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Amanda [17]
2 years ago
13

What happens over time to the real cost of purchasing a home, if the mortgage payments are fixed in nominal terms and inflation

is in existence? (A) The real cost is constant. (B) The real cost is increasing. (C) The real cost is decreasing. (D) The price index must be known to answer this question.
Business
1 answer:
Sauron [17]2 years ago
4 0

Answer:

(C) The real cost is decreasing.

Explanation:

1 + real rate = (1 + nominal rate)/(1+ inflation)

So, with existence of inflation, real rate cost will be decreasing after each period.  After each period, it will be found out by dividing with inflation rate in the way shown above and added multiplicatively.

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Classify each of the statements as true or false.
Tasya [4]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

7 0
3 years ago
When p = $5, the quantity demanded of a good is 30 units, and the quantity supplied of the good is 50 units. For every $1 decrea
Neporo4naja [7]

Answer: Equilibrium price is $3 and equilibrium quantity is 40 units.

Explanation:

Demand equation is given by,

Qd= a-bP When P=$5, Qd=30 30 = a – 5b Change in Quantity demanded =  Change in a – (b Change in P) 5 = 0 – b(-1) b=5 So, a = 55

Therefore the demand equation is given by, Qd= 55 – 5P

Supply equation is given by

Qs= c + dP When P=$5, Qs = 50 50 = c + 5d Change in Quantity supplied = Change in c + d(Change in P) -5 = 0 + d(-1) d=5 So, c=25

Therefore, the supply equation is given by,  

Qs= 25 + 5P

Equilibrium is given by

Qd=Qs 55 – 5P= 25 + 5P 30=10P P=$3 And  Equilibrium quantity is, Q= 55 – 5(3) = 55 – 15 = 40 units.

8 0
3 years ago
Georgina decides to take a dozen cupcakes to school to sell so she can raise money for her school trip to New Orleans. She price
Naily [24]

Answer:

Shortage

Explanation:

I got it correct because I watched the given recording.

8 0
2 years ago
Sparkle Metallurgy, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (
user100 [1]

Answer:

B.40,000 square feet

Explanation:

Calculation to correctly denotes the number of square feet and employees over which the Building Maintenance cost and Human Resources cost would be allocated

Employees Human Resources 4,000

Machining 15,000

Assembly 21,000

Number of square feet 40,000

(4,000+15,000+21,000)

Therefore the number of square feet and employees over which the Building Maintenance cost and Human Resources cost would be allocated is 40,000

3 0
2 years ago
Dabney Electronics currently has no debt. Its operating income is $20 million and its tax rate is 40%. It pays out all of its ne
ValentinkaMS [17]

Answer:

$29 per stock

Explanation:

WACC=PBIT*(1-tax)/Market value of firm

10%=$20,000,000*(1-40%)/Market Value of the firm

Market Value of the firm=$20,000,000*60%/10%=$120,000,000

Stock price for all shares=$120,000,000*60%=$72,000,000

Stock price per share=$72,000,000/2,500,000=$29 per share

6 0
3 years ago
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