KIf the natural unemployment rate increases and the expected inflation rate remains constant, thenA. neither the long-run Phillips curve nor the short-run Phillips curve shiftsB. the long-run Phillips curve shifts rightward and the short-run Phillips curve shifts rightwardC. the long-run Phillips curve shifts rightward and the short-run Phillips curve does not shiftD. the short-run Phillips curve shifts rightward and the long-run Phillips curve does not shift

The Phillips Curve is a concept in economics that describes an inverse relationship between rates of…

Answered: K If the natural unemployment rate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q1) It is highly likely that the projected retirement income based on the replacement ratio method may not be sufficient to pay for retirement expenses if inflation rates are _________ wage growth rates.
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are u sure about that in the nominal rate calculations we ignored inflation? it must be real rate ?
Consider the following information: Probability of Rate of Return If State of Economy State of Economy State Occurs Recession Normal Boom .20 .45 .35 Expected return Calculate the expected return. Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. -.14 .10 .36 %
The amount of goods and services each dollar buys at a given point in time is: Group of answer choices inflation None of the options consumer price index (CPI) purchasing power
Consider the following information: Rate of Return. If State Occurs State of Economy Recession Normal Boom Probability of State of Economy 24 45 .31 -.09 11 30 Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %
es Consider the following information: State of Economy Recession Boom Probability of State of Expected return Economy .28 72 Portfolio Return if State Occurs Calculate the expected return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) -.13 .23 %
The following payoffs are observed in frictionless markets: Dividend next period Price next period Price today Asset 1 4 84 80 Asset 2 5 105 P2 A. The rate of return on asset 2 equals 5%. B. In the absence of arbitrage opportunities, p2= 100. C. In the absence of arbitrage opportunities, the rate of return on asset 1 equals 8%. D. In the absence of arbitrage opportunities, p2= 110. E. None of the above.
Inflation is a general rise in market prices that affects all goods equally. OA. True OB. False
The following question illustrates the APT. Imagine that there are only two pervasive macroeconomic factors. Investments X, Y, and Z have the following sensitivities to these two factors: Investment b1 b2 X 1.75 0 Y −1.00 2.00 Z 2.00 1.00 We assume that the expected risk premium is 7.8% on factor 1 and 11.8% on factor 2. Treasury bills obviously offer zero risk premium. According to the APT, what is the risk premium on each of the three stocks? Suppose you buy $500 of X and $125 of Y and sell $375 of Z. What is the sensitivity of your portfolio to each of the two factors? What is the expected risk premium? Suppose you buy $200 of X and $150 of Y and sell $100 of Z. What is the sensitivity of your portfolio to each of the two factors? What is the expected risk premium? Finally, suppose you buy $400 of X and $50 of Y and sell $200 of Z. What is your portfolio's sensitivity now to each of the two factors? And what is the expected risk premium?
As inflation increases, the impact of the tilt effect is said to become even more burdensome on borrowers. Why is this so?
An increase in the interest rate will cause A an increase in planned investment and an increase in the equilibrium GDP B a decrease in planned investment and a decrease in the equilibrium GDP C an increase in planned investment and a decrease in the equilibrium GDP D. a decrease in planned investment and an increase in the equilibrium GDP

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