The expression, "there's no such thing as a free lunch" implies that:

What type of relationship exists between the growth of the money supply and changes in the inflation rate?

blondinia [14]

Answer: A direct relationship

Explanation: The link or relationship between money supply and inflation rate : In normal economic circumstances, if the money supply grows faster than real output it will cause inflation. In a depressed economy (liquidity trap) this correlation breaks down because of a fall in the velocity of circulation. This is why in a depressed economy Central Banks can increase the money supply without causing inflation. This occurred in the US between 2008-14

However, when the economy recovers and velocity of circulation rises, increased money supply is likely to cause inflation.

In other words ,If you are Increasing the money supply faster than the growth in real output will cause inflation. The reason is that there is more money chasing the same number of goods. Therefore, the increase in monetary demand causes firms to put up prices.

5 0

3 years ago

Interest versus dividend expense Michaels Corporation expects earnings before in- terest and taxes to be $50,000 for the current

Ganezh [65]

Answer:

a. In case of interest paid = $24,700.

b. In Case Preferred Dividend is Paid = $20,500

Explanation:

Earnings before Interest And Taxes (EBIT) = $50,000

a. In case of interest paid

EBIT = $50,000

Less: Interest = $12,000

Earnings Before Taxes = $50,000 - $12,000 = $38,000

Less: Tax @35% = $38,000 X 0.35 = $13,300

Earnings After Tax =$38,000 - $13,300 = $24,700.

This is the value available for common stock.

b. In Case Preferred Dividend is Paid

EBIT = $50,000

Less: Taxes @ 35 % = $50,000 X 0.35 = $17,500

Earnings After Tax = $50,000 - $17,500 = $32,500

Less: Preference Dividend = $12,000

Earnings available for equity or common stock = $32,500 - $12,000 = $20,500

The difference is of tax benefit on payment of interest as that is taxable and preference dividend is not taxable.

a. In case of interest paid = $24,700.

b. In Case Preferred Dividend is Paid = $20,500

7 0

3 years ago

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and

Svetradugi [14.3K]

Answer: $172,000

Explanation:

Its a little bit of a trick question throwing in the Debs that they want to sell for the month.

That figure is irrelevant because we are dealing with fixed costs so the company will still incur them regardless of what they sell.

The components of total budgeted fixed selling and administrative expenses are,

Advertising

Executive Salaries

Depreciation on office equipment and,

Others

Those are the only figures that should concern you. Adding them up would give us,

= 50,500 + 60,500 + 20,500 + 40,500

= $172,000

The total budgeted fixed selling and administrative expenses for February is $172,000

5 0

3 years ago

Nicki paid $900 for a camera that she thought was worth $1100 for all the features included in it. for the consumer electronics

FinnZ [79.3K]

Consumer surplus is difference between the amount that consumers are willing and able to pay for a good or service

In this case, Nicki is willing to pay $1,100 for the camera, but she is only asked to pay 900. So Nicki has a consumer surplus of $200

7 0

3 years ago

It is pizza night at the murphy home and everyone has an opinion about what they should get as a topping on the pizza. which cho

pishuonlain [190]

This isn't really a business question, but generally vegetables would be a healthier choice for a pizza topping instead of meats and cheeses.

7 0

3 years ago

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