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3 years ago

If the money supply is $500 and nominal income is $3,000, the velocity of money is A. 1/60. B. 1/6. C. 6. D. 60.

Business

1 answer:

algol [13]3 years ago

5 0

Answer:

The correct option is c.6

Explanation:

For computing the velocity of money, the following formula should be used which is shown below:

The Velocity of money = Nominal income ÷ money supply

where,

Nominal income is $3,000

and, the money supply is $500

Now put these values to the above formula so that we can find out the answer

So, the answer would be equal to

= $3,000 ÷ $500

= 6

Thus, the velocity of money is 6

Hence, the correct option is c.6

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3 years ago

In a 100-percent reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount

MariettaO [177]

Answer:

a M1 would not change.

Explanation:

the checkable deposits are part of M1 as well as the currency and coins. Therefore, a component of M1 decrease (currency) while another of M1 (checkable deposits) increase.

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3 years ago

A company issued $50,000 of 8%, 10-year bonds on January 1. The bonds pay semi annual interest. The present value factor of a si

inessss [21]

Answer:

$22,820

Explanation:

Calculation to determine Determine the present value of the par value of the bonds.

Discount rate =8%/2

Discount rate= 4%

Present value factor of 20 periods at 4%= ( 1 / 1.04^20 )

Present value factor of 20 periods at 4%=0.4564

Using this formula

Present value of the par value of the bond = Future value of the bond x Present value factor =

Let plug in the formula

Present value of the par value of the bond=$50,000 x 0.4564

Present value of the par value of the bond = $22,820

Therefore the present value of the par value of the bonds is $22,820

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3 years ago

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It is company policy to get "slotting allowance" in order to secure shelf space for new brands.

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3 years ago

You are given the following information about equipment that is required for your business. Assume that the equipment will be re

s2008m [1.1K]

Answer:

Machine B EAC is $17,705.78 more than Machine A EAC.

Explanation:

First find the present values of the cost of both machines.

Machine A:

= 200,000 + (15,000 * Present value of annuity interest factor, 15%, 8 years)

= 200,000 + ( 15,000 * 4.4873)

= $‭267,309.5‬0

Machine B

= 300,000 + (17,500 * Present value of annuity interest factor, 15%, 10 years)

= 300,000 + 17,500 * 5.0188

= $‭387,829‬

Equivalent Annual cost Machine A:

= [(NPV * Required return) / 1 - (1 + Required return) ^–Number of Periods

=[(267,309.50 * 15%) / 1 - 1.15⁻⁸

= $59,569.95

Equivalent Annual cost Machine B:

= (387,829 * 15%) / (1 - 1.15⁻¹⁰)

= $77,275.73

Difference:

= 77,275.73 - 59,569.95

= $‭17,705.78‬

4 0

2 years ago

If the money supply is​ $500 and nominal income is​ $3,000, the velocity of money is A. ​1/60. B. ​1/6. C. 6. D. 60.

If the money supply is $500 and nominal income is $3,000, the velocity of money is A. 1/60. B. 1/6. C. 6. D. 60.