Answer:
c) a firm does not have sufficient time to change the level of use some of its inputs.
Explanation:
The definition of short-run in economics is not a term to be used for a specific certain period of time but it means that the period of time is too short that the firms cannot change the level they are using of some of their inputs or costs. It means they do have fixed costs they cannot change. For example, all machinery installed, a yearly rent paid, electricity or others that the firm cannot change unless there is sufficient time. In a short period of time, it will have those costs anyway. The firm cannot change the level of that input. And it is short run of at least one input. It may be many. But it is not necessary to have all inputs unchanged to consider that period of time as short-run.
However, firms can change level of inputs if they have more time. That is cost the long run. All costs are variable costs when we are in long run.
The increase in demand and limited availability or unchanged availability of supply= Price Increase
Answer:
The simple rate of return on the investment is closest to 7.41%.
Explanation:
This can be calculated as follows:
Equipment cost = $135,000
Annual profit = Annual sales revenue - Annual operating expenses - Annual depreciation on the equipment = $75,000 - $38,000 - $27,000 = $10,000
Therefore, we have:
Simple rate of return on the investment = Annual profit / Equipment cost = $10,000 / $135,000 = 0.0741, or 7.41%
Therefore, the simple rate of return on the investment is closest to 7.41%.
In an economy where the money supply and aggregate demand have been decreased by the central bank, you know that the central bank is using a contractionary monetary policy.
In an economy, changes in the money supply leads to changes in aggregate demand. An increase in the money supply increases aggregate demand and a decrease in the money supply decreases aggregate demand.
When a central bank takes action in order to decrease the money supply and increase the interest rate, it is following a contractionary monetary policy. Thus, the central bank requires Southern to hold 10% of deposits as reserves.
Hence, the decrease in the money supply reduces income and raises the interest rate.
To learn more about aggregate demand here:
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