Suppose Ginger deposits $12,000 in cash into her checking account at the Bank of Skidoo. The Bank of Skidoo has no excess reserves and is subject to a 4 percent required reserve ratio.
Answer:
The question is incomplete since the requirements are missing, but I guess that it deals with the bank's ability to create money.
When you deposit money into a bank account, the bank will then lend most of that money to other clients. This is possible due to the money multiplier = 1 / required reserve rate = 1 / 4% = 25
the total increase in money supply = $12,000 x 25 = $300,000
The American Marketing Association Statement of Ethics identifies six key aspirational
ethical values, one of which is
Select one:
a. diversity.
b. integrity.
c. perseverance.
d. charity.
e. openness.
You are planning to do a restaurant business . There are different form of business Sole Trader/ Partnership/ Company. Which form of business is best for you and why? Justify your answer based on logic.
If you are planning to start a restaurant business, it is best to opt for a partnership business.
Since you are starting something new, it is always better to opt for a partnership where all the members are liable for any risks or losses that may arise. Each member can contribute their own skillsets to the business which will help the restaurant flourish. It will also help to increase the capital and resources of the business as there are multiple owners who will contribute in the working of the organisation.
If you are planning to start a restaurant business, it is best to opt for a partnership business.
Since you are starting something new, it is always better to opt for a partnership where all the members are liable for any risks or losses that may arise. Each member can contribute their own skillsets to the business which will help the restaurant flourish. It will also help to increase the capital and resources of the business as there are multiple owners who will contribute in the working of the organisation.
Question 7 of 10
Business health insurance plans are
A. required
B. varied
C. non-existent
D. uniform
so
The 2017 Annual Report of Tootsie Roll Industries contains the following information. (in millions) December 31, 2017 December 31, 2016 Total assets $930.9 $920.1 Total liabilities 197.1 208.6 Net sales 515.7 517.4 Net income 80.7 67.2 Compute the following ratios for Tootsie Roll for 2017. (a) Asset turnover (Round answer to 3 decimal places, e.g. 0.851 times.) enter the asset turnover rounded to 4 decimal places times (b) Return on assets (Round answer to 2 decimal places, e.g. 4.87%.) enter the return on assets in percentages rounded to 2 decimal places % (c) Profit margin on sales (Round answer to 2 decimal place
Answer:
a. 0.557 times
b. 8.72%
c. 0.16
Explanation:
a. Asset turnover = Net sales ÷ Average total assets
We will calculate the average total asset first
Average total asset = [Beginning total assets - ending total assets)] / 2
= [(930.9 + 920.1)] / 2
= 925.5
Asset turnover = 515.7/925.5
= 0.557 times
b. Return on assets = Net income/Average total assets
= 80.7/925.5
= 0.087196
= 0.087196 × 100
= 8.72%
c. Profit margin on sales = Net income/Net sales
= 80.7/515.7
= 0.16
Use the In the News to answer three questions
IN THE NEWS Treasury Prices Fall with Improved Expectations Expectations of accelerated economic growth continue to boost yields on Treasury securities. The price of the Treasury's 2.0 percent 10-year bond fell $17.43 yesterday, from $843.88 to $826.45. The decline in the price of the treasury pushed the yield up from 2.37 percent to 2.42 percent. The 30-year bond also declined, increasing the yield from 2.96 to 3.00. Source: Market reports of January 6, 2017, What would the yield be on the 2.0 percent, $1,000, 10-year Treasury bond if the market price of the bonds were Instructions: Round your responses to two decimal places.
a. $1,000?
b. $800?
c. $1,200?
Answer:
2%
2.5%
1.67%
Explanation:
The yield can be computed using the yield formula which coupon payment divided by price.
The coupon payment=face value*coupon rate
face value is $1000
coupon rate is 2%
coupon payment=2%*$1000=$20
when price is $1000:
yield =$20/$1000=2%
when price is $800
yield=$20/$800=2.5%
when price is $1,200
yield =$20/$1,200=1.67%
In essence ,the lower the price the higher the yield as lower amount is invested in order to receive the same amount of annual coupon of $20
A state has decided to create a public entity that will run the entirety of the states electrical grid and be the sole provider of electricity to its residents
The decision of a state to create a public entity to run its entire electrical grid and be the sole provider of electricity to its residents is a significant move in the energy sector.
This decision has the potential to have a significant impact on the availability, affordability, and reliability of electricity for the state's residents.A public entity may have several benefits over private entities in terms of managing the electrical grid. Public entities tend to be more accountable to the public and are focused on providing essential services rather than generating profits. This could result in a more affordable and stable electricity supply for residents.However, there may also be challenges associated with this decision. The public entity will have to invest heavily in the infrastructure required to provide electricity to all residents. Additionally, the entity will need to hire a large workforce to manage the electrical grid, which could result in increased costs and bureaucracy.
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a customer has invested 20000 in a variable annuity. in the first year nav increases to 21100 at what rate wsill 1100 gain be taxed
Answer: 0%
Explanation:
The $20,000 contribution to the variable annuity is not taxed and neither is the gain, at least not yet.
With the variable annuity, the gains/earnings will be tax-deferred and the customer will only have to pay taxes when they withdraw the contributions.
When this happens they will be charged at the normal income tax rate.
100 POINTS HELP PLEASE If you produce corn and soybeans, what percentage of your production is soybean when 25% of what you produce is corn?
A. 0%
C. 50%
B. 25%
D. 75%
Answer:
75%
Explanation:
If 25% of what you produce is corn, then the percentage of your production that is soybeans is 100% - 25% = 75%. This means that if you produce corn and soybeans, 75% of your production is soybean. Therefore, the answer is 75%.
Which of the following is true of a good benefits plan?
a. It is generally inexpensive to buy and administer.
b. It will stimulate higher performance levels.
c. It will encourage people to join an organization.
d. It will include redundancies in coverage.
e. It allows for smaller pay increases.
Answer:
C
Explanation:
The following is true of a good benefits plan it will encourage people to join an organization. The correct option is c.
What are the benefits of motivated employees?There are several benefits to having a motivated workforce, including lower absenteeism rates, employee retention rates, low staff turnover rates, improved management-worker relationships, higher worker performance, improved quality, and enhanced customer service.
A good benefits plan is an essential part of an organization's compensation strategy. It can be used to attract and retain talented employees and can be a competitive advantage in the job market. A well-designed benefits plan can also help to improve employee morale, motivation, and job satisfaction. While it may require a significant investment, a good benefits plan can provide a good return on investment for the organization.
Thus, the ideal selection is option c.
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Which of the following will increase supply of ice cream, a normal good?
A) An increase in the number of restaurants selling ice cream
B) An increase in the cost of milk, a key ingredient in ice cream
C) An increase in the price of cones used to serve ice cream
D) An increase in consumers’ income
E) A tax increase on ice cream distributors
When workers make fewer mistakes and do better work, it reduces
a. Management and waste
b. Waste and rework
c. Rework and Innovation
d. Innovation and Management
When workers make fewer mistakes and do better work, it reduces waste and rework. Thus, option B is correct.
What is rework?Rework is described as correcting of defective, rejected, or non-conforming items, during or after assessment, in Business Dictionary. All additional work, such as disassembly, repair, reassembly, substitution etc., is referred to as rework.
Repairing faulty systems results in lost time, more waste, and unexpected expenditures. Finding strategies to cut back on production rework results in lower costs, more efficient use of time, and generally higher-quality products.
Therefore, option B is correct, that the waste and rework are decreased when employees perform better and make fewer errors.
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By maintaining product relevance to the customer experience through constantly improving its products and services, Capitec is adopting a corporate growth strategy known as
By maintaining product relevance to the customer experience through constantly improving its products and services, Capitec is adopting a corporate growth strategy known as innovation.
What is innovation?
Innovation can be described as the process which involves the releasing or giving out of new thing into the market or the society which is different from things that have been done before.
It should be noted that this could be the things that is been modified from the existing things in the society and thye innovator is usually give alot of repect base on the thing they innovate in the society or company.
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Who are the Workers?
Answer: Workers are individuals who are employed to perform a specific job or task in exchange for wages or other forms of compensation.
Explanation: Workers can be found in a wide variety of industries and occupations, including manufacturing, construction, healthcare, education, government, and many others.
Workers may be full-time, part-time, temporary, or freelance, and they may work in various settings, such as offices, factories, stores, or online.
In general, workers are entitled to certain rights and protections under employment laws, including the right to fair wages, safe and healthy working conditions, and protection from discrimination and harassment. These rights and protections vary depending on the country and specific employment laws in place.
You sell accessories. A customer is delighted with an enormous pair of sparkly hoop earrings. She wants to know where it's appropriate to wear them. Based on traditional fashion rules, which of these recommendations should you make?
"Earrings like these work in any situation."
"These will make you memorable at your next job interview."
"Wear them to work so you'll feel great on a Monday morning!"
"They'd be perfect to wear to a nightclub."
"Earrings like these work in any situation." What recommendations ought you to offer. Customer testimonials and referrals are typically the foundation of the best marketing you can have.
When someone compliments your business, you make sales as a result. On average, a business receives 60 percent of its new customers from recommendations from its existing clientele. A customer is any person or organization that makes a purchase from another firm. Because they provide revenue, customers are essential to businesses because they would not exist otherwise. The use of customer testimonials for a particular business is a part of recommendation marketing
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Problem 1-19 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Todrick Company is a merchandiser that reported the following information based on 1,000 units sold: Sales $ 405,000 Beginning merchandise inventory $ 27,000 Purchases $ 270,000 Ending merchandise inventory $ 13,500 Fixed selling expense $ ? Fixed administrative expense $ 16,200 Variable selling expense $ 20,250 Variable administrative expense $ ? Contribution margin $ 81,000 Net operating income $ 24,300 Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?
Answer:
1. $24,300
2.$24,300
3. $405.00
4. $324.00
5.$81.00
6. Contribution format income statement
Explanation:
1. Preparation for the contribution format income statement
Todrick Company contribution format income statement
Sales $405,000
Less VARIABLE EXPENSES:
Cost of good sold ($283,500)
($27,000 + $270,000 - $13,500)
Selling expenses ($20,250)
Variable administrative expense ($20,250)
($405,000 - $283,500 - $81,000-$20,250)
Total $81,000
[$405,000-($283,500+$20,250+$20,250)]
CONTRIBUTION MARGIN:
FIXED EXPENSES:
Selling expenses $16,200
Fixed selling expense $40,500
($81,000-$24,300-$16,200)
Total $56,700
($40,500+$16,200)
NET OPERATING INCOME $24,300
($81,000-$56,700)
Therefore the Net operating income will be $24,300
2. Preparation of the traditional format income statement.
Todrick Company traditional format income statement
Sales $405,000
Less Cost of good sold ($283,500)
($27,000 + $270,000 - $13,500)
Gross margin $121,500
($405,000-$283,500)
Selling and Administrative expenses
Selling expenses $60,750
($40,500+$20,250)
Administrative expense $36,450
($20,250+$16,200)
Total $97,200
NET OPERATING INCOME $24,300
($121,500-$97,200)
Therefore the Net operating income will be $24,300
3. Calculation for the selling price per unit
Using this formula
Selling price per unit = Sales / Units sold
Let plug in the formula
Selling price per unit = $405,000 / 1,000
Selling price per unit = $405.00
Therefore the Selling price per unit will be $405.00
4. Calculation for the variable cost per unit.
Using this formula
Variable cost per unit = Variable expense / Units sold
Let plug in the formula
Variable cost per unit = ($283,500+$20,250+$20,250)/1,000
Variable cost per unit = $324,000 / 1,000
Variable cost per unit = $324.00
Therefore the Variable cost per unit will be $324.00
5. Calculation for the contribution margin per unit using this formula
Contribution Margin per unit = Selling price per unit - Variable cost per unit
Let plug in the formula
Contribution Margin per unit = $405.00 - $324.00
Contribution Margin per unit = $81.00
Therefore the Contribution Margin per unit will be $81.00
6. Based on the above calculation for both contribution format income statement and traditional format income statement the CONTRIBUTION FORMAT INCOME STATEMENT would be more useful to managers because it will enables them to effectively and efficiently estimate how net operating income will tend to change in responses to changes in unit sales.
The volatility of a non-dividend-paying stock whose price is $78, is 30%. The risk-free rate is 3% per annum (continuously compounded) for all maturities. Calculate values for u, d, and p when a two-month time step is used. What is the value of a four-month European call option with a strike price of $80 given by a two-step binomial tree. Suppose a trader sells 1,000 options (10 contracts). What position in the stock is necessary to hedge the traders position at the time of the trade
Purchasing 500.00 shares of the non dividend paying stock is necessary to hedge the traders position at the time of the trade
What is Stock hedging?Stock hedging means the act of buying investment which are designed to reduce the loss risk from another investment.
T = 4 months = 4/12 = 1/3 year
n = 2
t = T/n = 2/2 = 2 months = 2/12 = 1/6 years
u = 1.1303
d = 1/u = 1/1.1303 = 0.8847
p = (ert - d) / (u - d)
p = (e^3% x 1/6 - 0.8847) / (1.1303 - 0.8847)
p = 48.98%
Su = S0 x u
Su = 78 x 1.1303
Su = 88.16
Sd = S0 x d
Sd = 78 x 0.8847
Sd = 69.01
Suu = u x Su
Suu = 1.1303 x 88.16
Suu = 99.65
Sud = Su x d
Sud = u x Sd
Sud = 78
Sdd = d x Sd
Sdd = 61.05
Cuu = max (Suu - K, 0)
Cuu = max (99.65 - 80, 0)
Cuu = 19.65
Cud = max (Sud - K, 0)
Cud = max (78 - 80, 0)
Cud = 0
Cdd = max (Sdd - K, 0)
Cdd = max (671.05 - 80, 0)
Cdd = 0
Cu = [p x Cuu + (1 - p) x Cud]e-rt
Cu = [48.98% x 19.65 + (1 - 48.98%) x 0]e-3% x 1/6
Cu = 9.58
Cd = [p x Cud + (1 - p) x Cdd]e-rt
Cd = 0
Value of a four-month European call option = [p x Cu + (1 - p) x Cd]e-rt = [48.98% x 9.58 + (1 - 48.98%) x 0]e^-3% x 1/6
Value of a four-month European call option = 4.67
Since the trader has sold call options, he need to buy:
= (Cu - Cd) / (Su - Sd) * N
= (9.58 - 0) / (88.16 - 69.01) * 1,000
= 500.00 shares.
In conclusion, purchasing 500.00 shares of the non dividend paying stock is necessary to hedge the traders position at the time of the trade.
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Paano
maisaalang-
alang ang etika
sa pagbuo ng
teknikal-
bokasyunal na
paunawa/babala/
anunsiyo?
Answer:
ewan
Explanation:
ewan ko lng
hope it help joke
Delicious Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,500 May 5: Received and paid electricity bill, $190 May 9: Received cash for meals served to customers, $2,400 May 14: Paid cash for kitchen equipment, $2,500 May 23: Served a banquet on account, $2,000 May 31: Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,700 May 31: Recorded depreciation for May on kitchen equipment, $340
Question Completion:
If Delicious Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.
Answer:
Delicious Catering
Using the Accrual method, Delicious Catering would have recorded for the month a net income of $1,670.
Explanation:
Data and Calculations:
Prepaid Rent for 3 months = $1,500
Rent expense for the month = $500 ($1,500/3)
Utilities expense = $190
Service Revenue:
Cash for meals = $2,400
Credit 2,000
Total $4,400
Salary Expense = !,700
Depreciation expense = $340
Kitchen Equipment = $2,500
Income Statement for the month of May:
Service Revenue $4,400
Expenses:
Rent $500
Utilities expense 190
Salary expense 1,700
Depreciation expense 340
Total expenses $2,730
Net Income $1,670
Zhao Co. has fixed costs of $429,000. Its single product sells for $187 per unit, and variable costs are $122 per unit. If the company
expects sales of 10,000 units, compute its margin of safety in dollars and as a percent of expected sales.
Dollars
Percent
Margin of safety
Answer:
$635,000 and : 34%
Explanation:
Margins of safety is the difference between expected sales and the break-even point.
For Zhao, expected sales are 10,000 units
The break-even points in units = fixed cost/ contribution margin per unit
fixed costs = $429,000
Contribution margin per unit = selling price - variable costs per unit
=$187 - $122
=$65
break-even point in units = $429,000/$65
break-even point = 6600 units
Margin of safety = 10,000 - 6600 units
=3400 units
In dollars is equal to margin of safety in units x selling price
=3400 x 187
=$635,000
as a percent of expected sales.
=3400/10000 x 100
=0.34 x 10,000
=34%
The following details relate to the main process of W Limited, a chemical manufacturer: Opening work in progress ............2000 litres, fully complete as to materials and 40% complete as to conversion Material input ................................24 000 litres Normal losses are 10% of input (24 000 litres) and are detected at the end of the process Output to process 2 ......................19 500 litres Closing work in progress ..............3000 litres, fully complete as to materials and 45% complete as to conversion The number of equivalent units to be included in W Limited’s calculation of the cost per equivalent unit using a FIFO basis of valuation are: Materials Conversion 19400 18950 20500 20050 21600 21150 23600 20750 23600 21950
Answer:
domain is very talk to fulfill their very great fun nice occasionally maintenance method question complaint as to concession the number of incidents when I was limited to age 18 19 events
Assessment
Which of the following is an example of investing in yourself?
A. Taking the time to learn how to create a budget.
B. Investing your money in the stock market.
C. Planning out your financial goals.
D. Signing up for an online class.
10/10
Answer:
A
Explanation:
The reason is because you can learn new techniques on money saving and budgeting.
• TWO interpersonal skills selected from Addendum A, are listed and linked to examples/evidence from the background information.
Answer:
Here are some examples of interpersonal skills or social skills:
Active listening.
Being able to understand and empathize with others.
Managing conflict.
Building lasting relationships.
Teamwork.
Motivating others.
Leadership.
Negotiation and persuasion.
Explanation:
design an approach that your team would recommend for Joseph and Nicholas to cover one area each that you deem necessary to aid in the planning and controlling functions
The combines strategic planning, performance measurement, effective communication, and continuous improvement to support Joseph and Nicholas in their planning and controlling functions. It ensures a well-defined direction, data-driven decision-making, collaboration, and a focus on growth and adaptability.
In order to aid in the planning and controlling functions, the following approach can be recommended to Joseph and Nicholas:
1. Establish Clear Objectives and Goals: The first step in planning is to establish clear objectives and goals for the team. It is important to have a clear understanding of what needs to be accomplished and what the team's priorities are.
2. Assign Responsibilities: Assigning specific responsibilities to team members helps to ensure that everyone is working towards a common goal. Joseph and Nicholas should each be assigned to cover one area that is necessary for planning and controlling functions. This will help to ensure that all aspects of the project are covered and that there is no overlap or duplication of efforts.
3. Develop a Schedule: Developing a schedule that outlines the key milestones and deadlines for the project is essential to effective planning and control. This will help to ensure that the project stays on track and that deadlines are met.
4. Monitor Progress: Regularly monitoring progress against the schedule and objectives is necessary to ensure that the project is progressing as planned. This will help to identify any issues or problems that arise and allow for corrective action to be taken.
5. Communicate: Effective communication is critical to the success of any project. Joseph and Nicholas should establish a regular communication schedule to ensure that everyone is up-to-date on the project's progress, any issues or problems that arise, and any changes to the schedule or objectives.
6. Make Adjustments: Finally, it is important to be flexible and make adjustments as needed. If the project is not progressing as planned, adjustments may be necessary to the schedule or objectives to ensure that the project stays on track and that goals are met.
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What are security guards?
Answer: People that protect a building,store, any place from any dangerous activity or people.
Explanation:
Correll Company, which operates a mail-order clothing business, is physically located in State L. This year, the firm shipped $18 million of merchandise to customers in State R. State R imposes a 6 percent sales and use tax on the purchase and consumption of retail goods within the state.
Required:
a. Do State R residents who purchased Firm L merchandise owe use tax on their purchases?
b. If State R could legally require Firm L to collect a 6 percent tax on mail-order sales made to residents of the state, how much additional revenue would the state collect? Explain the reasoning behind your answer.
Answer:
Correll Company
a. Yes State R residents who purchased Firm L (out-of-state) merchandise owe use tax on their purchases.
b. State R would collect $1,080,000 additional revenue ($18 million * 6%) if Correll was required to collect the use tax at the point of sale and then remit the tax collected to State R.
Explanation:
a) Data and Calculations:
Cost of merchandise to customers in State R = $18 million
State R's sales and use tax on the purchase and consumption of retail goods within the state = 6%
Amount that Correll could collect for State R = $1,080,000 ($18 million * 6%)
b) Note that Correll (Firm L) collecting the State R use tax does not affect State R residents' legal liability to pay the use tax. Unfortunately, not many people actually remit their self-assessed use tax.
explain the changing nature of public administration
The nature of public administration has undergone significant changes over the years. Traditional public administration was characterized by hierarchical structures.
However, with the increasing complexity of modern society, new challenges have emerged that require a more flexible and responsive approach to public administration.
One of the key changes in public administration has been the shift towards more participatory and collaborative approaches. This has been driven by a growing recognition of the importance of engaging citizens and stakeholders in decision-making processes, and the need to build trust and legitimacy in government institutions.
Another important change has been the adoption of technology in public administration. From e-government initiatives to data-driven decision-making, technology has transformed the way that government organizations operate and interact with citizens.
At the same time, there has been a growing emphasis on performance management and accountability in public administration. This has involved the development of performance metrics, the use of benchmarking and evaluation, and a focus on outcomes rather than inputs.
Overall, the changing nature of public administration reflects the broader shifts in society towards greater complexity, interdependence, and accountability. While there are still many challenges to be addressed, the evolution of public administration offers hope for more effective and responsive governance in the years to come.
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Use the following information to determine which supplier is more cost-effective using total cost analysis.
Note: Late delivery of components would cause 50% lost sales and 50% back orders of finished goods.
Note that there are 365 days in a year and that 2000 pounds equal one ton per mile.
Using supplier 1 will result in a $34,000 savings.
Cost analysis: What is it?
Cost analysis is a useful tool for improving project management and forecasting future financial success for a business. Cost analysis is a tool used by financial experts to determine how much revenue a project can generate in relation to its overall costs. It may be useful to learn more about cost analysis and how to calculate it if you work in finance or project management.
This article covers cost analysis, why it's crucial, seven steps you can use to calculate it, and a cost analysis calculation example.
The process of figuring out the costs and benefits is called cost analysis, also known as cost-benefit
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Solve for the unknown number of years in each of the following (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
Present Value Years Interest Rate Future Value
$600 8% $1,393
850 12 2,330
18,800 18 367,247
21,900 14 382,983
Answer:1)10.94years , 2.) 8.90 years 3) 17.96years 4) 21.84years
Explanation:
Using the formula
FV = PV (1 + r)ⁿ
where
PV=present value
r=interest rate
n =number of periods
FV = future value.
Present Value Years Interest Rate Future Value
$600 ? 8% $1,393
850 ? 12 2,330
18,800 ? 18 367,247
21,900 ? 14 382,983
Using FV = PV (1 + r)ⁿ, The number of years can be calculated
FV/PV = (1 + r)ⁿ
FV/PV/ 1+r = eⁿ
In FV/PV / In ( 1+ r) = n
1)
n ( Number of years )=In FV/PV / In ( 1+ r)
=In ( 1,393/600) / In ( 1+ 0.08)
0.84228/0.07696
=10.94years
2.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In (2330/850) / In ( 1+ 0.12)
1.00837625/0.113328685
=8.90 years
3.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In (367,247/ 18,800) / In ( 1+ 0.18)
2.97217778/0.165514438
=17.96years
4.
n ( Number of years )=In FV/PV / In ( 1+ r)
=In ( 382,983/ 21,900) / In ( 1+ 0.14)
2.86150396/0.131028262
=21.84 years
Suppose the CPI was 110 last year and is 121 this year.
Instructions: In part a, enter your answer as a whole number. In part b, round your answer to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.
a. What is this year’s inflation rate?
____ %
b. In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year’s inflation rate?
____ %
c. What term do economists use to describe this second outcome?
Inflation or Deflation
The inflation rate is 10%, which can be computed the second answer is -1.8%. third outcome called deflation.
How to calculate CPI?a) The formula to CPI is
\(CPI= \frac{current CPI-past CPI}{past CPI}\)
\(CPI= \frac{121-110}{110}\)
CPI= 0.1 or 10%
b) \(CPI= \frac{current CPI-past CPI}{past CPI}\)
\(CPI= \frac{108-110}{110}\)
CPI= -0.18%
A decrease in the economy's overall price level is referred to as deflation, whereas a temporary slowdown in price inflation is known as disinflation. A decrease in the money supply, reductions in government and consumer expenditure, and reductions in corporate investment can all contribute to deflation, which is bad for an economy.
A progressive drop in consumer prices for products and services is known as price deflation. This is frequently brought on by the deflationary gap, also referred to as the demand gap, which is characterized by high supply and low demand. Consumers and businesses hold on to their money rather than spending it because they anticipate a decrease in pricing.
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