All categories

2 years ago

Answer the following questions about the (real) inflation tax, assuming that the price level starts at 100.

Business

1 answer:

Rus_ich [418]2 years ago

7 0

Answer:

a) $900 after 1 year

b) $810 after 2 years

Explanation:

This deals with the time value of money concept. This states that money is worth more today than the same amount is worth sometime in the future. The real purchasing power is the nominal purchasing power discounted back as per the prevailing inflation rate.

For a)

$1000 after one year will be worth 1000 * 0.9 = $900 or a reduction of $100 as 1000 today is worth only 900 after 1 year.

For b)

The inflation rate discounts real purchasing power year over year so after 2 years the real purchasing power will be as follows,

Real purchasing power = 900 * 0.90 = $810 which is discounted by 10% inflation for 2 years.

Hope that helps.

You might be interested in

Which of the following institutions makes up the largest part of the Federal Reserve System organization

vlada-n [284]

The Correct answer choice for question 1 is : <u>Federal Reserve Banks</u>

<h3>What is Federal Reserve Banks?</h3>

While the Board of Governors is a sovereign government agency, the Federal Reserve Banks are set up like private companies. Member banks hold stock in the Federal Reserve Banks and earn profits. The Federal Reserve's interest is determined principally from the interest on U.S. government securities that it has received through open market operations.

AND

The Correct answer choice for question 2 is : <u>Buy government securities</u>

<h3>What is Recession?</h3>

A recession is a business cycle recession which occurs in a general slowdown in financial activity. Macroeconomic indicators such as GDP, finance spending, capacity utilization, household income, business profits, and inflation fall, while failures and the unemployment rate rise.

Therefore, we can conclude that the correct option of 1 is (B) and 2 is (A).

Your question is incomplete, but most probably your full question was:

1. Which of the following institutions makes up the largest part of the Federal Reserve System organization?

A. Board of Governors

B. Federal Free Market Committee

C. Federal Reserve Banks

D. Member banks and other depository institutions

2. If the United States falls into a recession, which action would the Federal Reserve take to encourage employment?

A. Buy government securities

B. Increase reserve requirements

C. Raise federal funds and prime rates

D. Sell government securities

Learn more about Federal Reserve System on:

brainly.com/question/999538

#SPJ4

7 0

2 years ago

What does the communication technique "slow down and be patient" mean

vladimir2022 [97]

Answer:

Slow your speech so the person has time to think about each word you say.

Explanation:

These are the options for the question

Avoid looking at your watch when giving care. Slow your speech so the person has time to think about each word you say. Slow your body movements and wait as long as it takes for the person with dementia to respond.

Communication technique are ways of passing information from one person to another, the communication technique "slow down and be patient" symbolized that when you are making a speech, you need to Slow your speech so the person has time to think about each word you say, and a he/she will be able to give the necessary response or act accordingly to the speech.

7 0

3 years ago

a secured party who has control will prevail over a secured party who has only filed for these types of collateral:

marshall27 [118]

Deposit accounts, Investment Property, and Letter-of-credit Rights. Thus option (A) is correct

<h3>What is the investment?</h3>

Investment is the ceremonial of money to purchase an asset to attain an increase in value over a time period of time. Investment requires a sacrifice of some present quality, such as time, medium of exchange, or effort. In finance, the purpose of investing is to generate a return from the invested asset.

Whether or not there is a current obligation to be secured, a person who has the benefit of the security interest generated by or provided for under a security arrangement is known as a secured party under UCC law. when the secured party is in possession, a duty of care.] A secured party must take reasonable care to keep the collateral it has in its possession safe unless subsection (d) provides otherwise.

Therefore, Thus option(A) is correct

Learn more about investments here:

brainly.com/question/15353704

#SPJ1

5 0

1 year ago

Chet Bowes owns his own landscaping business, including all the land on which the company grows its plants, and all the equipmen

aliya0001 [1]

Answer:

Inheritance

Explanation:

The above question highlights example of inheritance. Whenever the ownership of business is transferred from one generation to another, it can be taken as an example of inheritance in a capitalist system.

The same has happened in the above question as well. Chet Bowes who owned his own lanscapped business has now transferred the ownership to his son Josh who has recently taken charge, now it is very much clear from the question neither Josh built the company on his own now was hired on the basis of his capabilities, the transfer happened on the basis of his relationship with the owner of the company. The question shows an example of inheritance.

5 0

2 years ago

A taxpayer must receive voting common stock to be eligible for deferral in a Section 351 exchange. True False

hodyreva [135]

Answer:

True

Explanation:

Section 351 (a) establishes that no gain or loss should be recognized when property is transferred to a corporation:

in exchange of stock in that corporation (might receive common stock or share class stocks)
as soon as the exchange is complete, the new stockholder must be in control of the corporation.

Not all common stocks have the same voting rights, that is why they are divided into share classes which assign separate voting rights or powers. Section 351 does not include preferred stocks.

3 0

3 years ago