Answer:
It illustrates that the classical model of the price level best applies to economies with persistently high inflation.
Explanation:
When a very low inflation rate has been constant in an economy, and the money supply increases suddenly, in the short run that change will not immediately increase the inflation rate, but instead it will increase real output.
Classical economists argue that an increase in the money supply will immediately affect the inflation rate, but that theory applies mostly to economies that have a certain level of inflation. For example, for the past 12 years, European nations have been experiencing very low inflation rates, sometimes even negative rates. But during that same period, the European Central Bank has carried on a huge expansionary policy. It favored economic growth, although not as much as expected, but it didn't skyrocket inflation rate as the classical economy model predicted.
Answer:
The correct answer is the option C: give too much weight to a small number of vivid observations.
Explanation:
To begin with, in the case that a close friend had told you that he had a bad experience in a certain place, a restaurant in particular this time, does not states the fact that it will always be like that for every person that goes to that place because it may have been a bad day for the employees and that impacts at their work while if you go any other day every detail is taking care nicely. Therefore that the people give too much weight to small number of vivid observations due to the fact that the article published in the newspaper must have been made with over dozens of observations and comments, not just one, and the major agreement is that those places are good ones to go to eat.
Answer:
$-13,975.91
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-95,000
Cash flow in year 1 = $30,000
Cash flow each year from 2 to 5 = $20,000
I = 12%
NPV = $-13,975.91
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
False
Explanation:
Ordering costs are the costs incurred when materials are requested for. These components of this cost are:- 1)Clerical and administrative costs involved in purchasing and accounting for the goods ordered.
2)Cost of transportation
3)Retooling cost: This happens when the product is manufactured internally. Retooling means change of working tools.
4)Insurance while in transit.
5)Drivers' salaries and allowances
6)Loss of materials while in transit.
7)Taxes, custom duties and import duties.
