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suter [353]
2 years ago
14

You are the head of the central bank and you want to maintain a 2 percent long-run inflation rate. Suppose that velocity is cons

tant and real GDP growth is 3 percent per year. Moreover, you know that the current money supply is $120 billion. Your money supply target for one year from today is $______ billion.
Business
1 answer:
pshichka [43]2 years ago
5 0

The answer I think is 12 billion

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You are considering to buy a $250,000 property with a 80% LTV ratio and have two mortgage choices: a FRM or a FRM with an IO per
scoray [572]

Answer:

Statement # 1: False

Statement # 2: True

Statement # 3: False

Statement # 4: True

Explanation:

Lets look at each statement provided in the question and determine which of them is true or false.

Statement # 1 is false. First things first, the interest on this loan amount is higher which is at 4.15%. This is compared to the interest of 4% applicable on loan option 1. Secondly, there is a four year interest only option. This means that for 4 years there will be no repayments of the principal amount which means that the interest of 4.15% will continue to apply on the entire loan amount for these 4 years. In loan 1 however, principal repayments will reduce the principal amount after the 1st year which would further reduce the interest payment in the second year.

Statement # 2 is true. Loan 2 has an interest only period for the first 4 years. During this year you will only pay the 4.15% interest whereas in loan option 1, you will pay 4% interest AND the principal amount. The effect would offset once principal payments start in loan 2 but it would still mean that payments would be minimized in the first few years.

Statement # 3 is false. One of the advantages of having a loan with an interest free clause is that you can pay it off faster than a conventional loan. Since both the loans are fully amortizing, the principal payments would be different but would both result in the principal being repaid in the full 30 year tenor. Any extra payment that you wish to make would be counted towards principal payment in each loan option. However, for loan 1, the total monthly payments you make would remain the same. For loan 2, the extra payments that you make will continue to lower the monthly payments in way of interest which would allow you to save up more to pay more off in principal. The interest only period will also allow you to arrange extra funds during the IO period and repay the principal further. With loan 1, you will continue to make the same monthly payment until the end.

Statement # 4 is true. A fixed payment is being made each year by way of interest and principal repayments and will remain the same till the loan is fully amortized at maturity. In loan 2 on the other hand, a larger balloon payment will start 4 years later since only interest is paid in the first 4 years. So basically you may lower in the first 4 years and more in the remaining years.

5 0
3 years ago
Sthilaire Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.52 direct la
Fed [463]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Each unit of output requires 0.52 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 1,700 units in April and 1,600 units in May. The company is committed to paying its direct labor workforce for at least 960 hours a month.

We need to calculate the total number of hours required each month.

April:

Direct labor hours= 1,700 units* 0.52= 884 hours

Total cost= 960 hours*$9= $8,640

May:

Direct labor hours= 1,600 units* 0.52= 832 hours

Total cost= 960 hours*$9= $8,640

3 0
3 years ago
Elasticity is _______
balu736 [363]

Answer:

OPTION A        

Explanation:

In economics elasticity refers to the calculation of an empirical parameter's relative shift in reaction to a change in the other. It depicts how difficult it is for both distributor and customer to change their habits and replace another product, the power of an opportunity over options per the relative price of opportunities.                        

Elasticity could be measured as proportion of variation in magnitude in one parameter to change in magnitude in an other parameter if the latter variable has a substantive effect on the previous. In form of the algebra a more precise description is provided. This is a tool to measure one factor's sensitivity to variations in the other, correlative static.                

5 0
4 years ago
The average 6-year-old child from a developed nation weighs _____ pounds.
xxTIMURxx [149]
The average 6 year old weighs about 44 pounds
5 0
4 years ago
You purchased 340 shares of a particular stock at the beginning of the year at a price of $77.03. The stock paid a dividend of $
Mekhanik [1.2K]

Answer:

Return on the investment  = 10.8%

Explanation:

<em>The return on a stock is the sum of the capital gains(loss) plus the dividends earned.</em>

<em>Capital gain is the difference between he value of the stocks when sold and the cost of the shares when purchased.</em>

Total shareholders Return =

(Capital gain/ loss + dividend )/purchase price × 100

So we can apply this to the formula:

Dividend = 1.8 × 340= $612

Capital gain = (83.54-77.03)× 340 =$ 2213.4

Cost of shares = 340 × 77.03= $26,190.2

% return =  (612 + 2213.4)/ 26,190.2 × 100

= 10.8%

6 0
3 years ago
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