All categories

3 years ago

At the point where actual inflation is equal to expected inflation

Business

1 answer:

Yuri [45]3 years ago

6 0

Answer: The short run Phillips curve intersects the long run Phillips curve.

Explanation: The Phillips curve states that unemployment and inflation have an inverse relationship. This means that they move in opposite directions, I.e. If inflation increases then unemployment decreases and vice versa.

In the graph attached the short run Phillips curve is L - shaped and shows the inverse relationship between both variables initially. The long run Phillips curve is a vertical line, and shows that unemployment rate remains steady regardless of inflation rate, in the long term. Where these 2 lines intersect is where actual inflation and expected inflation are the same.

You might be interested in

The ending retained earnings balance of the Taco Heaven restaurant chain increased by $2.6 million from the beginning of the yea

Vika [28.1K]

Answer: $4.1 million

Explanation:

From the question, we are informed that the ending retained earnings balance of the Taco Heaven restaurant chain increased by $2.6 million from the beginning of the year and that the company had declared a dividend of $1.5 million.

The net income earned during the year will be:

= $2.6 million + $1.5 million

= $4.1 million

5 0

3 years ago

Your corporation has a marginal tax rate of 35% and has purchased preferred stock in another company. The before-tax dividend yi

Leni [432]

Answer:

5.37%

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the company’s after tax return on preferred by using following formula:-

Company’s After Tax Return = Before Tax Dividend Yield Rate on Preferred Stock × [1 - (1 - Dividend Exclusive) × (Tax Rate)]

= 6% × [1 - (1 - 70%) × (35%)]

= 0.06 × [1 - (1 - 0.70) × (0.35)]

= 0.06 × [1 - (0.30) × (0.35)]

= 0.06 × (1 - 0.105)

= 0.0537

= 5.37%

We simply applied the above formula to determine the company after tax return

8 0

3 years ago

What is an agricultural marketing cooperative that helps members sell their products?

Blizzard [7]

This question provides the defition for a producer cooperative

7 0

3 years ago

The purpose of the ________ of performance appraisal is to keep managers from being excessively lenient and having a disproporti

Kitty [74]

Answer: forced distribution method

Explanation:

JUST DID IT

8 0

3 years ago

company's perpetual preferred stock currently sells for $92.50 per share, and it pays an $8.00 annual dividend. If the company w

andrew11 [14]

Answer:

The firm's cost of preferred stock is 9.10%

Explanation:

The cost of preferred stock with the flotation of 5% would be the dividend payable by the preferred stock divided by the adjusted current market price(adjusted for flotation cost)

The dividend per year is $8

The adjusted price of the stock=$92.50*(1-f)

where f is the flotation cost in percentage terms i.e 5%

adjusted price of the stock is =$92.50*(1-5%)=$ 87.88

Cost of preferred stock=$8/$87.88*100 = 9.10%

4 0

3 years ago