Assume the economy is initially operating at the natural level of output. The IS curve will shift to the right when which of the following occurs? General Mills just is undertaking an analysis on a new cereal. a. a central bank sale of bonds. What is the rate of return on this project. Given this information, we would expect that: We … If the answers is incorrect or not given, you can answer the above question in the comment box.          c. the nominal wage will increase by more than 5% Suppose workers and firms expect the overall price level to increase by 5%. d) most likely lower the cost of borrowing. b. will cause investment to increase. d. higher output and lower investment. Live coverage of the 2020 presidential election, How a contested election would affect the markets, LeBron James endorses Biden after Trump attack, Stern commends Swift for taking a political stance, Trump signals he won't try to declare victory prematurely, Clothing items that may get you turned away from the polls, WH coronavirus adviser warns of new 'deadly phase', Jerry Jones: DiNucci's 1st NFL start was 'a lot for him', 'Hamilton' star changes lyrics of song for voters, First results are in from tiny New Hampshire town, How Georgia’s blue drift changes politics nationwide. The response in reality is more similar to that shown in Figure 2: higher money growth reduces the nominal and real interest rate in the short run and leads to an increase in the rate of inflation only slowly over time. d. all of the above. b. less investment. Answer Save. b. inventory investment equals zero. a. an increase in the money supply. d. will have no effect on output. d. all of the above. a. The risk-free rate is 4 percent. During the year, Kitchen Supply increased its accounts receivable by $130, decreased its inventory by $75, and decreased its accounts payable by $40. The firm realizes that if they come out with a new product it would affect sales of existing products? Become a member and unlock all Study Answers Try it risk-free for 30 days Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent. 7. a. a. greater investment. e. none of the above. a. an open market sale of bonds b. an increase in the reserve deposit ratio (i.e., q) d. consumer confidence. Relevance. a. the goods market is in equilibrium. Which one of the following statements is NOT true about preferred stock? b. an increase in government spending. MCQ An increase in the expected real interest rate tends to a. raise desired investment only. The constant-growth dividend model will provide invalid solutions when a. the growth rate of the stock exceeds the required rate of ret... Capital rationing implies that A) the firm does not have enough resources to fund all of the available projects. c. an increase in the interest rate causes a reduction in the money supply. c. an open market sale of bonds by the central bank. d. all of the above. Lastly consider the effects of an increase in real GDP. b. monetary policy. Which of the following occurs as the economy moves leftward along a given IS curve? The constant-growth dividend model will provide invalid solutions when. An increase in the money supply holding the real interest rate constant requires a higher level of income to make the demand for money equal to that greater supply, shifting LM to the right. e. none of the above. 5. The nominal interest rate = real interest rate + inflation rate. d. an increase in consumer confidence. 1. Now suppose that individuals decide to reduce their desire to save. Which of the following events will cause the interest rate to increase? A) most likely lower the reward of saving, b) most likely lower consumers purchases of durable goods, c) cause consumers to spend more and save less, d) most likely lower the cost of borrowing. e. an increase in taxes causes a reduction in demand for goods. d. the real wage will increase by 5% e. the real wage will increase by less than 5% 9. c. a reduction in the interest rate. The money supply will tend to fall when which of the following occurs? The LM curve shifts down (or, equivalently, to the right) when which of the following occurs? b) most likely lower consumers purchases of durable goods. An increase in the expected real interest rate tends to Mat 22:32 FIN201 Chapter 1.          d. all of the above 3. c. money supply equals money demand. e. none of the above. If the answers is incorrect or not given, you can answer the above question in the comment box.          d. the real wage will increase by 5% The annuity transformation method is used to transform. Therefore, a fall in the real interest rates leads to a decrease in loanable funds' quantity. A) most likely lower the reward of saving. What is the best course of action for General Mills in this analysis? d. a reduction in government spending causes a reduction in demand for goods. e. all of the above. e. will cause a reduction in output and have no effect on the interest rate. For each interest rate, the LM curve illustrates the level of output where: Which one of the following statements is NOT true about the general dividend valuation model? The project will yield cash flows of $2832 monthly for 84 months. The combinations of income and the real interest rate at which the demand for … CoursePivot ©2020.          a. the nominal wage will increase by less than 5% Join Yahoo Answers and get 100 points today. b. raise both desired saving and desired investment.          e. the real wage will increase by less than 5% D. will prevent firms from defaulting on their loans. e. none of the above. Is it legal for a land lord to ask you about an old irrelevant court judgement you no longer owe or contact people you know about it? C. shifts the optimal investment schedule to the right.          b. the nominal wage will increase by exactly 5% Estimate a venture's terminal value based on the following information: current year's net sales = $500,000; next year's expected cash flow = $16,000; constant future growth rate = 10%; and venture investors' required rate of return = 20%. a. an increase in taxes. Answer questions 12 through 15 about a call with an exercise price of 80. c) cause consumers to spend more and save less. An increase in the real interest rate will? 2. In the aggregate supply relation, the current price level depends upon: c. raise desired saving only. When signing a lease, can I cross out the terms I do not agree to before signing? c. a shift in public preferences away from currency to checkable deposits.          c. an increase in income Assume a one-period world. In the 1950s the average real interest rate (nominal rate minus inflation rate) on one-year treasuries was 0.12, in the 1960s 1.97, 1970s 0.28, and 1980s 4.37. Get help from verified. 1 Answer. c. fiscal policy.          b. an increase in the reserve deposit ratio (i.e., q) Which of the following events will cause the interest rate to increase? When drawn against the real interest rate, an increase in the default premium Select one: A. lowers the real interest rate and firms invest more. e. no change in the economy at all. For this question, assume that investment spending depends only on the interest rate and no longer depends on output. The wine press is considering a project which has an initial cash requirement of $187,400. a. expected price level. 1 decade ago. Consider a binomial world in which the current stock price of 80 can either go up by 10 percent or down by 8 percent. B. raises the safe credit market interest rate for a lender. a. an open market sale of bonds The annuity transformation method is used to transform A) a present value annuity to a future value annuity. Which one of the following statements is NOT true about preferred stock? If the answers is incorrect or not given, you can answer the above question in the comment box. b. an increase in the interest rate causes money demand to increase. 9. Given this information, a reduction in the money supply Effect of a Real GDP Increase (i.e., Economic Growth) on Interest Rates. The Structure Of Forward And Futures Markets. How do I put my landlord on notice that I won't follow pet rules? 8. Such an increase represents economic growth. Which one of the following statements is NOT true about the general dividend valuation model? b. c. may cause investment to increase or to decrease. Preferred stock represents ownership in the firm. B) a present value annuit... Estimate a venture's terminal value based on the following information: current year's net sales = $500,000; next year's expec... An increase in the expected real interest rate tends to. The project will yield cash flows of $2832 mont... General Mills just is undertaking an analysis on a new cereal. Affordable and reliable online tutors, Have a homework question? The wine press is considering a project which has an initial cash requirement of $187,400. a. will cause investment to decrease. Thus, the study of the effects of a real GDP increase is the same as asking how economic growth will affect interest rates. wert. 10 . Still have questions? How did these three accounts affect the firm's cash flow for the year? b. an increase in output. We know with certainty that which of the following will occur in the short run as a result of decreased desire to save? 4. Get your answers by asking now. c. an increase in the nominal wage. 6. a. an increase in the interest rate causes investment spending to decrease. Can a landlord not accept a check from me for rent payment . The real interest rate is the interest rate corrected for inflation, in the sense that it is the interest rate measured in increase in wealth (purchasing power), rather than just monetary terms. b. a decrease in the ratio of reserves to deposits. d. raise desired saving, but lower desired investment.

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