A rise in unemployment will increase employment rents. Select one: O True O False

Q: Question 19 Which of the following is not an expense? Prepaid Expense. Cost of Good Sold. Salary…

A: Expense and revenues are two important element of income statement of business. Net profit is…

Q: What is a satisfactory investment? When the present value of benefits exceeds the cost of an…

A: Satisfactory investment refers to an investment  wherein the present value of benefits after…

Q: How does a cost-efficient capital market help reduce the prices of goods and services?

A: A market where the companies are registered and issue the long-term debt and equity securities to…

Q: What does it mean when ROI has decreased even though net income hasincreased?

A: Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in…

Q: Q) Why are social discount rates lower and social time horizons longer than any rate for an…

A: Social discount rates are used in the context of projects which have a social or environmental…

Q: Increased unemployment can reduce consumer demand for goods and services, leading to ?

A: Deflation is the state of economy in which overall price level decreases.

Q: What is a “required rate of return”? Why is it called the “cost ofmoney” or the “price of money”?

A: The required rate of return can be calculated by two methods, 1) Gordan's growth model  Gordan's…

Q: Which of the following variables are pro-cyclical?

A: Answer: Unemployment Rate and Labor force participation

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.