Answer:
e. increase as the probability of a boom economy increases.
Explanation:
The most economic growth occurs when the economy is in boom state. This results in the highest rate of return on investments compared to all other states such as normal, recession. In this case, if the probability of boom economy increases, stock S will have an overall increase in expected return; it means that there is higher chance of earning 12% return which is the highest among those in other economy states. This makes choice E correct.
Answer:
Higher unemployment, lower wage share of output, and higher Gini coefficient in the long run.
Explanation:
Since less labor will be used, total unemployment will increase. Besides less labor being used, more capital will be used, so the share of labor in total output will decrease. Labor efficiency increases, since you need less labor to produce the same or even a larger amount of output.
New technologies tend to increase the wages of high skilled labor and management. Since the Gini coefficient measures income inequality, then higher wages for a few will increase inequality.
This is an example of what is happening in the US, where highly trained labor is getting paid better every time while unskilled labor is getting paid the same as many years ago or their wage has even decreased with time. This shows how important a college education is, and the difference will only keep increasing.
Answer: Volkswagen invested in Russia because Russia’s economy was growing rapidly and living standards were rising while the level of car ownership was still low. This made Volkswagen believe that the demand for cars would grow quickly.
FDI was preferable because Volkswagen’s competitors were also investing in production facilities in Russia, so they felt that they needed to invest directly to be on the same levels as their rivals.
Answer:
Assets include the value of securities and funds held in checking or savings accounts, retirement account balances, trading accounts, and real estate. Liabilities include any debts the individual may have including personal loans, credit cards, student loans, unpaid taxes, and mortgages.
Explanation:
Answer:
Interest Expense $39,600
Cash Flow from Operating Activities $39,600
Explanation:
Payment of Interest Expense is the cash expense paid during the year which is deducted from the operating profit in the calculation of net income which is used to determine the cash flow from operating activities.
Interest on the Bond = $660,000 x 6% = $39,600
At the time of payment Journal Entry will be as follow
Dr. Interest Expense $39,600
Cr. Cash $39,600
As the cash is paid against the operating activities.
