If the Fed mailed everyone a $1,000, the effect would be a <u>rise in prices, </u>output, and income.
<h3 /><h3>What happens when money is injected into the economy?</h3>
The Equation of exchange is:
<em>Money supply x Velocity of money = Price level x Quantity of goods and services produced </em>
If the Money supply increases like it will when $1,000 is sent by the Fed to people, the velocity will also rise as people purchase more goods and services.
The Price level and the Quantity produced on the right side of the equation would also have to rise to match the left side. So prices would rise, and so would output.
Find out more on the equation of exchange at brainly.com/question/10110078.
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<span>Basis of the given information for an economy in 2016.
Dollar value of resource extraction activity = $20 billion Dollar value of production activity = $50 billion
Dollar value of distribution activity = $80 billion Dollar value of final output = $110 billion
Gross output for this economy in 2016 equals $260 billion.</span>
Answer:
29,000 units
Explanation:
The computation of the number of units produced next year is shown below:
Number of units produced next year = Ending finished goods inventory units + budgeted sales units - beginning finished goods inventory units
where,
Ending finished goods inventory units is 6,000 units
Budgeted sales units is 26,000 units
And, the beginning finished goods inventory units is 3,000 units
So, the number of units produced is
= 6,000 units + 26,000 units - 3,000 units
= 29,000 units
We simply applied the above formula
Answer:
To hedge the preferred stock position, the manager should: Buy tyx calls
Explanation:
When market interest rate rise preferred stock drop. To hedge using interest rate index option, <em>the contract must offer an offsetting profit during a period of rising interest rates. Therefore buy TYX calls. </em>These will continue to give ever increasing profit as market interest rate continue to rise. And it will offset the ever increasing loss that would be incurred on the XYZ preferred stock position as the market interest rate continues rising.
The hedge is that Any loss on preferred stock position would be offset by corresponding gain on the long interest rate index call position.
