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dedylja [7]
3 years ago
6

Instead of investing a lump of sum of $25000,Brittany Royer decides to svae the money in a vault for 2years. Assuming the inflat

ion being 2.5%per year,how much will her purchasing power decline in 2years
Business
1 answer:
Ipatiy [6.2K]3 years ago
7 0

Answer:

$1265.63

Explanation:

Inflation is a persistent rise in the general price levels

Types of inflation

1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise

2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect  

Loss in purchasing value = future value of the amount saved - amount saved

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

$25000 (1.025)² = $26.265.625

Amount lost = $26.265.625 - $25,000 = $1265.63

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Suppose the following transactions occur during the current year:
Genrish500 [490]

Answer:These transactions combines will increase the Gross Domestic Products by +2500

Explanation:

Gross domestic product is the Value of all goods and service produced within the boarders of the country over a period of time. Gross domestic product is measured in monetary terms. Gross domestic product can also be calculated as a total of all expenditures on goods and services in the economy.

we will now sow how these Transactions affect the gross domestic product

1. 50 cases of beer from a dutch distributor at $40 per case

When Dmitri (assuming he is in the United States) Purchases a 50 cases of beer abroad, Imports increase by $2000 ($40 x 50 cases)

Imports have a negative impact on the Gross domestic product, Therefore the Gross domestic product will decrease by $2000

-$2000 imports = -2000 Gross Domestic Product. ceteris pa

2.US Company sells 200 Transistors to a Spanish company at $15 per case

Exports increase Gross domestic product. When a US Company sells 200 transistors to a Spanish Company at a price of $15 per transistor, Exports will increase by $3000. When export increase Gross domestic product will also increase by -$3000 ceteris par

+$3000 export = + 3000 Gross Domestic Product.

3. Jake US Citizen pays $1500 for a laptop he orders from microell (a US company)

This transaction will increase Consumer's domestic consumption which is represent by a Variable denoted by C in the Consumption equation. When Jake pays $1500, Consumption increases by $1500 which also increases Gross domestic Product by $1500 ceteris pa

+$1500 Consumption = + $1500 Gross domestic product

Combined effect of these Transactions

Consumption + Investment + government spending + (export - import)= GDP

+$1500 + 0 + 0 + 0 + ($3000 - $2000) = + $2500        

These transactions combines will increase the Gross Domestic Products by +2500

8 0
3 years ago
Read 2 more answers
Management of a close corporation often resembles that of a______, but a corporation must meet the statutory requirements to rem
Reika [66]

Answer:

Explanation:

The statement in the question is not complete and should be the following with each of the answers provided being part of the statement like so,

Management of a close corporation often resembles that of a Partnership , but a corporation must meet the statutory requirements to remain a corporation. Often, shareholders in a close corporation restrict the transferability of shares. If a majority shareholder misappropriates company funds, the normal remedy for the other shareholders is to have their shares appraised to determine value and then receive that value.

8 0
3 years ago
A tenant occupying 20,000 square feet in your building has two years remaining on their lease. You have a good relationship with
user100 [1]

Answer: $315000

Explanation:

From the information given in the question, the gross rental income that one will expect to receive for this space in the year after the lease expires goes thus:

= [(75% x 15) + (25% x 18)] x 20,000

= [(0.75 × 15) + (0.25 × 18)] × 20000

= (11.25 + 4.5) × 20000

= 15.75 × 20000

= 315,000

Therefore, the gross rental income is $315000

4 0
3 years ago
Which of the following statements accurately describes the relationship between earnings and dividends when all other factors ar
poizon [28]

Answer:

The correct answer is: Retaining a higher percentage of earnings will result in a lower growth rate.; Long-run earnings growth will decrease when firms retain earnings and reinvest them in the business.

Explanation:

In the first statement, a deliberate action is shown that consists of the capitalization of the entity, that is, the equity is accumulated in order to distribute it among the shareholders and leave a part to support the company. In the second statement, it means that the positive results of the company will not be seen in the long term due to management's dispositions to execute a policy to capitalize the entity and improve its cash flow by reinvesting the perceived resources.

7 0
3 years ago
Tony's Pizza's production function is shown in the table below.
Nastasia [14]

A technological efficiency is achieved, when a given output achieves the maximum possible output.

<h3>Why the pizzeria is technologically efficient?</h3>

a) Suppose Tony operates Plant 2. He hires 2 workers and produces 20 pizzas a day. Is the pizzeria technologically efficient? Why or why not?

The firm is not technologically efficient. The production function shows that with 2 ovens and 2 workers it is possible to produce 22 pizzas a day.

b) Suppose Tony operates Plant 1. He hires 2 workers and produces 18 pizzas per day. Is Tony's Pizza technologically efficient? Why or why not? Can Tony increase production to 22 pizzas a day in the short run? If yes, how?

Tony's Pizza technologically efficient. The production function shows that 18 pizzas is maximum output that 2 workers can produce with 1 oven. Tony can increase production to 22 pizzas per day in the short run by hiring more labor.

c) Suppose Tony operates Plant 3. What is the marginal product of labor when the fourth worker is hired? When operating Plant 3, does Tony experience diminishing marginal returns? Explain.

When the 4th worker is hired, the marginal product of labor is the change in output, 40 pizzas-33pizzas= 7 pizzas, divided by the change in the labor input, 1 worker. So, the marginal product of labor for the 4th worker is 7 pizzas per day.

Tony experiences diminishing marginal returns because the marginal product of labor diminishes as more workers are hired.

d) Suppose Tony currently uses Plant 3. Can he increase production from 40 to 50 pizzas per day in the short run? In the long run? If yes, how?

If Tony uses Plant 3, he cannot increase production from 40 to 50 pizzas per day in the short run. The short-run production function for plant 3 shows that the maximum output that the firm can produce with this plant is 48 pizzas per day.

Learn more about pizzeria, refer to the link:

brainly.com/question/14408003

#SPJ1

7 0
2 years ago
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