Answer:
The most important decision a financial manager can make is the allocation of funds to various investments
The total cost for this certain activity level can be calculated by substituting 4000 to the x of the equation given above,
y = 7000 + 1.8(4000)
y = 14200
Thus, the total cost of the activity level is $14,200.
Answer:
Detailed solution is given in the tabular form below:
<h2>Joshua would lose and Sue would benefit from unanticipated inflation.</h2>
Explanation:
- Both Joshua and Sue are associated with fixed pension and fixed interest respectively.
- Now the value of money goes down due to inflation
- So to live as usual, Joshua need to spend some extra money. But considering the fixed income, it's a lose to Joshua
- Whereas Sue is associated with fixed interest of mortgage. She is benefited because, though the inflation has changed the value of all other products, but the fixed interest rate does not change.
- "Fixed-rate mortgage holders are inflation winners", says "Thoma, professor of economics at the University of Oregon"
Answer:
When an economy produces at full employment, but consumers, government, there is a recessionary gap - Option B.
Explanation:
According to the Keynesian perspective, firms produce output only if they expect it to sell.
While the availability of the factors of production determines a nation’s potential gross domestic product (GDP), the amount of goods and services actually being sold, known as real GDP depends on how much demand exists across the economy.
Keynes termed a fall in the aggregate demand as a recessionary gap.
A recessionary gap refers to an economy operating at a level below its full-employment equilibrium. Under this condition, the level of real gross domestic product (GDP) is lower than the level of full employment, which puts downward pressure on prices in the long run.
Thus, when an economy produces at full employment, but consumers, government, there is a recessionary gap - Option B.
