Benefits of small amounts of inflation include more expansionary monetary policy, the placebo effect, and the facilitation of relative price changes.
<h3>What is meant by inflation?</h3>
Inflation is the term used to describe the rate of price rise for goods and services.
It is sometimes used to categorize inflation according to cost-push, demand-pull, and built-in factors.
The two most popular inflation measures are the Consumer Price Index and the Wholesale Price Index.
Inflation can be viewed favorably or badly depending on the perspective and rate of change.
Inflation may be advantageous for those who own tangible assets since it will raise the value of their holdings, such as real estate or goods that are kept in storage.
Inflation's primary causes include:
- Consumer-driven inflation
- Price-driven inflation
- more money available
- Devaluation
- increasing pay
- Regulations and policies
Benefits of Inflation: In order to meet increasing demand, production must increase. Additionally, debtors benefit from inflation because they can return their loans with funds that are less valuable than the funds they borrowed. This promotes borrowing and lending, which boosts expenditure on all levels once more.
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<span>4% X 18 (years) = 72.
Therefore, the investment will double in 18 years.</span>
Answer:
The balance in Salaries and Wages Payable at December 31, 2019 is $1,840
Explanation:
The computation of the balance in salaries and wages payable is shown below:
= Salaries and wages payable on January 31, 2020 - salaries and wages expense + salaries paid in January month
= $1,140 - $2,140 + $2,840
= $1,840
The other information which is given in the question is not relevant. So, it is not considered in the computation part.
If the poverty threshold for a family of four with two
children was $18,850 in 2004, then a family earning a total household income of
$354 per week would be counted as poverty-stricken because the family
would only get $18,408 per year and that is less than $18,850.
Answer:
B; it offers an expected excess return of 1.8%
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
For Stock A
The expected rate of return would be
= 5% + 1.2 × (9% - 5%)
= 5% + 1.2 × 4%
= 5% + 4.8%
= 9.8%
And, the expected return is 10%
So, the excess would be
= 10% - 9.8%
= 0.2%
For Stock B
The expected rate of return would be
= 5% + 1.8 × (9% - 5%)
= 5% + 1.8 × 4%
= 5% + 7.2%
= 12.2%
And, the expected return is 14%
So, the excess would be
= 14% - 12.2%
= 1.8%
