Answer: Option (A) is correct.
Explanation:
Correct Option: Other assets can also be used to make transactions to buy goods and services.
M1 = Currency with public + check-able/Demand deposits + other deposits with RBI
It includes more than just currency with public because there are some other assets as well which are highly liquefied and helps people in buying goods and services.
Check able deposits is one of the component of M1, other than currency with public. People can withdraw these deposits at any point of time which people generally used make transactions for buying goods and services.
Answer:
Return on stock will be 12.65%
So option (c) will be the correct option
Explanation:
We have given expected return in booming economy = 22 %
Expected return in normal economy = 11 %
Expected return in recessionary economy = 4%
Probability of boom = 24% = 0.24
probability of normal economy = 67%=0.67
Probability of recession = 9 % =0.09
So Expected return on stock = (Return in boom economy x Probability of boom economy) + (Return in normal economy x Probability of normal economy) +(Return in recessionary economy x Probability of recessionary economy)
Expected return on stock = (0.22 x 0.24) + (0.11 x 0.67) + (-0.04 x 0.09)
= 0.0528 + 0.0737 = 0.1265 = 12.6%
So option (c) will be the correct option
Answer:
Explanation:
1. What is the total payments (income) to factors of Better-bald Inc.?
Payments to factors of Better-bald Inc. = Rent+Wages+Interest payment+Profits = 450+300+100+750 = $1600
2. What is the total payments (income) to factors of Sweeter Sweaters Inc.?
Payments to factors of Sweeter Sweater Inc = Rent+Wages+Interest payment+Profits = 500+550+50+800 = $1900
3. If we use income method to calculate GDP, we need to sum the payment to factor of production by the entreprises in the economy who employ the factor of production.
The given economy has three enterprises: Better-bald, Sweater Sweaters, Sheepnip. Payment to factor of production are already calculated for 2 of them. Therefore, we there is a need to calculate for the Sheeping Co.
Payment to factors by Sheeping Co = 700 + 400 + 1000 + 100 = $2200
So GDP = $1600 + $1900 + $2200 = $5700
The text states, “inflation is a type of tax.” This tax refers to the lower purchasing power of money when inflation occurs.
Answer:
C. the lower purchasing power of money