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Evgesh-ka [11]
3 years ago
5

Workers and firms both expect that prices will be​ 2.5% higher next year than they are this year. As a​ result, A. the purchasin

g power of wages will rise if wages increase by​ 2.5%. B. aggregate demand will increase by​ 2.5% C. workers will be willing to take lower wages next​ year, but not lower than a 2.5 percent decrease. D. the​ short-run aggregate supply curve will shift to the left as wages increase.
Business
1 answer:
Mice21 [21]3 years ago
6 0

Answer: The correct answer is option (B); Aggregate demand will increase by 2.5%

Explanation: The reason is due to what economists term as “Consumer behavior.” A consumer would normally be willing to purchase more of a commodity if the price becomes lower, and conversely he/she would be willing to purchase less if the price becomes higher (law of demand).

However, there is also what economists term “abnormal demand,” which is an opposite to the law of demand and in this case, consumers will be wiling to pay more for a commodity or service as the price begins to go up.

There are a number of factors responsible for an abnormal demand in the market and these include;

(1) Giffen goods: inferior goods such that as the price reduces, consumers buy less of such goods and shift their attention to a better quality commodity.

(2) Luxury goods: such goods that have some status symbol or prestige attached to them would have a higher demand even if the price goes up.

(3) Price illusions: Where consumers are under the impression that a higher price indicates better/higher quality, they would be willing to increase their demand even if the price goes up.

(4) Anticipation of price increase: When consumers sense there would be a future increase in price, they would increase their demand now to cushion the impact on their income when the increase eventually occurs.

Upon close observation the scenario described above is exactly what we have in point number 4. The workers and firms have information that prices would go up next year, which means their purchasing power would have reduced by then. The tendency therefore is for consumers to purchase now, hoping that when the price increment is effected, they would not be concerned about spending more to buy what they had bought for less earlier.

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The following information was available for the year ended December 31, 2019: Net sales $ 894,250 Cost of goods sold 616,850 Ave
iogann1982 [59]

Answer:

Explanation:

Net sales - $894,250

Cost of Goods - $ 616850

Average account receivable - $40,650

Account receivable at year end - $28200

Average inventory - $182000

Inventory at year end - $158,000

Inventory turn over

Cost of Goods sold / Average inventory for the period

616850/182000= 3.40 times

No of days sales in inventory = Ending inventory / Cost of Goods sold *365

158000/616850*365 = 93.5 days

Account receivable turnover = net credit sale / average receivable

894250/40650=21.9

No of days sales in account receivable -

Receivable at year end/total credit sales*365

28200/894250*365= 11.5 days

7 0
3 years ago
Alice is willing to spend $30 on a pair of jeans, and has a coupon for $10 off she found online.
oee [108]

Answer:

$5

Explanation:

The computation of Alice's consumer surplus is shown below:

Consumer surplus =  Willing to spend - Market price after considering the discount

where

Willing to spend = $30

Market price equals to

= Purchase a pair of jeans - coupon rate

= $35 - $10

= $25

So, the consumer surplus is equal to

= $30 - $25

= $5

3 0
3 years ago
Gina induces hugh to enter into a contract for the purchase of a condominium about which gina knowingly misrepresents a number o
marysya [2.9K]

In a condition where Gina induces Hugh to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features, Hugh can rescind from entering into the contract on the basis of fraud when he discovers about the truth of Gina's wrongful intentions.

<h3>What is the significance of a fraud?</h3>

A fraud can be referred to or considered as a situation that arises when either of the parties to a contract is unaware of the wrongful intentions of the other party at the time of entering into the contract.

Therefore, the significance regarding a fraud has been aforementioned.

Learn more about a fraud here:

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4 0
1 year ago
Joe bought a stock at $57 per share. The price promptly fell to $55. Joe held on to the stock until it again reached $57, and th
Y_Kistochka [10]

Answer: Weak form EMH

Explanation:

Weak form efficiency is also called the random walk theory states that past volume, price movements and earnings do not affect the price of a stock and can not be used to forecast its future direction. Weak form efficiency states that prices of future securities are random and not determined by past events and that there is no relationship between past information and current market prices.

The principle of weak form efficiency has been contradicted because other investors are making use of Joe's past information to create a trading pattern.

4 0
3 years ago
The United States is___. A. the leading exporter, but not the leading importer in the world B. the leading importer and exporter
Simora [160]

C. The leading importer, but not the leading exporter in the world

US is only the third largest exporter but it is the largest exporter

7 0
3 years ago
Read 2 more answers
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