All categories

4 years ago

Nominal incomes generally increase with inflation because

Business

1 answer:

alex41 [277]4 years ago

5 0

Answer:

The correct answer is option A.

The correct answer is option C.

Explanation:

When inflation is anticipated the average nominal income will also increase by the same rate as inflation. In the process of inflation the general price level increases. it will cause an increase in production. This further causes an increase in the nominal income of the individuals.

If inflation is expected will not affect the purchasing power of the consumer. This is because the nominal income will increase by the same rate as an increase in inflation. So the decrease in purchasing power due to increased prices will be canceled out by the increase in nominal wages. As a result, the average consumer will be unaffected.

You might be interested in

Assuming the correlation between the annual returns on the two portfolios is indeed zero, what would be the optimal asset alloca

den301095 [7]

Since you provide no relevant number,

In order to find out the optimal Asset allocation, you should find out which investment opportunities that Provide the highest return with the lowest standard deviation in the risk department

hope this helps

4 0

3 years ago

How do contact lists differ from and address book

mel-nik [20]

Contact lists contain more information about a person than an address book.

~apex

7 0

4 years ago

Read 2 more answers

Drew wants to save $2,500 to go to the next World Cup. To the nearest dollar, how much will he need to invest in an account now

Akimi4 [234]

Answer:

195

Explanation:

FV/ (1 + r/m)^nm = pv

FV = Future value

P = Present value

R = interest rate

m = number of compounding

N = number of years

2500 / (1 + 0.0625/365)^365 x 4

2500 / (1.000171) = 2499.57

4 0

3 years ago

The market for laundry detergents in a country has several players, each with a slightly differentiated product. Squeaky Clean

Vera_Pavlovna [14]

Answer:

C) The current prices of most of Squeaky Clean's products are lower than the prices of competing brands.

Explanation:

If Squeaky laundry detergent is cheaper than its competition, then it should have certain room for increasing its price. They should be careful not to increase Squeaky's price above the competition since probably a significant part of their sales is due to its lower price. As long as Squeaky's price is still lower than its competition, its demand shouldn't be affected.

8 0

3 years ago

he appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1

rewona [7]

Answer:

Thus, the present value is $2045.52.

Explanation:

Use the below formula to find the present value:

Present value = FV ÷ (1 + r/4)^(n*4)

Present value :

$=\frac{700}{(1 + \frac{0.08}{4} )^{1 \times 4} } + \frac{700}{(1 + \frac{0.08}{4} )^{2 \times 4} } + \frac{0}{(1 + \frac{0.08}{4} )^{3 \times 4} } +\frac{1100}{(1 + \frac{0.08}{4} )^{4 \times 4} } \\ \\= \frac{700}{1.0824}+\frac{700}{1.1716} +0+\frac{1100}{1.3727} \\= 2045.52$

Thus, the present value is $2045.52.

4 0

3 years ago