How can a country experience economic growth?

government regulation is the most important factor. B) commodity money, because it is valued more highly, tends to drive out pap

Alex73 [517]

Answer:

The question is not complete.

Here is the complete question:

In explaining the evolution of money, the text claims that

A) government regulation is the most important factor.

B) commodity money, because it is valued more highly, tends to drive out paper money.

C) new forms of money evolve to lower transaction costs.

D) all of the above are true.

Here is the answer:

C.new forms of money evolve to lower transaction costs.

Explanation:

Before the advert of money, transactions between individuals were based on exchange goods for goods, a system called trade by barter. The system of trade by barter permits individual who has a particular good but desire another to exchange the goods he has with another person who has the goods he desires.

However, this system has a major flaw: transaction costs were higher.

The system of trade by barter only works if the two people involved has complimentary possession of goods that the other wants and be able to locate each other. With this high transaction costs, exchange of goods was difficult to carry out.

On this background, money evolve to lower this transaction costs and make exchange of goods possible without the need to have what another person wants and the trouble of finding where they are.

4 0

3 years ago

Read 2 more answers

In order to be effective control must be

Vanyuwa [196]

...evaluated through organising questionnaires in the organization.

3 0

3 years ago

We are evaluating a project that costs $644,000, has an eight-year life, and has no salvage value. Assume that depreciation is s

AleksandrR [38]

Solution :

a).

Particulars Details

Selling price per unit 37

Less : variable cost per unit -21

Margin per unit 16

No. of units sold per unit 70,000

Gross margin 11,20,000

Less : fixed cost - 7,25,000

Profit before depreciation and tax 3,95,000

Less : depreciation -80,500

Profit before tax 3,14,500

Less : Tax -1,10,075

Net profit per year 2,04,425

Project Cost 6,44,000

Accounting breakeven point in years 3.15

b).

Calculating the base Cash - Cash flow and NPV

Particulars Amount

Net profit per year 2,04,425

Add : depreciation 80,500

Base Cash cashflow 2,84,925

Required rate of return 15%

Present value of base cash cash flow 12,78,550

received in 8 years.

Project cost -6,44,000

NPV 6,34,550

The present value of base cash cash flow received in 8 years is calculated as Present value of annuity received at the end of each year $ 2,84,925 at the rate of interest 15% for a period of 8 years.

The sensitivity of the NPV to 500 units decrease in projected sales :

Particulars Details

Selling price per unit 37

Less : variable cost per unit -21

Margin per unit 16

Number of units sold per year 69,500

Gross margin 11,12,000

Less : fixed cost -7,25,000

Profit before depreciation and tax 3,87,000

Less : depreciation -80,500

Profit before tax 3,06,500

Less : tax -1,07,275

Net profit per year 1,99,225

Add : depreciation 80,500

Base Cash cashflow 2,79,725

Required rate of return 15%

Present value of base cash cash flow 12,55,216

received in 8 years.

Project cost -6,44,000

NPV 6,11,216

Original NPV 6,34,550

Sensitive NPV -23,334

c).

Particulars Details

Selling price per unit 37

Less : variable cost per unit -20

Margin per unit 17

No. of units sold per year 70,000

Gross Margin 11,90,000

Less : fixed cost -7,25,000

Profit before depreciation and tax 4,65,000

Less : Depreciation -80,500

Profit before tax 3,84,500

Less : tax -1,34,575

Net profit per year 2,49925

Add : depreciation 80,500

Operating cash flow 3,30,425

Original operating cashflow 2,84,925

Sensitivity of OCF 45,500

7 0

2 years ago

Using the following accounts and balances, prepare the "Stockholders’ Equity" section of the balance sheet using 20,000 shares o

olga55 [171]

Answer and Explanation:

The preparation of the stockholder equity of the balance sheet is presented below:

Shares issued $48,000,000

Add: Paid-In Capital in Excess of Par $6,400,000

Add: Paid in Capital from Sale of Treasury Stock $4,500,000

Add: Retained Earnings $63,680,000

Less: Treasury Stock, 40,000 shares -$5,200,000

Total stockholders' equity $117,380,000

6 0

3 years ago

Which of the following is true when an economy produces at full employment, but consumers, government, businesses, and the forei

Art [367]

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.

6 0

3 years ago