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Alla [95]
3 years ago
15

B. Federal Reserve Chair Jerome Powell has hinted that a long run inflation rate target of 2% is the guide he uses for monetary

policy in the long run Appealing to the Quantity Theory of Money, Rep. Doro Green advises Chair Powell to therefore set a money growth rate target of 2% to achieve this long run inflation goal. i.) If the Chair takes the Representative's advice, he_________achieve his long run inflation goal because__________ A. Will not; economic growth is positive in the long run. B. Will not; velocity growth is positive in the long run. C. will real economic growth is positive in the long run. D. Wil; velocity growth is positive in the long run.Why might we have reason to believe that Representative Green received the backing of those in the banking industry in the latest election? Explain with reference to your conclusion above about the results of Chair Powell's taking Representative Green's advice. ii) If Chair Powell takes Representative Green's advice, inflation in the long run will bethan expected, transferring wealth from :________.A. Lower; creditors to debtors B. Higher; debtors to creditors C. Higher; creditors to debtors D. Lower; debtors to creditors
Business
1 answer:
melamori03 [73]3 years ago
6 0

Answer:

will, real economic growth is positive in the long run.

Lower; creditors to debtors.

Explanation:

Theory of money is the economical view that the inflation is dependent on the money supply in the country. When the money supply is higher then inflation will be lowered and purchasing power of the consumer will be high. When inflation is set to a minimum possible rate then real economic growth will be positive in the long run and negative in the short run.

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Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be low
Alla [95]

Answer:

1) False

when the inflation is lower than expected, the real interest rate will be higher, since

real interest rate = Nominal interest rate - inflation.

2) Gains

In case of unexpected lower inflation the lender gains and the borrower loses.This is because real value of the loan increases due to lower inflation.

3) Loses

In case of unexpected lower inflation the lender gains and the borrower loses.This is because real value of the loan increases due to lower inflation.

6 0
3 years ago
Read 2 more answers
Masterson Company's budgeted production calls for 56,000 units in April and 52,000 units in May of a key raw material that costs
Aleks [24]

Answer:

Total cost= $101,380

Explanation:

Giving the following information:

Production for April= 56,000

Production for May= 52,000

The raw material costs $1.85 per unit.

Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 16,800 units.

We need to determine the budgeted material purchases for April:

Purchases= production for April + ending inventory - beginning inventory

purchases= 56,000 + (52,000*0.3) - 16,800= 54,800 units

Total cost= 54,800*1.85= $101,380

5 0
3 years ago
An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what yield must municipals
Yuki888 [10]

Answer:

0.063 or 6.3% (or more)

Explanation:

Given:

Combined Tax Bracket = 30% = 30/100 = 0.30

Yields of corporate Bonds = 9% = 9/100 = 0.09

Yield to Shift Investors to choose municipal bonds = ?

Calculation:

Yield from corporate bond = (After tax yield) x Yield rate of corporate Bonds

                                              = (0.70) x (0.09)

                                              = 0.063 or 6.3%

Working note:

After tax yield = (1 - tax rate )

After tax yield = (1 - 0.30 )

After tax yield = (0.70)

so, they must give 6.3% yield

7 0
3 years ago
Tin-Tin Waste Management, Inc., is growing rapidly. Dividends are expected to grow at rates of 30 percent, 35 percent, 25 percen
scoundrel [369]

Answer:

The dividend for the current year (D0) is $2.15.

Explanation:

This can be calculated as follows:

Current dividend = D0

Next dividend = (1 + relevant growth rate) * Current dividend ........... (1)

Based on equation (1), we have:

D1 = (1 + 0.30) * D0 = 1.30D0

D2 = (1 + 0.35) * D1 = 1.35 * 1.30D0 = (1.35 * 1.30)D0 = 1.755D0

D3 = (1 + 0.25) * D2 = 1.25 * 1.755D0 = (1.25 * 1.755)D0 = 2.19375D0

D4 = (1 + 0.18) * D3 = 1.18 * 2.19375D0 = (1.18 * 2.19375)D0 = 2.588625D0

D5 = (1 + 0.07) * D4 = 1.07 * 2.588625D0 = (1.07 * 2.588625)D0 = 2.76982875D0

Using Gordon Growth stable formula, we have price in year 4 (P4) as follows:

P4 = D5/(required rate of return - Perpetual dividend growth rate) ........ (2)

Substituting all the relevant values to equation (2), we have:

P4 = 2.76982875D0/(0.16 - 0.07)

P4 =2.76982875D0/0.09

P4 = 30.775875D0

Since the market price is the sum of all the present values of dividends from year 1 to 4 and P4, we have:

$47.85 = (D1 / (1 + required rate of return)^1) + (D2 / (1 + required rate of return)^2) + (D3 / (1 + required rate of return)^3) + (D4 / (1 + required rate of return)^4) + (P4 / (1 + required rate of return)^4) ...........(3)

Substituting all the relevant values to equation (3), we have:

$47.85 = (1.30D0 / 1.16^1) + (1.755D0 / 1.16^2) + (2.19375D0 / 1.16^3) + (2.588625D0 / 1.16^4) + (30.775875D0 / 1.16^4)

$47.85 = [(1.3 / 1.16^1) + (1.755 / 1.16^2) + (2.19375 / 1.16^3) + (2.588625 / 1.16^4) + (30.775875 / 1.16^4)]D0

$47.85 = 22.2572996535323D0

D0 = $47.85 / 22.2572996535323

D0 = $2.15

Therefore, the dividend for the current year (D0) is $2.15.

5 0
3 years ago
Rachel borrows money from her bank to buy a car. What type of bank service
Naya [18.7K]

Answer:

D

Explanation:

A loan refers to money borrowed by people or organisations from the bank

8 0
2 years ago
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