All categories

3 years ago

Cost-push inflation is a situation in which the:

Business

1 answer:

Irina18 [472]3 years ago

6 0

Answer: b. short-run aggregate supply curve shifts leftward.

Explanation:

Cost Push Inflation occurs when the Aggregate Supply of Goods and Services DECREASES because of an increase in Production costs.

Companies can no longer keep producing at the previous levels they could have because the price of inputs have gone up and they are already at full capacity.

To maintain profit margins they will reduce production to cut costs.

This reduces the supply in the Market and forces the Supply curve left which leads to a higher equilibrium price all else being equal.

In the graph I attached below, you can see how the Short Run aggregate supply curve shifted to the left and took prices up as Demand remained constant.

If you need any clarification do react or comment.

You might be interested in

Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000. During 2019 s

Nastasia [14]

Answer:

With respect to Adjusted Gross Income we can not deduct anything. She will claim $10,000 in itemized deductions, subject to 2% deductions.

Explanation:

8 0

3 years ago

An all-equity firm is considering the following projects:

lakkis [162]

Answer:

A. Compared with the firm's 12 percent cost of capital, Project W has a_______expected return.

a. lower

1. Project X has a______expected return.

b. lower

2. Project Y has a_______expected return

b. higher

3. Project Z has a______expected return.

a. higher

B. Project W should be_______.

b. rejected

1. Project X should be______.

b. rejected

2. Project Y should be_______.

a. accepted

3. Project Z should be_______.

a. accepted

c. If the firm's overall cost of capital were used as a hurdle rate, Project W would be_______.

c. correctly rejected

1. Project X would be______.

c. correctly rejected

2. Project Y would be_______.

b. correctly accepted

3. Project Z would be________.

b. correctly rejected

Explanation:

Project Beta IRR <u> expected return</u>

W .62 9.2% = 5% + (0.62 x 7%) = 9.34%

X .77 10.3 % = 5% + (0.77 x 7%) = 10.39%

Y 1.27 14.1 % = 5% + (1.27 x 7%) = 13.89%

Z 1.42 17.0% = 5% + (1.42 x 7%) = 14.94%

8 0

3 years ago

Jeff deposits $3,000 into an account which pays 5 percent interest, compounded annually. At the same time, Kurt deposits $3,000

VashaNatasha [74]

Answer:

Kurt will have a smaller account value than Jeff will

Explanation:

The formula for calculating future value = A (B / r)

B = [(1 + r)^n] - 1

Jeff : $3000 x [(1.05^3 - 1 ) / 0.05] = $9457.50

Kurt :$3000 x [(1.03^3 - 1 ) / 0.03] = $9272.70

Jeff would have a higher account value than Kurt

8 0

3 years ago

7. Farmer sells flour to a baker for RM2. The baker uses the flour to make bread, which is sold for RM3. What is the total contr

erica [24]

Answer: RM3

Explanation:

Gross domestic product has to do with the monetary value of the goods that are produced in a particular economy. In this case, the total contribution will be RM3 since it's the final amount that the bread is sold.

It should be noted that RM2 in this case is the intermediate good and should therefore bit be included so that there won't be an overstatement of the GDP and to prevent double counting.

8 0

3 years ago

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

Vlad [161]

Answer:

Budget deficit / Fiscal deficit

Explanation:

At the start of the year, every government prepares a budget e.g. all sources of revenue (direct taxes, indirect taxes, aids etc) and projected expenses are also mentioned (development of society, defense etc.).

When a government spends more than its revenue from taxes so it means that government is running a budget deficit or a fiscal deficit which are covered through fiscal measures by government e.g. increasing taxes or reducing public spending.

8 0

3 years ago