good deal shorter than each. commercial enterprise ethics refers back to the standards for morally right and wrong behavior in business. law partially defines the conduct, however “legal” and “moral” are not always the same. commercial enterprise ethics enhances the law by outlining acceptable behaviors beyond government control.

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7 0
2 years ago
The balance in the Prepaid Rent account before adjustment at the end of the fiscal year is $10,000, which represents five months
kodGreya [7K]

Answer: debit Rent Expense, $2,000; credit Prepaid Rent, $2,000---D

Explanation:

Balance in Prepaid rent account = $10,000

Rent expense = $10,000/5 months = $2,000

Adjusting journal entry To record the expiration of rent for December month  

Date Accounts Titles and Explanations Debit Credit

Dec. 31 Rent Expense ($10,000/5 months) $2,000  

  Prepaid Rent                                                           $2,000

debit Rent Expense, $2,000; credit Prepaid Rent, $2,000---D

8 0
3 years ago
What is the major decision facing kfc? 2. what factors are important in understanding this decision situation?
stepan [7]

The major decision kfc is facing is that about the appeal. The decision is that whether to appeal to the healthy market or to the indulgent market.

And the factors which are important in understanding this decision situation are: the responsibility of fast food market, the need vs demand of the people, and the lasting impact.

5 0
3 years ago
Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data
almond37 [142]

Answer:

The factory overhead allocated per unit of Blinks is b.$19.50

Explanation:

It is Important to note that  Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours.

A plant Wide Overhead rate is a function of the Total Overheads of a Company divided by the Total Labor Hours in the Company

<u>Total Overheads:</u>

Fabrication Department  $84,000

Assembly Department     $72,000

Total                                 $156,000

<u>Total Labor Hours :</u>

Fabrication Department                                             0

Assembly Department ( 1,000 × 4) + (2,000×2)     8,000

Total                                                                          8,000

Note :  <em>labor hours take place only in the Assembly Department</em>

<u>Plantwide overhead rate :</u>

Plantwide overhead rate = Total Overheads / Total Labor Hours

                                           =  $156,000 / 8,000

                                           =  $ 19.50

7 0
3 years ago
Read 2 more answers
Use the following corporate bond quote information to answer the questions that follow. Since this is a corporate bond,
Lynna [10]

Answer:

Check the explanation

Explanation:

Bond             Cur.Yld.      Vol.   Close      Net Chg.  

Doh! 9 ½ 18     9.0          5      105 1/2      - 1/4  

Doh! 8 ½ 21     9.4        10      90 1/4        -1/2  

 

 

1.  As given in question:  

Closing Price of the first bond:    =105.5*10  

 =1055  

 

Closing Price of the second bond:  =90.25*10  

 =902.5

2.  Yesterday's price for first bond:  =(105.5+0.25)*10

 =1057.5  

 

Yesterday's price for second bond:  =(90.25+0.5)*10

 =907.5

3.  kindly check the attached image below to see the solution to question 3

4.  Capital Gain Yield for first bond  =(P1-P0)/P0

 =(1055-1057.5)/1057.5

 =-0.236%

7 0
3 years ago
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