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Neko [114]
3 years ago
9

_______ occurs when the inflation rate is less than zero percent.

Business
2 answers:
Bess [88]3 years ago
7 0

Answer: We always hear that inflation is bad for an economy, it is bad for people in general and imposes additional burden on the poor. Consequently we start believing that a negative rate of inflation, or deflation, is a good thing. It is not.

Explanation:

Here's why:

   Deflation is a disincentive to producers. Production process usually takes time. Some times there can be huge time difference between the time of placing order for raw material and selling the final product. In a deflationary economy, the prices of goods and services will keep falling during this time. Thus it will be very difficult for producers to make profits and their sale price may not be enough to cover the cost of raw materials.

   Deflation is disincentive to consumers. Think about it, if you have to buy a car, but you know that the car you want to buy will be available at a lower price some time in the future, would you still buy it? Thus in a deflationary economy, consumers tend to postpone their discretionary purchases (they have to buy essentials). This leads to pile up of inventory for producers creating further disincentive to producers.

The above two have a cyclical effect where the economy goes into a downward spiral. There is no production, hence no growth. Soon the economic machinery of the country could come to standstill.

This is the reason why central banks across the world target an inflation rate of around 2%. This is a manageable rate where the price increase are not high enough to hurt the consumers too much while the rate not being low enough to risk going into deflation.

It should be noted however that these consequences follow from a prolonged period of deflation. A month or two of deflation which quickly bounces back to inflation does not lead to such disastrous effects. Such deflation may be good to ease the pressure on the consumers. But central banks are wary, lest it get out of hand.

nikitadnepr [17]3 years ago
3 0

deflation occurs when inflation rate is less than zero percent

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Answer: C. $48,000 capital gain

Explanation:

To calculate the Gain or loss on the sale of Jackson's interest we will subtract his adjusted basis from the sale of his entire interest in the following manner,

Gain(loss) on sale of interest = Amount realised - Adjusted basis in partnership

= 112,000 - 64,000

= 48,000

$48,000 will be his Gain on the sale of his interest. It will also be considered CAPITAL as he does not have Hot assets like inventory just equity.

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3 years ago
Which type of adjusting entry is used to record a payment a company has not yet made for a service it received?
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Answer:

C. Accrued expense

Explanation:

Because the expense has already been incurred, but not yet paid, it is an accrued expense.

5 0
3 years ago
Over the next three years, Distant Groves wl pay annual dividends of $.65, S.70, and $.75 a share, respectively. After that, div
hichkok12 [17]

Answer:

c) $5.68

Explanation:

The worth of this stock today is the present value of the future dividends which is computed by discounting future dividends as well as the terminal value using the required rate of return of 14.5% as the appropriate discount rate as shown thus:

Year 1 dividend=$.65

Year 2 dividend=$0.70

Year 3 dividend=$0.75

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Share price=$.65/(1+14.5%)^1+$.70/(1+14.5%)^2+$.75/(1+14.5%)^3+$6.12/(1+14.5%)^3

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5 0
2 years ago
Suppose that a manager is interested in estimating the average amount of money customers spend in her store. After sampling 36 t
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Answer:

The store manager is 95% confident that the average amount spent by all customers is between $ 31.84 and $ 38.66.

Explanation:

In statistics, a confidence interval is the probability that the parameter of a population lies between two set of values when a random sample of the population is drawn for a specific percentage of times. This means that the confidence interval is formed about the whole population not the sample from which it is calculated.

The probabilities of a confidence interval can take any number, but 95% and 99% confidence level that are usually used.

It should be noted that, for example, 95% confidence level implies that there is a 95% chance that the true mean of the population lies within the calculated confidence interval.

Therefore, the statement which gives a valid interpretation of the interval in the question is the first one which states that "the store manager is 95% confident that the average amount spent by all customers is between $ 31.84 and $ 38.66."

I wish you the best.

4 0
3 years ago
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Answer:

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