The rule of 70 applies in any growth-rate application. Let’s say you have $2000.00 in savings and you have three alternatives fo
1 answer:
Answer:
(a)70 years
(b)23.33 years
(c)8.75 years
Explanation:
According to the Rule of 70, for a given interest rate x, funds double in years.
(a)For a savings account earning 1% interest per year,
The number of years it will take the fund to double= =70 years
(b)For a U.S. Treasury bond mutual fund earning 3% interest per year.
The number of years it will take the fund to double= =23.33 years
(c)For a stock market mutual fund earning 8% interest per year.
The number of years it will take the fund to double= =8.75 years
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Answer:
no surplus or shortage
Explanation:
Equilibrium price is the price at which quantity demand equal quantity supplied. Above equilibrium price there is a surplus - quantity supplied exceeds quantity demanded.
Below equilibrium price there is a shortage - quantity demanded exceeds quantity supplied
If demamd increases by 100, new equilibrium is 40
Thus, ceiling price equal equilibrium
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.
Effects of a binding price ceiling
It leads to shortages
it leads to the development of black markets
it prevents producers from raising price beyond a certain price
It lowers the price consumers pay for a product. This increases consumer surplus
