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Rainbow [258]
3 years ago
9

As the price level falls a. people will want to hold more money, so the interest rate rises. b. people will want to hold more mo

ney, so the interest rate falls. c. people will want to hold less money, so the interest rate falls. d. people will want to hold less money, so the interest rate rises
Business
1 answer:
icang [17]3 years ago
8 0

Answer:

The answer is C.

Explanation:

As the general price level decreases or falls, people will want to hold less money, so the interest rate falls.

As price level falls, value of money decreases because a unit of money will more of goods or services.

During this period people will want to hold less money because of the decrease in value and the excess money will be deposited in banks.

With this, the banks have more money to lend out and this will make the bank to reduce its Interest rate.

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7 0
3 years ago
Suppose the government increases taxes by ​$11110 billion and the marginal propensity to consume is 0.990. By how will equilibri
Helen [10]

Answer:

- $1,099,890 billion.

Explanation:

Marginal propensity to consume (MPC) = 0.990

Tax multiplier = - MPC ÷ (1 - MPC)

= - 0.990 ÷ (1 - 0.990)

= - 9 9

change in GDP = Change in taxes × Tax multiplier

                         = $11110 × (-99)

                         = - $1,099,890

the minus sign shows a decrease

Hence, the change in equilibrium GDP is - $1,099,890 billion.

5 0
3 years ago
What are the fundamental differences between mutual funds and hedge funds?
Nady [450]
The correct answers are: 

<span>A.)mutual funds are more strictly regulated than hedge funds
</span><span>D.)mutual funds collect money from investors while hedge funds from companies

Mutual funds are investment programs that are funded by shareholders while hedge funds are invested funds from borrowed money. In terms of an investment program, mutual funds are more effective.</span>
6 0
3 years ago
Read 2 more answers
Beedle issued a 10-year bond to Aeron Company on 1/1/20x6. The bonds have a 6% annual interest rate and pay interest semi-annual
Mama L [17]

1. The issue price of the bonds is<u> $215,589.16</u>.

2. An amortization schedule through 20x9 is as follows:

<h3>Amortization Schedule:</h3>

Period       PV             PMT   Interest Expense  Amortization        FV

1       $215,589.16     $6,000       $5,389.73            $610.27      $214,978.89

2      $214,978.89    $6,000      $5,374.47           $625.53      $214,353.36

Year 2

3     $214,353.36     $6,000      $5,358.83             $641.17        $213,712.20

4      $213,712.20     $6,000      $5,342.80           $657.20      $213,055.00

Year 3

5    $213,055.00     $6,000      $5,326.38            $673.62        $212,381.38

6     $212,381.38     $6,000      $5,309.53            $690.47        $211,690.91

Year 4

7      $211,690.91    $6,000      $5,292.27             $707.73        $210,983.18

8     $210,983.18    $6,000      $5,274.58            $725.42       $210,257.76

3. The journal entry recorded by Beedle on January 1, 20x6 is as follows:

Debit Cash $215,589.16

Credit Bonds Payable $200,000

Credit Bond Premium $15,589.16

  • To record the issuance of $200,000 at 6% interest, semi-annually.

4. The amount in the accounts at the end of 20x6 are:

A. Bond payable $200,000

B. Premium $14,353.36 ($15,589.16 - $610.27 = $625.53)

C. Fair value adjustment on Bond payable = $1,235.80 ($610.27 = $625.53)

D. Interest expense = $10,764.20

5. The journal entry to record the bond retirement transaction on 12/31/20X8 is as follows:

Debit Bonds Payable $200,000

Debit Bonds Premium $12,000

Credit Cash $212,000

  • To record the bond retirement.

<h3>Data and Calculations:</h3>

Maturity period = 10 years

Interest rate = 6% semi-annually

Interest payment dates = June 30 and December 31

Market rate = 5%

Face value = $200,000

Semi-annual coupon payment = $6,000 ($200,000 x 3%)

Fair value of the bonds at December 31:

12/31/20X6 $ 213,200

12/31/20X7 $ 213,300

12/31/20x8 $ 212,000

<h3>Issue Price Calculations:</h3>

N (# of periods) = 20 (10 years x 2)

I/Y (Interest per year) = 5%

PMT (Periodic Payment) = $6,000 ($200,000 x 6% x 1/2)

FV (Future Value) = $200,000

Results:

PV = $215,589.16

Sum of all periodic payments = $120,000 ($6,000 x 20)

Total Interest $104,410.84

Learn more about recording bond transactions at brainly.com/question/15877561

#SPJ1

5 0
2 years ago
You want to buy a car, and a bank will lend you $15000. The loan will be fully amortized over 5 years(60 months), and the nomina
inysia [295]

Answer:

a) $ 333.67

b) 12.6825

Explanation:

a) The 333.67 amount is the payment per month without interest and of course interest will differ from month to month as the loan is amortized monthly. to get the payment using financial calculator its N= 60,  I/YR = 12%/12=0.01, 15000=PV, FV=O THEN COMPUTE PMT

OR use the formula pmt= PV/1-1/(1+rate)^time/rate

b) To get EAR = (1+ rate/ compounding)^compounding-1

(1+0.12/12)^12-1

6 0
3 years ago
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