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tino4ka555 [31]
3 years ago
11

An article in the Wall Street Journal on the housing market states that​ "Steady job​ growth, rising wages and low interest rate

s have helped prop up housing​ demand." ​Source: Steven​ Russolillo, "Why the Housing Market is Getting​ Stronger," Wall Street Journal​, May​ 22, 2016. Why do low interest rates increase the demand for​ housing?
Business
1 answer:
tensa zangetsu [6.8K]3 years ago
6 0

<u>Solution and Explanation:</u>

Since interest rate is the cost of borrowing, lower interest rate decreases the cost of borrowing for housing mortgage, which increases demand for housing.

It is very much clear from the demand and interest rate have a certain relationship. If the interest rate on a particular amount is lower then the customers will try to get more amount as the cost on such amount will be less which means the burden on the customers would be lower.

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Carter Corporation has some money to invest, and its treasurer is choosing between City of Chicago municipal bonds and U.S. Trea
padilas [110]

Answer:

If Chicago municipal bonds yield  is 10% then Carter's treasurer make indifferent between the two.

Explanation:

Because Treasury Bond is exempt from tax income and both have same maturity, and they are equally risky and liquid; we then have the equation as below

Treasury bonds yield = Chicago municipal bonds yield after tax

⇔ 6% = Chicago municipal bonds yield * (1 - tax rate 40%)

⇔ 6% = Chicago municipal bonds yield * 0.6

⇒ Chicago municipal bonds yield = 6%/  0.6 = 10%

3 0
3 years ago
using pricing, a company initially charges a low price, both to discourage competition and to grab a sizeable share of the marke
OleMash [197]

Using penetration pricing, a company initially charges a low price, both to discourage competition and to grab a sizeable share of the market.

In order to attract customers, the penetration pricing approach entails launching a new good or service at a cheap price. Gaining market share and aggressively attracting clients through low costs are the objectives. In a pricing strategy known as penetration pricing, a product's price is first set very low to quickly reach a large portion of the market and spread word of mouth. The tactic relies on the notion that consumers will transfer to the new brand as a result of the price reduction.

When companies launch a low price for a brand-new good or service, this is known as penetration pricing. Competitors are compelled to match the offer or immediately implement alternative techniques since the first price undercuts it. Customers of rivals could switch to the less expensive product.

Learn more about penetration pricing here: brainly.com/question/3521758

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5 0
1 year ago
Often consumers base their perception of price on what they perceive to be the customary or ________.
ycow [4]
Based on other stores, and what their prices are too
3 0
3 years ago
Read 2 more answers
Consider a single period problem where the riskless interest rate is zero, and there are no taxes. A firm consists of a machine
kifflom [539]

Assuming the firm has 100 shares outstanding and debt with a face value of $50 due at the end of the period. The share price of the firm is $0.95.

<h3>Share price</h3>

First step is to calculate the expected payoff to equity

Expected equity=[($80 ×0.5) + ($210 × 0.5)]-$50

Expected equity=($40+$105)-$50

Expected equity = $145-$50

Expected equity=$95

Now let calculate the share price

Share price=$96/100 shares

Share price=$0.95

Inconclusion the share price of the firm is $0.95.

Learn more about share price here:brainly.com/question/1166179

8 0
2 years ago
During January 2018, the following transactions occur:
umka2103 [35]

Answer:

See explanation section

Explanation:

Jan. 1     Equipment           Debit        $20,300

             Cash                     Credit       $20,300

To record the purchase of equipment assuming by cash.

Jan. 4    Accounts payable    Debit        $10,300

             Cash                         Credit        $10,300

To record the cash paid to accounts payable.

Jan. 8     Purchase           Debit        $90,900

              Accounts payable              Credit       $90,900

To record the purchase of additional inventory (supplies) on account

Jan. 15    Cash                             Debit        $22,800

              Accounts receivable   Credit       $22,800

To record the cash received from customers

Jan. 19    Salaries expense         Debit       $30,600

               Cash                             Credit      $30,600

To record the cash paid for salaries expense

Jan. 28    Utilities expense         Debit       $17,300

               Cash                            Credit       $17,300

To record the cash paid for utilities expense

Jan. 30    Accounts receivable   Debit       $228,000

               Sales                            Credit       $228,000

To record the sales on account.

6 0
3 years ago
Read 2 more answers
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