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Expansionary fiscal policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be ______

Alex

Expansionary fiscal policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be _<u>higher</u><u>_</u>and real GDP to be <u>higher.</u>

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What is Expansionary fiscal policy ?</h3>

Expansionary fiscal policy can be defined as the type of fiscal policy in which government intend to increase the aggregate money supply while on the other hand cut or reduce the tax rate for the purpose of economy growth.

In a situation were real GDP fall below potential real GDP this tend to lead to increase in both inflation rate and real GDP.

Inconclusion the inflation rate will be _<u>higher</u><u>_</u>and real GDP will be <u>higher.</u>

<h3 />

Learn more about Expansionary fiscal policy here:brainly.com/question/546292?source=archive

3 0

1 year ago

A 30-year maturity bond making annual coupon payments with a coupon rate of 8.5% has duration of 12.88 years and convexity of 23

marin [14]

Answer:

a. Predicted Price = $1815.52

b. Predicted Price = $1,834.64

c. Predicted Price = $1425.4

Explanation:

The actual price of the bond as a function of yield to maturity is:

Yield to maturity --- Price

7% $1,620.45

8% $1,450.31

9% $1,308.21

a.

Using the Duration Rule, assuming yield to maturity falls to 6%:

Predicted price change = (-D/(1 + y)) * ∆y * Po

Where D = Duration = 12.88 years

y = YTM = 7%

∆y = 6% - 7% = -1%

Po = $1,620.45

So, Predicted Change = (-12.88/(1 + 0.07)) * -0.01 * 1,620.45

Predicted Change = 195.0597757009345

Predicted Change = $195.06 ----- Approximated

Therefore the new Predicted Price

= $1,620.46 + $195.06

= $1815.52

b.

Using Duration-with-Convexity Rule, assuming yield to maturity falls to 6%

Predicted price change

= [(-12.88/(1 + 0.07)) * (-0.01) + (½ * 235.95 * (-0.01²))] * 1,620.45

= 214.1770345759345

= $214.18 ------ Approximated

Therefore the new Predicted Price

= $1,620.46 + $214.18

= $1,834.64

c.

Using the Duration Rule, assuming yield to maturity rise to 8%:

Predicted price change = (-D/(1 + y)) * ∆y * Po

Where D = Duration = 12.88 years

y = YTM = 7%

∆y = 8% - 7% = 1%

Po = $1,620.45

So, Predicted Change = (-12.88/(1 + 0.07)) * 0.01 * 1,620.45

Predicted Change = -195.0597757009345

Predicted Change = -$195.06 ----- Approximated

Therefore the new Predicted Price

= $1,620.46 - $195.06

= $1425.4

4 0

3 years ago

How the 4 factors of pruduction fit together land,capital,labor,entreprenurship

Mrrafil [7]

Explanation:

To understand the basic philosophy behind the four factors of production

Land - Labor - Capital - Entrepreneurship

Lets consider an example:

Someday, just finishing your college, you think of starting a pizza business and you start selling pizza's one day. You might end up making a Pizza brand like Pizza Hut.

Here, in this example, to start your pizza shop, you need a place or area, this is known as Land factor. When you start making pizza, you need someone to work in that shop, (or if you doing it by yourself too) there should be at least some human being doing it, this factor is referred as Labor. To start the pizza shop, you need to buy the equipment, taking a shop on rent, or buying it, renovation of the shop etc. All of these things need, of course, Money, which is referred as Capital here. The idea you going to start this business, the courage to make it, definitely makes you an Entrepreneur, in utilizing all other factors effectively and efficiently. Therefore, this is linkage between these four factors of production, and how they fit together.

7 0

3 years ago

Logan, an employee of Argon Industries, earned a salary of $60,000 in year 2. In addition, the following two transactions betwee

Mariana [72]

Answer:

$88,000

Explanation:

Calculation to determine What amount of compensation should Argon report in Logan's Form W-2 for year 2

First step is to determine the bargain element

Bargain Element=$25 per share-$10per share

Bargain Element=$15 per share

Now let determine the amount of compensation

Using this formula

Compensation=Salary earned+Taded stock+(Shares of publicly traded stock*Bargain element)

Let plug in the formula

Compensation=$60,000+$13,000+($100 shares*$15 per share)

Compensation=$60,000+$13,000+$15,000

Compensation=$88,000

Therefore the amount of compensation that Argon should report in Logan's Form W-2 for year 2 $88,000

8 0

3 years ago

You own a store. Beginning inventory on January 1 was $4,000. Ending inventory on December 31 was $4,500. You purchased $22,000

Butoxors [25]

Answer:

Explanation:

(a) The computation of the cost of goods sold is shown below:

= Beginning inventory + Purchase of new merchandise - ending inventory

= $4,000 + $22,000 - $4,500

= $21,500

(b) In the income statement, the total revenues and the total expenses are recorded.

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:

7 0

3 years ago