The real money demand is equal to $2,60,000
Money demand/ P = 1000+0.2Y -1000i
Money demand/200= 1000+0.2(2000)-1000(0.1)= 1000+400-100
=1300
Money demand /200 = 1300
Money demand = $1300*200
= $2,60,000
Money demand is the demand for real cash balances as people hold onto money to purchase goods and services. The higher the price level, the more money you need to buy a certain amount of goods.
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Answer:
Weidwans will do monthly contribution of 326.68 per month to be able to get 20,000 in four years and make the downpayment for a house.
Explanation:
We want to make monthly deposit to generate a future value of 20,000 in 4 years at 12% annual rate compounding monthly
FV $20,000.00
time 4 years x 12 month per year: 48
rate 12% per year / 12 month = 1% monthly = 0.01
C $ 326.68
Weidwans will do monthly contribution of 326.68 per month to be able to get 20,000 in four years and make the downpayment for a house.
Answer:
C) This will shift the aggregate demand curve to the left.
Explanation:
The demand curve is graphed on one axis being price level and the other axis being the total amount of goods and services purchased.
If consumer is pessimistic about their future incomes, they will want to save more and spend less, so they will demand less less goods and services at any price level than they used to before the recession (at that corresponding price level) ==> demand curve shift left.
Answer:
<u>Part(a) Differential analysis as at February 24</u>
Make (Alternative 1) :
Direct Materials $35.00
Direct labor $18.00
Variable Overheads $2.70
Fixed Overheads $0.00
Total Make Costs $55.70
Buy (Alternative 2) :
Total Purchase Cost $59.00
<u>(b) On the basis of the data presented, would it be advisable to make the carrying cases or continue buying them? </u>
It is clear that from comparison of the cost of Purchase and the Cost of Making the Carrying Cases, the Cost of Making the Carrying Cases is lower than the Cost of Purchasing the Cases by $3.30
It is thus advisable to make carrying cases instead of buying them
Explanation:
Total Make Costs;
The Factory fixed overheads are irrelevant to this decision hence they were ignored in the make cost calculations.
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