Answer:
The correct answer is:
A) monetary policy is very expansionary.
Explanation:
In this case the Taylor Rule states that the Fed must increase rates as the target of the inflation is up the Gross Domestic Product. Therefore, according to the expansionary policy, the central bank employs certain mechanisms in order to look with favor on the economy. The main idea of this strategy is to be able to lower the interest rates and also to increase the aggregate demand.
Network Systems............................................................................
Answer:
The effective rate of interest in the fifth year is 6.15%
Explanation:
Mathematically, the effective rate of interest can be calculated as follows;
Reff = (1 + r/y)^y - 1
where;
r is the interest rate = 6% = 6/100 = 0.06
y is the period = 5 years
Substituting these values;
Reff = (1 + 0.06/5)^5 - 1
Reff = (1 + 0.012)^5 - 1
Reff = 1.012^5 - 1
Reff = 1.061457 - 1
Reff = 0.0615 which is 6.15%
In a world with perfect information, the answer is C. Higher returns compensate the investor for taking on higher risk.
Answer:
She should stay open, because the revenue of from dog grooming ($30 per dog), is still high enough to cover her variable cost of $20 per dog, even though she is operating at a loss.
Explanation:
Profit = Revenue - Total costs
Total costs = Fixed costs + variable costs
Profit = $30 - $35 = -$5 per dog
This shows she is operating at a loss of $5 per dog.
If a company does not make enough revenue to cover its total costs, then it is operating at a loss.
However such a company must consider its variable cost before deciding whether to shut down.
A company should only shut down if it is unable to make enough revenue to cover its variable cost.
If a company is operating at a loss but can at least cover its variable cost, then it should stay open at least in the short run.
