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Stells [14]
4 years ago
14

According to liquidity preference theory investment spending would rise if the price level

Business
1 answer:
ANTONII [103]4 years ago
4 0

Answer:

A.rose making the interest rate fall

Explanation:

According to the liquidity preference theory developed by John Keynes, if the money supply rises, price level also rises, interest rate falls. If interest rate falls, the price of bond rises which would increase capital gains. People would prefer to hold bonds instead of money, therefore, investment spending would rise.

The liquidity preference theory states that we hold money for transactive, speculative and precautionary motives.

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Exhibit 9-1 Refer to Exhibit 9-1. If the economy is self-regulating, the price level is:_________.
victus00 [196]

Answer: b) lower in long-run equilibrium than in short-run equilibrium.

Explanation:

A self regulating economy will try to move to the long run Equilibrium.

From the graph attached you will notice that the Price Level at the point where the Long Run Curve intersects with the Aggregate Demand curve is lower than the point where the Short Run Supply curve intersects with the same Aggregate Supply.

This means that Prices in the long term at equilibrium will be less than prices in the short term at Equilibrium should the Economy be a self regulating type that will move towards a long term Equilibrium.

5 0
4 years ago
A group that sponsors bike helmet poster contests for children to promote bicycle safety is providing which marketing offering
KengaRu [80]
Ideas is your answer
4 0
2 years ago
Bert's Car Sales is a new firm that is still in a period of rapid growth. The company plans on retaining all of its earnings for
DaniilM [7]

Answer:

The correct choice is C)

The most logical thing to do would be to calculate the value of the stock in 5 years time.

Explanation:

This speaks to ones understanding of dividend growth stock valuation models. These tools are used to establish a fair value for a stock by discounting the present value of its future dividends. A commonly used model is the constant growth dividend discount model.

The formula for the DDM, which assumes constant growth in dividends, is provided below.

P0 = D1/(r-g)

Where,

P0 = intrinsic value of stock

D1 = dividend payment one year from today

r = discount rate

g = growth rate

Identifying the correct answer entails establishing a timeline of the expected cash flows. We are given the following information:

t0 = $0

t1 = $0

t2 = $0

t3 = $0

t4 = $0

t5 = $0.20

t6 = $0.20 * 1.035

Given a rate of return, we could use the constant growth dividend discount model to establish the fair value of the firm at t5 (five years from today). Incidentally, to determine today's value, we'd discount it back another five years.

Based on the information above,  we are able to prove that the answer is '5'.

Cheers!

3 0
3 years ago
Why might the unemployment rate underestimate the underutilization of labor​ resources? The unemployment rate might underestimat
DaniilM [7]

Answer:

marginally attached staff and​ part-time staff that hope on getting​ full-time jobs

6 0
3 years ago
Market involves aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a
True [87]

Market<u> segmentation</u> involves aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action.

In the field of business, market segmentation can be described as a business strategy where the business owner focuses on making those products that target a particular audience.

Market segmentation involves understanding of the needs and products that will be required by a focused group of people. After evaluating their needs, the products are made in accordance to fit their needs.

By market segmentation, you tend to divide your focus to a certain group of customers or prospective buyers and design your product in accordance with their needs.

To learn more about market segmentation, click here:

brainly.com/question/5545577

#SPJ4

8 0
1 year ago
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