summary- answer is B
Inflation O A. is more costly when it is anticipated than when it comes as a...
Which of the following statements is true? Equity is more costly to raise than debt because IPOs take a long time to organize Debt is more costly to raise than equity because it is riskier, thereby requiring higher returns Equity is more costly to raise than debt because it is riskier, thereby requiring higher returns Debt is more costly to raise than equity because the bond market is illiquid What is the goal of the Firm? To maximize shareholder value...
Below is a list of potential problems that inflation might
cause. Use the space on the left to name each of these with the
terms used in chapter 8.
___________ Lenders and workers are reluctant
to help firms produce output because the real value of future
dollar payoffs is unclear.
___________ Workers make decisions
on the basis of nominal rather than real wage changes.
____________ Unexpected inflation reduces
the real value of loan repayments.
____________ Firms cannot
distinguish whether there is a...
Under what circumstances is the ERR a more appropriate method than an IRR to evaluate a project? O A. When the IRR is much greater than the MARR OB. When the IRR is much less than the MARR O C. When the length of the project is greater than 20 years If the future worth is greater than zero, what does that mean about the project? O O A. The project should be considered for funding B. The project should...
Based on cost of inflation, Agree or disagree with this post and why When prices rise, buyers pay more for the things they want. On the other hand, the sellers are getting more money for the things they sell. Many people earn money by selling their services whether its labor or goods. Their rise in income from the inflation evens out with the inflation of prices when they buy things. You also have menu costs, the cost of changing the...
If expected inflation is constant, then when the nominal interest rate falls, the real interest rate O A. falls by more than the change in the nominal interest rate. falls by the change in the nominal interest rate. Oc rises by the change in the nominal interest rate. OD.rises by more than the change in the nominal interest rate. QUESTION 15 According to liquidity preference theory, if there were a surplus of money, then O A. the interest rate would...
1. When it comes to financial matters, the views of Aristotle can be stated as: a. usury is nature’s way of helping each other. b. the fact that money is barren makes it the ideal medium of exchange. c. charging interest is immoral because money is not productive. d. when you lend money, it grows more money. e. interest is too high if it can’t be paid back. 2. Since 2008, when the monetary base was about $800 billion,...
The Federal Reserve conducts monetary policy with a variety of goals in mind. Increasing the money supply can help spur investment and boost production in the economy, and the most common ways of increasing the money supply are buying bonds off of the open market, or lowering the discount rate, making it cheaper to borrow for investment. However, doing this comes at a cost of inflation, because there are more dollars chasing goods than before. Recently, the Federal Reserve has...
Question 27 (1 point) ✓ Saved According to the Classical Theory of Inflation: an increase in the price level causes the CPI index to fall to offset the increase. there is no relationship between price level increases and the value of money. These are two completely unrelated concepts. when the overall price level increases, the value of money also increases since it takes more money to purchase the same quant of goods as before. when the overall price level increases,...
The natural rate of unemployment tends to be lower when O A. the minimum wage is higher than the market wage. OB. unemployment insurance benefits are paid for fewer weeks. O C. labor unions are more effective OD. firms pay efficiency wages.
Cyclical unemployment results from a a mismatch of skills b being in the wrong geographical location c taking the time to find the best job d seasonal decreases in demand for labor e a recession in the economy 2 ) Frictional unemployment refers to unemployment that results from a a mismatch of skills b being in the wrong geographical location c taking the time to find the best job d seasonal decreases in demand for labor e a recession in...