All categories

3 years ago

Assume the real rate was 9.5% and the inflation rate was 4%. Using the Fisher Effect, what was the nominal rate?

Business

1 answer:

Paul [167]3 years ago

6 0

Answer:

13.88%

Explanation:

According to the fisher effect

(1 + nominal rate) = (1 + real rate) x (1+ inflation rate)

= (1.095) x (1.04) = 1.1388

(1 + nominal rate) = 1.1388

Nominal rate = 1.1388 - 1 = 0.1388 = 13.88%

You might be interested in

Which best describes the role of financial planning?

Natasha_Volkova [10]

Investing and saving

8 0

3 years ago

Dee's has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91. Sam's has a fixed asset turnover rate of

Andreyy89

Answer:

B.utilizing its total assets more efficiently than Sam's

Explanation:

Dee's has a fixed asset turnover rate of 1.12 and a total asset turnover rate of 0.91. Sam's has a fixed asset turnover rate of 1.15 and a total asset turnover rate of 0.88. Both companies have similar operations.

Based on this information, although Sam seems to be utilizing its fixed assets more efficiently, Dee's must be doing utilizing its total assets more efficiently than Sam's

The fixed asset turnover ratio is an efficiency ratio that measures a companies return on their investment in property, plant, and equipment by comparing net sales with fixed assets. In other words, it calculates how efficiently a company is a producing sales with its machines and equipment.

Dee's has a total asset turnover rate of 0.91 compared to a total asset turnover rate of 0.88 by Sam. Hence Dee's efficiency is higher.

5 0

3 years ago

Assume Baldwin is producing 2,498 units of Bill next year. What would Bill's plant utilization be?

Digiron [165]

Answer: Option A

Explanation:

The production utilization is the use of the productive capacity of the firm. It shows the extent to which the production capacity of the firm can be used to produce the goods in the firm.

It shows the relationship between the output that has been produced with the equipment that has been installed in the enterprise. If the capacity of the firm is totally utilised, it is very efficient and can be used to produce the maximum amount of goods of that enterprise.

3 0

3 years ago

A local company makes athletic clothing and they are preparing aggregate production plans on a quarterly basis for the coming ye

My name is Ann [436]

I think is is 125 hope its right

3 0

3 years ago

uppose the annual demand function for the Honda Accord is Qd = 430 – 10 PA + 10 PC – 10 PGwhere PA and PC are the prices of the

emmainna [20.7K]

Answer:

Qd = 400 units

elasticity of demand of the Accord with respect to the price of Camry = 0.5

elasticity with respect to the price of gasoline = -0.075

Explanation:

Solution:

The annual demand function for the Honda Accord is:

Qd = 430 – 10 PA + 10 PC – 10 PG

Where,

PA = Price of Honda Accord

PC = Price of Honda Camry

PG = Price of Gasoline per gallon.

Selling Price of both cars = $20,000

Fuel Cost = $3 per gallon.

a) Elasticity of Demand of the Accord with respect to the price of Camry.

First, we need to calculate the number of units demanded.

Qd = 430 – 10 PA + 10 PC – 10 PG

Qd = 430 – 10 (20) + 10 (20) – 10 (3.00)

Qd = 430 - 200 + 200 - 30

Qd = 430 - 30

Qd = 400 units

Cross-price elasticity of the Accord with respect to the price of the Camry will be:

Cross Price = (dQd/dPC) x (PC)/(Qd)

dQd/dPC = 10

PC = 20

Qd = 400

So,

Cross Price = 10* 20/400

Cross Price = 0.5

b) Elasticity with respect to the price of gasoline?

Elasticity = (dQd/dPG)*(PG/Qd)

dQd/dPG = -10

PG = 20

Qd = 400

Elasticity = (-10)*(3/400)

Elasticity = -0.075

5 0

3 years ago