The appropriate discretionary fiscal policy to use when the economy is in a recession is increased government spending.
What is Discretionary Fiscal Policy? Discretionary fiscal policy is a kind of government policy that changes government expenditure or taxes to stabilize the economy. Government bodies use this policy to alter the pattern of aggregate demand in order to stabilize the economy. During a recession, the government should increase its expenditures, and during a boom, it should decrease its expenditures. On the other hand, when the economy is over-heated, the government should raise taxes in order to decrease demand.
Let's look at the given options:a. Increased government spending is the correct choice to be used when the economy is in a recession.b. Higher taxes is incorrect because it will reduce demand further.c. A balanced-budget reduction in both spending and taxes is incorrect because it reduces the overall spending that will not help in stabilizing the economy.d. An expansion in the money supply is a monetary policy, not a fiscal policy, which is used to reduce interest rates in order to increase spending. It is not used to stabilize the economy when it is in recession.
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if issuers of securities (borrowers) and investors suddenly expect interest rates to decrease, their actions to benefit from their expectations should cause:
If the issuers of securities (borrowers) and investors suddenly expect the interest rates to be decreased, their actions to benefit from their expectations should cause the interest rates to drop.
This can be done by increasing their demand for securities in the market, thus driving the prices up and decreasing the yield that investors get from those securities.
As a result, investors have to accept lower interest rates to purchase the securities, and issuers benefit from lower interest rates when borrowing. In other words, increased demand for securities in the market results in lower interest rates for issuers of securities.
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what techniques do companies use to identify potential applicants within their existing talent pools? (choose every correct answer.)
A company must first consider a number of factors in order to hire the best candidates.
What are the requirements that the company had to meet?To draw potential candidates out of a pool of applicants, a structured recruitment strategy is essential. The possible candidates should be knowledgeable, experienced, and capable of handling the responsibilities necessary to meet the organization's goals. The process of selecting the most qualified applicant for a position from a pool of candidates is known as selection. The following hiring strategies will assist your talent acquisition group in attracting qualified candidates:
Internal hiring and retained hiring
Staffing recruitment, contingent hiring.
Job fairs, temporary recruitment professionals, recruitment process outsourcing (RPO), and outplacement recruiting.
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suppose there is a simultaneous fed sale of bonds and increase in consumer confidence. what these two simultaneous events will cause?
Suppose there is a simultaneous fed sale of bonds and an increase in consumer confidence. When the Federal Reserve System sells bonds, it reduces the liquidity and money supply in the economy.
It reduces the amount of cash that banks and individuals have available to invest, lend, or spend. The sale of bonds by the Federal Reserve System also increases the interest rates of the bonds in the market.
When interest rates rise, borrowing costs rise as well. Consequently, it becomes less attractive to borrow money, and it could slow down business investment, growth, and overall economic activity.
On the other hand, when there is an increase in consumer confidence, it means that consumers are feeling more optimistic about their financial situations and the overall economy.
When consumers feel more confident, they tend to spend more and save less. Increased spending by consumers can boost economic growth by increasing the demand for goods and services, creating more job opportunities, and driving up prices.
Consequently, the simultaneous fed sale of bonds and increase in consumer confidence could have opposite effects on the economy. The sale of bonds could slow down the economic growth while the increase in consumer confidence could speed it up.
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minerva, who owns a small accounting firm, pays $3,000 to the local country club for food and entertainment for her annual employee holiday party. how much of the $3,000 in meals and entertainment cost can minerva deduct?
Minerva can deduct up to 50% of the $3,000 in meals and entertainment costs for her annual employee holiday party. According to the IRS, "you can deduct only 50 percent of your business-related entertainment expenses, including meals."
Minerva can deduct 50% of the cost of the meals and entertainment she provided at her employee holiday party as a business expense. Therefore, she can deduct $1,500 ($3,000 x 0.5) on her tax return. It is important to note that there are limitations and rules that apply to business entertainment expenses, so it is recommended that Minerva consult with a tax professional to ensure that she is correctly claiming the deduction and complying with all applicable tax laws.
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a company overstated its ending inventory at the end of year 1. if the error was not detected, cost of goods sold would be for year 1. multiple choice understated overstated correctly stated
A company overstated its ending inventory at the end of year 1. If the error was not detected, the cost of goods sold would be overstated for year 1.
Inventory refers to the collection of goods that a company has produced or acquired for future sale or for use in generating revenues. It is an important asset of a company since it represents the company's investment that is expected to be converted into cash during the course of normal business activities.
Cost of Goods Sold (COGS) refers to the cost of goods sold by a company during a certain period of time, such as a month, quarter, or year. COGS is deducted from a company's revenue to calculate its gross profit margin.
COGS is calculated using the following formula:
Beginning Inventory + Purchases - Ending Inventory = COGS
If the ending inventory is overstated, the COGS will be understated. This is because the ending inventory will be calculated to be higher than it actually is, which will reduce the COGS.
Therefore, if a company overstated its ending inventory at the end of year 1, the COGS for year 1 would be overstated if the error was not detected.
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inventory items on an assembly line in various stages of production are classified as o work in process. o merchandise inventory. o finished goods. o raw materials.
Merchandise Inventory items on an assembly line in various stages of production are classified as work in process.
Merchandise Inventory refers to the goods that a company has on hand and expects to sell in the future. Companies will categorize their inventory into three categories: raw materials, work-in-progress, and finished goods.
The following are the three categories of inventory:Raw materials: Unfinished inventory products, such as steel, wood, and plastic, that are utilized to construct finished goods.
Work-in-process (WIP) inventory: Products that are still in production but have yet to be completed are referred to as work-in-progress inventory. These items are frequently in the early or middle stages of production, requiring additional labor and resources to complete them.
Finished goods inventory: Finished products that are ready to be sold are referred to as finished goods inventory. These items are typically stored in warehouses and shipped directly to customers.In conclusion, inventory items on an assembly line in various stages of production are classified as work in process.
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True or False, a long-term asset is reported on the balance sheet at its original cost plus all expenditures necessary to get the asset ready for use.
True, a long-term asset is reported on the balance sheet at its original cost plus all expenditures necessary to get the asset ready for use.
A long-term asset is a classification of assets that a company hopes to keep for more than a year. Typically, long-term assets are items that a business relies on for its basic activities, such as land, buildings, and equipment. These items are often called fixed assets or property, plant, and equipment (PP&E).
A balance sheet is a financial statement that provides a snapshot of a company's financial position. The balance sheet presents a company's assets, liabilities, and equity at a specific point in time. The balance sheet is typically used by investors, creditors, and other stakeholders to determine a company's financial position and assess the company's ability to meet its obligations.
The statement of financial position, which is also known as the balance sheet, is used to record assets, liabilities, and equity on the financial statements. This statement provides a summary of a company's financial position by comparing its assets to its liabilities and shareholders' equity. The balance sheet demonstrates a company's financial stability at a specific time, and it is critical in deciding if the company can meet its long-term obligations.
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True or False: Although introverts are often quiet and inward-focused, they are usually the ones who actually get things done.
True. Introverts tend to be quiet and prefer to work independently, however they can be highly productive due to their focus and intense concentration.
They are often the ones to take initiative and get things done, rather than just talking about them. The statement "Although introverts are often quiet and inward-focused, they are usually the ones who actually get things done" is true. What is Introversion? Introversion is a personality trait characterized by a low level of engagement with the outside world. It is a quality seen in people who prefer to be alone or in quiet environments rather than socializing and being around a large number of people.
What is the meaning of Introvert? An introvert is someone who is usually very reserved, keeps to themselves, and is reflective. They like to have plenty of time to think about their thoughts and don't mind being alone or in small groups of people. Introverts, for the most part, prefer to have a few close friends rather than many casual acquaintances. This is why an introvert is often described as a shy person.
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when marginal utility is zero, total utility is group of answer choices at its minimum. at its maximum. decreasing. increasing.
When marginal utility is zero, total utility is at its maximum.
This is because total utility is the sum of all marginal utilities. When marginal utility is zero, no further increase in utility can be gained by consuming more of the good or service.
Therefore, total utility is maximized and cannot increase further.
This concept is based on the law of diminishing marginal utility, which states that as more of a good or service is consumed, the marginal utility of each additional unit decreases.
Therefore, when marginal utility reaches zero, total utility cannot increase anymore and is thus maximized.
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A credit card company monitors cardholder transaction habits to detect any unusual activity. Suppose that the dollar value of unusual activity for a customer in a month follows a normal distribution with mean $250 and variance $391. a. What is the probability of $250 to $300 in unusual activity in a month? (5 points) h What is the probability of more than $300 in unusual activity in a month? (5 points) C. Suppose that 10 customer accounts independently follow the same normal distribution. What is the probability that at least one of these customers exceeds $300 in unusual activity in a month? (10 points)
a. To find the probability of $250 to $300 in unusual activity in a month, we need to calculate the z-scores for $250 and $300. The mean is $250 and the standard deviation is the square root of the variance, which is sqrt($391) ≈ $19.75.
Z-score for $250: (250 - 250) / 19.75 = 0
Z-score for $300: (300 - 250) / 19.75 ≈ 2.53
Now, using a z-table, we find the probability of having a z-score between 0 and 2.53. The corresponding probabilities are 0.5 and 0.9943. Therefore, the probability of $250 to $300 in unusual activity in a month is 0.9943 - 0.5 = 0.4943, or 49.43%.
b. To find the probability of more than $300 in unusual activity in a month, we use the z-score for $300, which is 2.53. The probability of having a z-score less than 2.53 is 0.9943, so the probability of more than $300 is 1 - 0.9943 = 0.0057, or 0.57%.
c. To find the probability that at least one of these 10 customers exceeds $300 in unusual activity in a month, we first calculate the probability that none of them exceed $300. The probability of a single customer not exceeding $300 is 1 - 0.0057 = 0.9943. For 10 independent customers, the probability of none of them exceeding $300 is (0.9943)^10 ≈ 0.9573. Therefore, the probability of at least one customer exceeding $300 is 1 - 0.9573 = 0.0427, or 4.27%.
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an insured wants to fly to canada and then down to mexico. will he have coverage available for this trip?
The availability of coverage for a trip to Canada and Mexico would depend on the terms and conditions of the insurance policy held by the insured. If the policy includes coverage for international travel, then the insured may have coverage for the trip to Canada and Mexico.
However, it is important for the insured to review their policy carefully and understand the coverage limitations and exclusions. Some policies may limit coverage for travel to certain countries or regions, or may exclude coverage for certain types of activities, such as extreme sports or adventure travel.
In addition, the insured should consider purchasing additional coverage specifically for international travel, such as travel medical insurance, trip cancellation insurance, or emergency medical evacuation insurance. These types of policies can provide additional protection and peace of mind for travelers, particularly when traveling outside of their home country.
It is also important for the insured to comply with any requirements or restrictions imposed by their insurance policy or the countries they are visiting.
For example, some policies may require the insured to notify the insurer before traveling internationally, or may require the insured to obtain certain vaccinations or medical clearances before traveling to certain countries.
In summary, whether or not the insured will have coverage available for a trip to Canada and Mexico will depend on the specific terms and conditions of their insurance policy.
It is important for the insured to review their policy carefully and consider purchasing additional coverage for international travel to ensure they are adequately protected during their trip
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a cost that was incurred in the past and cannot be changed regardless of which future action is taken is a(n) .
A cost that was incurred in the past and cannot be changed regardless of which future action is taken is a(n) sunk cost. A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of any future action taken.
This means that a sunk cost should not be considered when making decisions about future investments, as it has already been paid.
For example, if a business purchased a piece of equipment for $1000 and that equipment is no longer useful for the business, the $1000 cost is considered a sunk cost and should not be taken into account when making future decisions about purchasing new equipment.
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______ is a type of manufacturing process used to make a wide variety of highly customized products in quantities as small as one
Additive manufacturing is a type of manufacturing process used to make a wide variety of highly customized products in quantities as small as one.
Additive manufacturing is the process of creating an object by laying down one layer at a time. 3D printing is the most well-known form of additive manufacturing. The method entails using a computer-aided design (CAD) software to create a 3D model. A 3D printer then reads the design and produces a three-dimensional object. The machines are essentially robots that can create a single part or a complete assembly of parts.
These methods have the potential to develop products of exceptional complexity that would be impossible or difficult to make by traditional manufacturing processes. Additive manufacturing is a method that has been used to manufacture highly customized products in quantities as small as one. The items are manufactured from the ground up, layer by layer. Because of the decreased labor and material expenses, additive manufacturing is often faster and less expensive than traditional manufacturing processes.
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a higher residual value will result in a(n) depreciation expense per year and a(n) net income. need help? review these concept resources.
A higher residual value will result in a lower depreciation expense per year and a higher net income.
To understand this concept, depreciation is an accounting practice of allocating the cost of a long-term asset over its useful life.
The residual value of an asset is the estimated value of the asset at the end of its useful life.
Therefore, when the residual value is higher, the amount of depreciation expense per year will be lower and the net income will be higher.
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when the ipad mini came out, yvonne spent the night in front of the store so she could get one before any of her friends. according to the diffusion of innovation, yvonne is a(n)
So she is an innovator because she wants to buy an iPad right away.
What exactly is an innovator?An innovator is someone who can turn new knowledge and skills into a profitable product or service. It could take small or large forms, but (in general) it refers to bringing about some kind of significant positive change. They identify and act on opportunities for improvement. He is a true pioneer and innovator who always exceeds expectations and follows his visions: He is a true pioneer and innovator who always sets new standards and follows his visions. In this situation
Yvonne wants to buy new ipad mini on the first go.
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which is the largest component of gdp? answer unselected consumption unselected government spending unselected investment
The largest component of GDP is Investment.
Investment is spending on goods that are not consumed today but are used in the future to create more wealth. It includes investment in factories, machinery, technology and buildings, and can be undertaken by both the private sector and the government.
Investment also includes additions to inventories, which are goods produced and held in anticipation of future sales.
Investment is a key factor in economic growth, as it allows businesses to expand their production capacity, which leads to higher levels of output and employment. Investment is typically the largest component of GDP, often making up around 25% of the total.
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a customer gives a power of attorney to a caretaker to vote his shares on his behalf at the company's annual meeting. this is called (a):a discretionary authorityb voting trustc proxyd trading authorization
A power of attorney given to a caretaker to vote a customer's shares on his behalf at the company's annual meeting is called a proxy.
A proxy gives the caretaker authority to make decisions for the customer regarding the voting of the shares.
A discretionary authority is an authority given to a person to make decisions in the best interests of someone else. A voting trust is an arrangement in which the shares of a company are transferred to trustees and voted by them according to the terms of the trust.
A trading authorization is an authorization to trade securities on behalf of a customer.
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joaquin and jill are thinking of expanding their pet store business by using the large unused space at the back of their store. since they do not know how to do this, they decide to conduct some marketing research. before they can even begin their actual research, however, what is the first thing they must do?
Before Joaquin and Jill can begin their marketing research for expanding their pet store business, the first thing they must do is define the research problem or question they are trying to answer.
This involves clearly identifying and articulating the specific issue or opportunity they are trying to address, and the goals and objectives of their research.
By defining the research problem or question, Joaquin and Jill can ensure that their research is focused and relevant and that they gather the necessary information to make informed decisions about expanding their business. This initial step is critical to the success of any marketing research project, as it sets the direction and scope of the research and guides subsequent research activities.
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amber wants to buy joe's house for $200,000. they agree on a price and a closing date. the two shake hands and agree to meet on the closing date, at which time amber will give joe the $200,000 and joe will deliver title to amber. do amber and joe have a contract? yes. only consideration is needed for a valid contract.
Yes, Amber and Joe have a contract, and only consideration is required for a valid contract. In legal terms, a contract is an agreement between two or more parties that creates an obligation to perform a specific job or perform a specific duty.
The following elements must be present to create a legally binding contract: Offer and acceptance: One party must offer something, and the other party must accept it.
Meeting of the minds: The parties must have the same understanding of the agreement. Consideration: Something of value must be exchanged between the parties in order to create a binding agreement.
Competency: The parties must be legally able to enter into a contract.
Legality: The subject matter of the contract must be legal and not against public policy.
In the given case, Amber wants to purchase Joe's house for $200,000. They agree on the price and the closing date. Both of them shake hands and agree to meet on the closing date, at which time Amber will give Joe $200,000, and Joe will deliver title to Amber.
All the elements mentioned above are present in this case, so Amber and Joe have a contract. Therefore, the statement that "Yes". Only consideration is needed for a valid contract is correct.
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do the six split-halves statistics suggest to you that returns come from the same distribution over theentire period?
Yes, the six split-halves statistics suggest that returns come from the same distribution over the entire period.
Split-halves testing measures the similarity of two halves of a dataset. By comparing the means, variances, and correlations between the two halves, it can be determined if the dataset is homogeneous or not.
The results of the split-halves test indicate that the two halves of the dataset are similar enough that they can be assumed to come from the same underlying distribution.
This suggests that the returns of the period in question can be expected to be consistent over the entire period.
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if payments of $5900 are made into an annuity semi-annually with an interest rate of 9.9%, compounded semi-annually, find the future value of the annuity at the end of 4 years.
The future value of the annuity at the end of 4 years is $86,927.36
Calculate the future valueThe future value of an annuity with payments of $5900 made semi-annually with an interest rate of 9.9%, compounded semi-annually, at the end of 4 years can be found using the following formula:
FV = PMT * (((1 + i)^n - 1) / i),
where PMT is the periodic payment amount, i is the periodic interest rate, and n is the number of compounding periods.
In this case, PMT = $5900, i = 0.0495 (9.9% / 2), and n = 8 (4 years x 2 semi-annual payments).
Therefore, FV = $5900 * (((1 + 0.0495)^8 - 1) / 0.0495) = $86,927.36.
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in terms of brand loyalty, consumers are very brand loyal and will not accept substitutes for which type of consumer product?
In terms of brand loyalty, consumers are very brand loyal and will not accept substitutes for luxury goods. What is brand loyalty? Brand loyalty refers to a consumer's affinity for a specific brand over others in the same product category.
Brand loyalty is the result of the product's perceived superiority, innovation, and perceived benefits.
The term brand loyalty is used to describe the degree of customer attachment to a brand, and it is one of the most crucial factors in a company's success.
Luxury goods can be understood as the goods that are rare, exclusive, expensive, and have a high status quotient. In general, consumers of luxury goods are very brand-loyal and are not inclined to accept substitutes.
A typical example of luxury goods is high-end watches, perfumes, and accessories, such as Gucci or Rolex watches. Thus, in terms of brand loyalty, consumers are very brand loyal and will not accept substitutes for luxury goods. Consumers may exhibit brand loyalty because they appreciate the brand's quality, aesthetics, service, or performance.
Another factor that contributes to brand loyalty is the emotional bond that consumers have with the brand. This emotional bond is the result of the consumer's association with the brand and the perception of the brand as an extension of themselves or their self-image. Brand loyalty can also be influenced by the consumer's social circle, family members, and peers.
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multiple choice question remaining is the key to an organization's success in changing times. multiple choice question. flexible inflexible stable consistent
The remaining key to an organization's success in changing times is consistent.
What is consistent?
Consistent means the quality of achieving a level of stability and maintaining continuity by doing a task in a reliable and disciplined manner. It can be determined by the degree to which an individual repeats a pattern, and the extent to which they avoid doing things differently even though it may appear appealing. It involves concentrating on the job at hand and finishing it in a dependable and repetitive manner.
If people are always doing the same thing in the same manner, then there will be no surprises or problems. Furthermore, it is an essential feature of successful businesses. Consistent efforts are necessary for attaining any goal, and they play a vital role in a company's success.
Consistent efforts allow an organization to maintain the quality and remain ahead of competitors. This kind of approach helps in the decision-making process, especially when it comes to bringing in new strategies or modifications.
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Answer:
flexible
Explanation:
a companys balance sheet has toatl assets of 400000 and total equity of 350000 what are the total liablities
The liabilities are $50,000.What are liabilities?Liabilities are amounts owed by a company or a person to others, which are usually paid in the future in the form of goods or services.
What is a balance sheet?A balance sheet is a financial statement that reports a company's financial position as of a certain date by providing a summary of the company's assets, liabilities, and equity. A balance sheet can help investors determine a company's financial health by analyzing the company's assets, liabilities, and equity.What are assets?Assets are items of economic value owned by a company or a person, which are expected to generate cash in the future in the form of income or profit.
The following are some examples of assets:Cash, inventory, accounts receivable, property, and equipment are all examples of tangible assets. Goodwill, patents, and copyrights are all examples of intangible assets.What is equity?Equity is the residual interest of the owners in the assets after deducting the liabilities. Equity is also known as owner's equity or shareholder's equity. The following is a list of equity accounts:Common stock, retained earnings, and additional paid-in capital are examples of equity accounts.
How to calculate total liabilities?To calculate the total liabilities, we must use the balance sheet formula. That is,Total Liabilities = Total Assets - Total Equity.Substituting the given values,Total Liabilities = $400,000 - $350,000.Total Liabilities = $50,000. Answer: The total liabilities are $50,000.
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An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected
return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14%
and a standard deviation of return of 20%. The correlation coefficient between the returns of A
and B is 0.4. The risk-free rate of return is 5%.37. The proportion of the optimal risky portfolio that should be invested in stock B is
approximately _________.
i was able to get thi one without problem, i need , i nee the process for 38 and30 only, thanks, please be clear on the steps.
A. 29%
B. 44%
C. 56%
**D. 71%
WB = 71%
Difficulty: Hard
To find the proportion of the optimal risky portfolio that should be invested in stock B, you can use the following formula:
WB = [(E(RA) - Rf) * σB^2 - (E(RB) - Rf) * σA * σB * ρAB] / [(E(RA) - Rf) * σB^2 + (E(RB) - Rf) * σA^2 - (E(RA) - Rf + E(RB) - Rf) * σA * σB * ρAB]
Where:
WB = proportion invested in stock B
E(RA) = expected return of stock A (21%)
E(RB) = expected return of stock B (14%)
Rf = risk-free rate of return (5%)
σA = standard deviation of return for stock A (39%)
σB = standard deviation of return for stock B (20%)
ρAB = correlation coefficient between returns of A and B (0.4)
Plug in the values and perform the calculations:
WB = [(0.21 - 0.05) * (0.20^2) - (0.14 - 0.05) * (0.39) * (0.20) * (0.4)] / [(0.21 - 0.05) * (0.20^2) + (0.14 - 0.05) * (0.39^2) - (0.21 - 0.05 + 0.14 - 0.05) * (0.39) * (0.20) * (0.4)]
WB ≈ 0.71 or 71%
So, the proportion of the optimal risky portfolio that should be invested in stock B is approximately 71% (Option D).
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if consumers expect their future real incomes to rise, current consumption spending and the aggregate demand curve shifts to the .
If consumers expect their future real incomes to rise, current consumption spending and the aggregate demand curve shifts to the right.
What is aggregate demand curve?The demand and supply of all products and services produced by an economy are the main topics of discussion in macroeconomics. As a result, the term "aggregate demand" is also used to refer to the total demand for all individual commodities and services. Aggregate supply is the term used to describe the total supply of all separate commodities and services. The aggregate demand and supply for an economy can be represented by a timetable, a curve, or an algebraic equation, much like the demand and supply for individual commodities and services.
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the increase in the number of units of a product that can be produced by hiring an additional employee is called the product of that employee.
The increase in the number of units of a product that can be produced by hiring an additional employee is called the product of that employee.
The product of an employee is a measure of their productivity.
Productivity : Productivity refers to the amount of output obtained from an input. Productivity is defined as a ratio of output to input. In other words, productivity is the rate of production. It indicates how efficiently or effectively resources are utilized in the production process.
In a manufacturing plant, for example, productivity may be assessed by calculating the amount of goods produced per employee. The product of an employee is a measure of their productivity. When a new employee is added to the manufacturing team, their product is the additional amount of goods produced. If an existing employee is made to work harder, their product may increase.
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when mo's income went up by 50%, all else equal, he increased the number of times he goes to the ballet each year by 20%. for mo, the ballet must be:
When Mo's income went up by 50%, all else equal, he increased the number of times he goes to the ballet each year by 20%. Therefore, for Mo, the ballet must be an inferior good.
An inferior good is a product whose demand decreases when the consumer's income increases. The inferior good is used to describe the consumer's behavior when they purchase less expensive substitutes for a more expensive product because of the consumer's decline in purchasing power as their income rises.
Mo is earning more money now, but the number of times he goes to the ballet is still lower than when he was making less money. The percentage increase in the number of times he goes to the ballet is lower than the percentage increase in his income. As a result, ballet must be an inferior good for Mo.
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g if your employer gives you a raise that is equal to the inflation rate, then your real salary will have increased. if your employer gives you a raise that is equal to the inflation rate, then your real salary will have increased. true false
True. Your nominal wage will have grown by the same proportion as the inflation rate if your company offers you a raise that is equal to that rate.
Yet, as your purchasing power remained the same, your actual wage (i.e., your income adjusted for inflation) will likewise have climbed by that same proportion.
This is so that the same amount of money may purchase fewer products and services since inflation depreciates the value of money over time. By boosting your nominal wage by the inflation rate, your employer is simply modifying your compensation to keep up with the rising cost of living, which means you can continue to afford the same quantity of products and services as before the inflation.
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a government official observes that there has been a short-run increase in the price level. the increase in the price level could have been caused by:
An increase in the money supply, an increase in government spending, or an increase in aggregate demand
A short-run increase in the price level could be caused by an increase in the money supply, an increase in government spending, or an increase in aggregate demand. These could lead to an increase in the prices of goods and services, which is known as inflation.
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