Answer:
Increase the currency-deposit ratio
Decrease money supply
Explanation:
The federal government made the move in order to balance their budget with he notion that with the introduction of the 2 cents on every bank cheques, it will dissuade people from doing bank deposit and switch to currency which will inturn reduce money supply.
Answer:
The correct answer is option c.
Explanation:
Forlornistan is experiencing an economic downturn, the GDP has steadily declined, the employment rate is very low and the CPI is falling.
All these characteristics show that the economy is going through economic depression.
Depression refers to the situation in which an economy suffers a downturn in economic activities. It involves decrease in output level, price and employment rate.
Answer:
(a) Assumption
(b) Cause and Effect
(c) Cause and effect
(d) Assumption
Explanation:
(a) People behave rationally: Assumption
Rational behavior refers to a decision-making process that is based on making assumptions that result in an optimal level of benefit or utility.
(b) Cause and Effect
If a price of goods falls that is a cause and the effect is that people will consume more of the good.
(c) Cause and effect
As the population grows faster than food supply (cause), mass starvation is predicted to occur which is the resultant effect.
(d) Assumption
The maximization of profit is based on the assumption of theory of production and costs.
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Answer:
The share is worth $5.68 today.
Explanation:
The current price of the stock can be calculated using the DDM or dividend discount model. The DDM values the stock based on the present value of the expected future dividends from the stock.
The following is the formula for the price of the stock today,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + Terminal value / (1+r)^n
The terminal value is the cumulative value of all the future dividends calculated when the dividend growth becomes zero or constant. In case the dividend growth becomes constant, like in this case, the terminal value is calculated as follows,
Terminal value = Dn * (1+g) / r - g
Where,
- g is the Constant growth rate in dividends
So, the price of this stock today is,
P0 = 0.65 / (1+0.145) + 0.70 / (1+0.145)^2 + 0.75 / (1+0.145)^3 +
((0.75 * (1+0.02) / (0.145 - 0.02)) / (1+0.145)^3
P0 = $5.678 rounded off to $5.68
