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Pavlova-9 [17]
3 years ago
14

U.S. Interest Rates during the Credit Crisis During the credit crisis, U.S. interest rates were extremely low, which enabled bus

inesses to borrow at a low cost. Holding other factors constant, this should result in a higher number of feasible projects, which should encourage businesses to borrow more money and expand. Yet many businesses that had access to loanable funds were unwilling to borrow during the credit crisis. What other factor changed during this period that more than offset the potentially favorable effect of the low interest rates on project feasibility, thereby discouraging businesses from expanding?
Business
1 answer:
Elan Coil [88]3 years ago
7 0

Answer:

The insufficient expected low cash flows from investment caused by low demand for goods and services by the household.

Explanation:

A recession refers to contraction of the business cycle when economic activity fall generally.

In order to get out of recession, governments usually employ macroeconomic policies like increasing government expenditure, reducing taxation, and increasing money supply.  When the money supply  is increased, it leads to fall in the interest rate.

Interest rate is a cost of investment; and it is expected that investment will rise when the interest rate falls. However, this was not so during the US credit crisis despite that U.S. interest rates were extremely low majorly due to low demand.

During the credit crisis, there was a general low demand for goods and services by the household. This made businesses to be discouraged from investing in new projects, because it was expected that low demand will lead low cash flows from the investment.

The insufficient expected low cash flows was therefore the major factor that discouraged businesses to borrow cheap funds that were allowed by the extremely low interest rate.

I wish you the best.

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Answer:

1. B

2. E

Explanation:

1. Consumer or buyers use the extended decision making as it is that decision making which involves high level of the purchase involvement, extensive internal and the extensive information search with complex evaluation of the alternatives. In case of automobiles, buyers will choose the extended decision making as it is expensive, infrequently purchased products.

2. As there is involvement of high risk of financial loss in the future purchasing power, for people or consumer, the automobiles have the situational involvement, it is the short term state which directs towards the attaching relevance of a situation or person. In other words, it is an state where, it establish a level of involvement when a consumer or person think of a specific situation or object.

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When does the company go in loss​
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4 0
3 years ago
Sudoku Company issues 24,000 shares of $8 par value common stock in exchange for land and a building. The land is valued at $236
nikitadnepr [17]

Answer:

The journal entry for the issuance of the stock is shown below:

Explanation:

Land A/c....................................................................................Dr    $236,000

Building A/c...............................................................................Dr    $378,000

 Common Stock A/c..................................................................................Cr $192,000

 Paid in Capital in excess of par value of Common stock A/c.......Cr   $422,000

Working Note:

Common Stock = Number of shares × Rate per share

= 24,000 × $8

= $192,000

Paid in Capital in excess of par value of Common stock = (Land + Building) - Common Stock

= ($236,000 + $378,000) - $192,000

= $614,000 - $192,000

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3 years ago
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Irina18 [472]

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The type of facility layout whereby machines, tools, and other resources move toward the product is referred to as fixed position layout.

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3 years ago
Read 2 more answers
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