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Amiraneli [1.4K]
2 years ago
15

Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 3 percen

t (which is 1 percent below the Fed's full-employment target of 4 percent). According to the Taylor Rule, what value will the Fed want to set for its targeted interest rate
Business
1 answer:
Dahasolnce [82]2 years ago
5 0

The government would set its targeted interest at 6.5%

Based on the Taylor's rule

R = π + A + 0.5(A-A*) + 0.5

This is the formula that helps to get the output gap

<u>Definition of terms</u>

R is the nominal federal funds rate

π is the real rate of federal funds = 2%

A is the rate of inflation

A* is the target of of inflation = 2%

Rate of unemployment = 3%

The government has a target of full employment that is at 4 percent.

When we enter the values into the formula

R = 2% + 3% + 0.5(3%-2%) + 0.5%(2%)

= 5% + 0.5% + 1%

= 6.5%

Therefore the government would set its targeted interest at 6.5%

Read more on brainly.com/question/14466278?referrer=searchResults

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Which of the following determines the process that a company will use to create its product? Group of answer choices a firm's mu
tekilochka [14]

Answer:

The answer is a firm's business level strategy

Explanation:

A strategy is a blueprint or a plan which spells out the major policies of an organisation, its goals and actions that will enables it to achieve the organisational objectives.

A firm business level strategy is a tool aimed at improving the competitive position of a firm's products within the market segment or industry that the firm operates.  It focuses on how a firm will satisfy customer's needs and gain competitiveness in the market in which it operates by  exploiting opportunities in market.  

6 0
3 years ago
Kirov, Inc. reports credit sales of $200,000 for the year ending December 31, 2015. The year- end unadjusted balance of its Allo
Korvikt [17]

Answer:

D. $12,000

Explanation:

Allowance for Doubtful accounts = Credit sales * Rate

Allowance for Doubtful accounts = $200,000 * 6%

Allowance for Doubtful accounts = $12,000

                       Allowance for doubtful account

Particulars                                            Particulars

Balance brought forward  $9,000     Bad debts       $12,000

Balance carried forward    $3,000  

Total                                    $12,000    Total               $12,000

Therefore, the amount to be debited to Bad debts and credited to Allowance for Doubtful accounts is $12,000.

4 0
2 years ago
Dream Homes is an appliance store. It recently launched its own brand of freezers in order to build customer loyalty. The store
Alex787 [66]

The Pricing strategy which Dream Homes implemented is known as Price lining (Option A) which categorized the prices accordingly with the financial soundness of the customers.

Explanation:

The demand for more goods always plays a vital role in ensuring good sales. The likes of the customers towards particular products depend upon the nature of unique features and its fine quality. By capturing the pulse of the purchasing power of the customers, the business ventures fixed the prices according to the level of economical weaker sections, middle, and high-income groups.

In this case, Dream Homes fix the price of freezers by measuring the ability of customers' to buy them without compromising with the customers requirements. Dream Homes uses the price lining method to gain customers' reputation by selling the products accordingly with their status of income level.      

8 0
2 years ago
Neuman Corporation Convertible Bonds The following data apply to Neuman Corporation's convertible bonds: Maturity: 10 Stock pric
Natalija [7]

Answer:

A. The bond’s conversion ratio is 28.57

B. The bond’s conversion value is $857.14

C. The bond’s straight debt value is $798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

Explanation:

A. In order to calculate the bond’s conversion ratio we would have to calculate the following formula:

bond’s conversion ratio=par value/conversion price

According to the given data:

par value=$1,000

Conversion price=$35

Therefore, bond’s conversion ratio=$1,000/$35

bond’s conversion ratio=28.57

B. To calculate the bond’s conversion value we would have to make the following calculation:

bond’s conversion value=bond’s conversion ratio*Stock price

bond’s conversion value=28.57*$30.00

bond’s conversion value=$857.14

C. To calculate the bond’s straight debt value we would have to calculate the following formula:

bond’s straight debt value=PV(0.08,10,50,1,000)

bond’s straight debt value=$798.70

D. The minimum price at which Neuman’s bonds should sell is $857.14

7 0
2 years ago
Explain why you can invest more stocks the younger you are?
zhuklara [117]

Answer:

The more you invest and the earlier you start means your retirement savings will have that much more time and potential to grow, compound earnings may be the result of investing earlier and continuing to invest.

Explanation:

8 0
2 years ago
Read 2 more answers
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