Yes, the given statement can be marked as true as it would indicate a larger rise in prices relative to a decrease in output.
<h3>Why would Nominal GDP increase but real GDP decrease?</h3>
When nominal GDP increases and it is higher than real GDP, then it shows that inflation is occurring but when real GDP is higher than nominal, then it means deflation is occurring.
In an economy with a high inflation, it will experience an increase in nominal GDP no matter if the real amount of goods and services produced decreases.
The GDP deflator measures the the overall change in prices in an economy, by using the ratio between real and nominal GDP.
Learn more about the real and nominal GDP here:-
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Answer:
Statement of retained earnings
For the year ended 2017
Retained earnings, January 1, 2017 $0
Add: Net Income $54,000
Less: Dividends $<u>22,000</u>
Retained earnings, December 31, 2017 <u>$32,000</u>
Statement of retained earnings
For the year ended 2018
Retained earnings, January 1, 2018 $0
Add: Net Income $59,000
Less: Dividends <u>$34,000</u>
Retained earnings, December 31, 2018 <u>$25,000</u>
Answer:
Answer is 12.64%. Therefore,
Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least 12.64%.
Refer below for the explanation.
Explanation:
E - 4%= 0.5(3)(24%)2
E=12.64%
Answer:
Explanation:
The journal entry is shown below:
Cash A/c Dr $768,000
Service Charge Expense A/c $32,000
To Accounts Receivable A/c $800,000
(Being the cash is received and the remaining balance is debited to the cash account )
The computation of the service charge expense is shown below:
= Accounts Receivable × service charge percentage
= $800,000 × 4%
= $32,000
