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Lesechka [4]
3 years ago
13

Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of ch

ips, and one comic book. In year one, the basket costs $9.00. In year two, the price of the same basket is $8.00. From year one to year two, there isdeflation at an annual rate of 1.25%. In year one, $72.00 will buy____baskets, and in year two, $72.00 will buy____baskets. This example illustrates that, as the price level falls, the value of money____ .
Business
1 answer:
Virty [35]3 years ago
8 0

Answer:

Year 1, Year 2 purchasing power = 8 , 9 (respectively). As price level fall, value of money<u> Increases </u>

Explanation:

Year one purchasing power = Money ($) / Price per basket = 72 / 9 = 8

Year two purchasing power = Money ($) / Price per basket = 72 / 8 = 9

This implies that, as price level falls (from 9 to 8 here) ,the value of money ie purchasing power increases (from 8 to 9)

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In general, as price increases, demand decrease? True or False.
enyata [817]

False, the reason the prices raise is because of high demand. If people want a product they will buy it at a higher price.

8 0
3 years ago
Read 2 more answers
Write 2-3 short paragraphs about the marketing message you will use and why you chose this message. Why does it appeal to your t
pochemuha

Explanation:

A marketing message that is highly regarded in today's world, is one that manages to demonstrate business values in the form of procedures, products and services that contain added value in addition to the purely profitable.

As an example that would write a marketing message about a new clothing brand, it would include information that demonstrates that the manufacturing process and raw materials used in making the clothing is sustainable and has a low impact on the environment.

This is a strategy that increases the perception of stakeholders in relation to products, a brand that actually has parameters of sustainability in its processes can demonstrate them through its marketing messages to create value and greater reliability in the brand, being a great differential for consumers.

3 0
3 years ago
Item 3Item 3 Cutter Enterprises purchased equipment for $87,000 on January 1, 2018. The equipment is expected to have a five-yea
Rus_ich [418]

Answer:

$27,400 and $59,600

Explanation:

The computation of the depreciation expense and the book value using the sum of-the-years'-digits method is shown below:

Depreciation expense is

= (Purchase cost - residual value) × useful life ÷ sum of years

= ($87,000 - $4,800) × 5 years ÷ (5 + 4 + 3 + 2 + 1)

= $27,400

And, the book value is

= Purchase cost - depreciation expense

= $87,000 - $27,400

= $59,600

8 0
3 years ago
Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2.
Archy [21]

Answer:

b) $10 trillion

Explanation:

Price level = NGDP / RGDP = 2

NGDP / RGDP = 2

As per the quantity theory of money,

MV = PQ

M.(2) = 20

M = 10 trillion

Therefore, The  money supply is $10 trillion.

4 0
2 years ago
Rick and Joe get together and start a mortgage brokerage business. They each contribute $25,000 of capital to the business. Afte
bezimeni [28]

Answer:

a.common stock.

Explanation:

The additional $10,000 of owners equity after listing on the stock market will be named as common stock. After listing company issues shares for capital investment in it. Common stock is the appropriate term used for every addition in the owners equity. So the correct option is a.common stock.

7 0
3 years ago
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