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3 years ago

With respect to the consumer price index, the substitution bias arises because:

Business

1 answer:

natita [175]3 years ago

5 0

Answer:

a. prices of goods and services do not change in the same proportion from year to year.

Explanation:

Substitution bias describes a possible bias in economic index numbers if they do not incorporate data on consumer expenditures switching from relatively more expensive products to cheaper ones as prices changed.

Substitution bias occurs when prices of items change relatively to one another. It considers how consumer expenditures are reflected in a consumer price index. Consumers will tend to buy more of the good whose price declined, and less of the now relatively more expensive good.

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Ward and June are in the 32% tax bracket. A bond of Dell Computer Corporation with a face value of $10,000 is included in their

polet [3.4K]

Answer:

Tax Savings = 200

Explanation:

If Ward and June carry the bond, tax would be:

⇒ Interests * tax rate

⇒ 1000 * 32% = 320

They gift bond to their son, Wally, whose tax would be:

⇒ Interests * tax rate

⇒ 1000 * 12% = 120

The tax savings related to the transfer of Bond is:

⇒ 320 - 120 = 200

5 0

3 years ago

Read 2 more answers

The 80/20 principle holds that 20 percent of all customers generate 80 percent of the demand. Although the percentages usually a

kotegsom [21]

Answer: usage-rate segmentation

Explanation: Usage-rate segmentation divides a market by the quantity of product bought or consumed. The 80/20 principle holds that 20 percent of all customers generate 80 percent of the demand.

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3 years ago

On June 15th, Buehler Company sells merchandise on account to Chaz Co. for $1,000, terms 2/10, n/30. On June 20th, Chaz Co. retu

mestny [16]

Answer:

$ 686

Explanation:

Given:

Amount paid = $ 1000

Discount offered = 2/10 = 2%

Value of returned merchandise = $ 300

Cash received = $ 1000 - $ 300 = $ 700

now 2 % deduction for the return within the given return period

thus,

net cash received = $ 700 - ( 2% of $ 700 )

net cash received = $ 700 - $ 14

hence,

net cash received = $ 686

6 0

3 years ago

Power distance refers to the extent of the gap between

iogann1982 [59]

Answer:

Option "D" is the correct answer to the following question.

Explanation:

Power distance is a type of inter-boundary that is found in different individuals within the same society. Power distance is not found to be appropriately distributed in the society, it is usually the thinking of lower ranks.

The more complexities in a culture, the more the difference between individuals will increase.

But in the modern era, people from different cultures are working together, due to which people of lower rank are also encouraged to move forward.

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3 years ago

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of ret

Sergio [31]

Answer:

financial leverage

Explanation:

Preferred stocks are very similar to bonds since they both yield fixed returns. The difference is that interest paid on bonds is called coupon while interest paid on preferred stock are considered dividends. But they essentially are the same, they both represent debt. The advantage of preferred stock is that when a company doesn't make a profit it doesn't need to pay dividends, while it should always pay coupons.

Whenever you take a loan and use it to finance your business activities, it is called financial leverage. When the investment produces a higher return than the interest paid, the company's equity increases.

3 0

4 years ago