Answer:
net income of $3,850
Explanation:
May's income = $25,000
May can deduct 75% of her total expenses since she uses one apartment and rents the other 3.
Total expenses = $8,200 + $9,000 + $3,000 + $2,000 + $1,000 + $5,000 = $28,200
May's deductions = $28,200 x 75% = $21,150
May's net income = $25,000 - $21,150 = $3,850
Because BSB is cutting back on its loans, other banks will find they have too reserves, causing them to their loans.
BSB may find it difficult to cut back on its loans immediately because it cannot force people to pay off loans.
Which of the following ways represent an alternative for BSB to return to its original reserve ratio? Check all that apply.
A) Lend money
B) Attract additional deposits
C) Borrow money from another bank
D) Borrow money from the Fed
Answer:
The correct answers are
A) Attract additional deposits - this deposits can be used to increase the reserves
B) Borrow money from another bank - BSB will have to pay interest, but these money can be used to increase the reserves.
C) Borrow money from the FED - cheaper than borrowing from another bank, the same logic applies: it can use the money borrowed to increase its amount of reserves
Final answer:
BSB can return to its original reserve ratio by attracting additional deposits, or borrowing from other banks or the Federal Reserve. These methods directly increase reserves or temporarily cover shortages, ensuring stability and depositor confidence.
Explanation:
To address the situation wherein BSB is cutting back on its loans, there are several strategies it can employ to return to its original reserve ratio. Attracting additional deposits, borrowing money from another bank, and borrowing money from the Federal Reserve are practical alternatives. Attracting more deposits can increase the bank's reserves directly. Borrowing from another bank or the Fed can temporarily cover the reserve shortage. Option C
When BSB cuts back on its loans, it is likely attempting to increase its reserves to meet reserve requirements or to reduce risk in tough economic times. Selling loans in the secondary market might also be considered, allowing the bank to turn loans back into liquid assets that can strengthen its reserve position. Banks hold some deposits as reserves to ensure depositor confidence and meet withdrawal demands, thus maintaining a stable bank operation.
Suppose a country that had balanced trade began to run a trade deficit. At the same time, consumption as a share of GDP increased but the investment share did not. Do you think there was an increase in capital deepening?
A. Yes, because the trade deficit can be used to purchase more capital.
B. Yes, because investment must have fueled the trade deficit.
C. No, because the country initially had balanced trade.
D. No, because consumption, not investment, has fueled the trade deficit
Answer:
D. No, because consumption, not investment, has fueled the trade deficit
Explanation:
Capital deepening requires an increase in the amount of capital in proportion to labor. To increase the amount of capital, investments are required.
In this example, investment as a percentage of GDP has not increased, while consumption has, but consumption does not directly increase capital.
Steve owns a bike shop. He wants to increase the number of bikes he sells each week, and he wants to use a technological advance to do so. ________ would represent a technological advance at his bike shop. A. Increasing his inventory of helmets and accessories that he sells B. Increasing the number of bikes he holds in inventory C. Utilizing an online ordering system that allows him to sell bikes across the country D. Better training for his staff Increasing the number of employees
Answer:
C. Utilizing an online ordering system that allows him to sell bikes across the country
Explanation:
It is only through using an online ordering system that sales of the bikes can increase.
Also, using an online ordering system represents a form of technological advance.
UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 6% and the market risk premium is 9%. What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?
Answer:
16.62%
Explanation:
First, use CAPM to find the expected return of each stock;
r= risk free + beta (market risk premium)
UPS;
r = 0.06 +(1.6*0.09)
r = 0.204 or 20.4%
Walmart;
r = 0.06 + (0.9*0.09)
r = 0.141 or 14.1%
Next find the return of portfolio;
Let UPS be represented by U and Wal-Mart by W
rP = wU*rU + wW*rW
P= portfolio
w= weight of...
r = return of....
rP = (0.40*0.204) + (0.60 * 0.141)
rP = 0.0816 + 0.0846
rP = 0.1662 or 16.62%
Therefore, the expected return on a portfolio is 16.62%
The public relations activity that involves enhancement of communication between investor-owned companies and their shareholders, the financial community (for example, banks, annuity groups, and investment firms), and the public is known as:_______
Answer:
financial public relations
Explanation:
Financial public relations -
It helps to build the financial reputation of the company .
The focus is to transmit the truthful and transparent culture of the organisation , it achieves the high degree of the credibility with the society .
hence , from the question ,
The correct term for the given statement is financial public relations .
You have a goal of having $270,000 four years from today. The return on the investment is expected to be 8% and will be compounded semi-annually. The amount that needs to be invested today is closest to: (FV of $1,PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
A) $180,000.
B) $197,989.
C) $135,000.
D) $197,289.
Answer:D $197,289
Explanation:
Compounding a present value for a future sum is calculated thus:
FV= PV(1+r/n)^nt
FV= $270,000
Rate= 8%
Time= 4yrs
Compounded semi annually
$270,000= PV(1+0.08/2)^2*4
270,000=PV(1.04)^8
270,000=PV(1.368569050405)
270,000/1.3685690504052736
PV= 197,289
Katsiaryna is a middle manager in a large company. She was just passed over for promotion and could not understand why. On a scale from 0 to 100, her overall performance score over the last three years has been 89. In her company, the performance appraisal system defines outstanding performance at 90 or above, very good at 80 or above, good at 70 or above, average at 60 or above, and unacceptable as anything below 60. Katsiaryna found out that the average score for middle managers in her company is 91. What is the major appraisal problem in this case?
a) Inappropriate substitutes for performanceb) Inflationary pressuresc) Central tendency errord) Halo errore) Similarity error
Answer:
B) Inflationary pressures
Explanation:
When HR evaluate the employees' performance they might have a tendency to be "nice" with the employees and be less rigorous with the evaluations. Many times the negative factors will be downweighted and the evaluations will be upgraded. The problem with this nice person approach is that a lot of people will get very high evaluations and comparing them may lead to problems. For example, if everyone is considered a good or excellent employee, how do you know who will be promoted or who can be fired.
Suppose that a country has no public debt in year 1 but experiences a budget deficit of $20 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5.
1. What is the absolute size of its public debt in year 5? $Billion?2. If its real GDP in year 5 is $104 billion, what is this country
Answer:
1) this country's public debt = $42 billion
2) incomplete question
Explanation:
A budget deficit is the difference between a country's income and its expenditures, a deficit occurs when expenditures are larger than revenues. The public debt would be the accumulation of all the country's budget deficits or surpluses.
public debt = -$20 - $30 + $10 - $2 = -$42 billion
During an ice hockey game, Claude silently skates up to Gordie from behind and hits him over the head with his stick. Claude is promptly thrown out of the game and suspended by the league. Gordie is not injured because he is wearing a helmet. If Gordie sues Claude, Claude would be guilty of__________.
Answer:
battery
Explanation:
Based on the information provided within the question it can be said that If Gordie sues Claude, Claude would be guilty of battery. In the context of criminal behavior, Battery refers to the crime of being aggressive and making contact with another person, with or without his or her consent. It is a type of assault charge but the person must have made physical contact with the victim.
Peachtree Company borrows $30,000 from the local bank at 7% interest. The term of the note is five years, and the annual payments remain constant at $7,317. Determine the interest expense Peachtree Company should record in the second year.
a. $1,735
b. $2,100
c. $7,317
d. $5,217
Answer:
a. $1,735
Explanation:
Year 1;
$30,000 is the loan amount borrowed(Principal) which means that it is the beginning balance.
If payment per year = $7,317,
Portion of PMT that goes towards Interest expense = 7%*30,000 = $2,100
Portion of PMT that goes towards Principal payment = $7,317 - $2,100 = $5,217
Ending balance yr 1 = $30,000 - $5,217 = $24,783
Year 2;
Beginning balance = $24,783
Payment per year = $7,317
Portion of PMT that goes towards Interest expense = 7% *$24,783 = $1,734.81
Therefore, interest expense that Peachtree Company should record in the second year is $1,735
Suppose consumer income increases. If grass seed is a normal good, the equilibrium price of grass seed will a. decrease, and producer surplus in the industry will decrease. b. increase, and producer surplus in the industry will increase. c. decrease, and producer surplus in the industry will increase. d. increase, and producer surplus in the industry will decrease.
Answer:
b. increase, and producer surplus in the industry will increase
Explanation:
A normal good is a good whose demand increases as income increases.
If grass seed is a normal good, when income rises, demand increases and the demand curve shifts to the right. This would lead to an increase of demand over supply which would lead to a rise in price.
The rise in price increases producers surplus.
Producers surplus is the least price a producer is willing to sell a product and the actual price the product is sold. If price rises, producer surplus increases.
Final answer:
When consumer income increases, the demand for normal goods also increases. In the case of grass seed, this results in an increase in the equilibrium price and producer surplus in the industry.
Explanation:
When consumer income increases, the demand for normal goods also increases. Grass seed is a normal good, so an increase in consumer income will cause an increase in the demand for grass seed. As a result, the equilibrium price of grass seed will increase, and producer surplus in the industry will increase as well. This is because higher demand will lead to higher prices and more sales, allowing producers to earn greater profits.
A monopoly is most likely to emerge in a market when
Answer: there is only one producer of a commodity
Explanation: In simple words, monopoly refers to a market structure in which there is only one participant in the market who is making available the commodity to the customers.
Monopoly can arise from a number of factors such as patents rights, new invention etc. Sometimes the govt. of a country finds it suitable to handle a particular industry for the national benefit such as defense.
Although monopolist is the single producer but still he or she cannot charge any price as the rule of price and demand is applies to monopoly also.
Trilane Systems is a small business. Its owner, Myra, is also its only employee. She handles the business's operations herself and is responsible for all of the business's income and losses. In the context of the legal forms of business, Trilane Systems is aA. Subchapter S Corporation.B. limited liability partnership.C. general partnership.D. sole proprietorship.
Answer: Option D
Explanation: In simple words, sole proprietorship refers to the business forms under which a single individuals operates the business and is personally liable for the debts of the firm as it will not be considered as a separate legal entity.
These businessmen usually operate in a small level with very little capital. Such structure is considered to be the easiest among all other structures.
In the given case, Myra is the owner as well as only employee of the organisation, hence we can conclude that she is operating a sole proprietorship.
Trilane Systems, run only by its owner Myra, is a sole proprietorship, where she is liable for all business activities and finances.
In the context of the legal forms of business, Trilane Systems, managed solely by Myra, where she is responsible for all operations, income, and losses, is best classified as a sole proprietorship. This form of business organization is characterized by a single owner who is personally liable for the business's debts and entitlements to all profits. Unlike a partnership or a corporation, a sole proprietorship does not have a separate legal entity distinct from its owner, and any business or personal assets may be at risk to cover debts.
Clancy sells shares in Darling Pool & Spa Company to Eton. Clancy does not deliver the actual possession of the shares to Eton, but gives him the key to a safety-deposit box in First State Bank in which the stock certificates are locked. Presenting the key is_________.a. real delivery.b. constructive delivery.c. delivery by agent .d. no delivery.
Answer: constructive delivery
Explanation: In simple words, constructive delivery refers to the actions when one individual transfers the tile to other by operation of law when the actual delivery is not possible in the situation.
Such deliveries are a concern for the jury and are usually constituted by them as one needs a third party to study in detail the facts and law relating to the transfer.
Thus, from the above we can conclude that the correct option is B .
Contractors Service, Inc., enters into a contract to build a restaurant for Dierdre’s Soup Spoons Bistro with Dierdre’s payment due on August 1. On August 1, her bank is closed, and for this reason, she claims that she cannot pay on time. In this situation:
a. Dierdre is in breach of contract.
b. Dierdre’s bank is liable to Contractors Service.
c. the contract is suspended.
d. the contract is discharged.
Answer:
a. Dierdre is in breach of contract.
Explanation:
Breach refers to not filling the duty as mentioned in the contract and then legally not following the contract.
When a contract is made, then there is bound to complete the act contracted, by both the parties,
This is because the contract binds both the parties.
Here, in the given instance Contractors Service Inc. is bound to build the restaurant for Dierdre's Soup Spoon Bistro.
In return the contract binds Dierdre's Soup spoon Bistro to make payment on 1 August.
Thus, in case if the bank is closed on 1 August, the payment shall have been made on 31 July.
Or in case there is some clause inserted in the contract allowing payment some other day in case of banks not working on the contract date.
Thus, this is breach of contract.
Since it did not completed its duties.
Every time Tim goes to bat in his baseball game, he rubs the charm on the necklace that his professional baseball player uncle gave him. This charm has never failed to help him get a good hit. The charm has become part of Tim's extended self .
A. True.
B. False
Answer:
The correct answer is True.
Explanation:
The notion of the Extended Self includes what I am and what is mine, this second aspect implies that we feel some control over the objects we possess or with which we relate; Within both categories we could then include body parts, pets, other people (such as our parents or friends), property, money, ideas, values, beliefs, objects, elements of our environment, among others.
Both tariffs and quotas tend to – social welfare. That is, they increase – for domestic consumers and decrease – of the restricted good. In some cases, such as the U.S. shoe market, tariffs on cheap goods hurt – consumers the most, making the tariff an example of a regressive tax.
Answer:
The correct answer is: reduce; price; supply; poor.
Explanation:
A tariff is a tax imposed on the import of goods and services from another country. A quota is a quantitative restriction on the imports.
Both tariff and quotas decreases the supply of imported products. This causes their price to increase. This increase in price reduces the consumer surplus for the domestic consumers.
In some cases where tariff is imposed on cheap goods that are consumed mostly by the poor consumers hurt them the most. Tariff in such situations become an example of regressive tax.
If total current assets are $140,000 at the end of Year 1, increase by $50,000 by the end of Year 2, and increase by $50,000 in Year 3, the percentage increase over the preceding year is less in Year 3 than in Year 2.
Answer:
True
Explanation:
As the assets increase by $50,000 in year 2 on the basis of $140,000
The percentage increase = $50,000/$140,000 = 35.71%
In the year 3, the basis will be $140,000 + $50,000 (increase in year 2) = $190,000
Thus, in the year 3 the percentage increase in assets = $50,000/$190,000 = 26.32%
This clearly shows that the percentage increase is more in Year 2 than year 3, because the increase value is same but the basis has increased for Year 3, which is in denominator.
All of the following are benefits of new product development to a firm except:
a. reducing the costs of production
b. satisfying the changing needs of current and new customers
c. avoiding market saturation from products that have been on the market for a long time
d. creating diversification and reducing risk
e. keeping up in a market with short product life cycles where sales come mostly from new products
Answer: Reducing the cost of production.
Explanation:
Creating a new product by a company have several benefits such as helping the company to diversify, satisfying the changing needs of customers, shifting away from an already over produced item in the market.
Creating a new product does not ensure a reduction in cost of production. This is so because some products cost more to produce than others.
All of the listed options are benefits of new product development to a firm. Thus, (a, b, c, d, and e) are correct options.
Explanation:All of the listed options are benefits of new product development to a firm. Let's go through each option:
Reducing the costs of production: Developing new products can lead to more efficient production processes and cost savings.Satisfying the changing needs of current and new customers: By introducing new products, firms can meet the evolving demands of their existing customer base and attract new customers.Avoiding market saturation from products that have been on the market for a long time: Continuously developing new products can help firms stay competitive and prevent their offerings from becoming outdated.Creating diversification and reducing risk: Introducing new products allows firms to diversify their product portfolio, reducing the reliance on a single product or market.Keeping up in a market with short product life cycles where sales come mostly from new products: Developing new products is crucial in industries with rapid product turnover, where sales heavily depend on fresh offerings.In summary, all the options mentioned (a, b, c, d, and e) are indeed benefits of new product development to a firm.
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Suppose you deposit $125 into an account at the end of every month. If the account earns 6% interest, compounded monthly, how long (in years) will it take for the value of the account to reach $8000? Round your answer to two decimal places.
Answer:
t = 69.4879 years ≈ 69 years 5 months and 27 days
Explanation:
A = P × [tex](1+\frac{r}{n})^{nt}[/tex]
Here,
A = total amount = $8,000
P = principal or amount of money deposited = $125
r = annual interest rate = 6%
n = number of times compounded per year = monthly i.e 12
t = time in years
thus,
$8,000 = $125 × [tex](1.005)^{12t}[/tex]
or
[tex](1.005)^{12t}[/tex] = 64
taking natural log both the sides, we get
[tex]\ln((1.005)^{12t})[/tex] = ln(64)
or
12t × ln(1.005) = ln(64)
or
12t = [tex]\frac{\ln(64)}{\ln(1.005)}[/tex]
or
12t = 833.85433
or
t = 69.4879 years ≈ 69 years 5 months and 27 days
In the 1950s, imports and exports of goods and services constituted roughly 4% to 5% of U.S. GDP. In recent years, exports have accounted for approximately 12% of GDP, while imports have more than tripled to over 15% of GDP. Which of the following helps to explain the increase in international trade and finance since the 1950s?Check all that apply.
a) An increasing number of import quotas
b) Better high-speed rail lines
c) Improvements in telecommunications
d) International trade agreements such as the General Agreement on Tariffs and Trade (GATT)
Answer:
a) An increasing number of import quotas
b) Better high-speed rail lines
c) Improvements in telecommunications
d) International trade agreements such as the General Agreement on Tariffs and Trade (GATT)
Explanation:
All of the above applies as in order to increase the international trade.
As with the increase in quotas there is a pressure to increase the imports. Further when there is easy chain of supply even in the international market that is railway facility is smooth and that the telecommunications is also easy.
Further, with increased trade agreements there is provision of reduced tariffs and taxes and accordingly the international exchange is not complicated and is rather smooth.
Final answer:
The rise in U.S. international trade can be attributed to technological advancements in telecommunications and the implementation of trade agreements like GATT, which reduced trade barriers and facilitated global economic integration.
Explanation:
The increase in international trade and finance since the 1950s can be explained by various factors. Improvements in telecommunications have drastically enhanced the speed and efficiency of communication globally, facilitating international transactions and operations. International trade agreements such as the General Agreement on Tariffs and Trade (GATT) have significantly lowered trade barriers, making it easier and more attractive for countries to engage in cross-border trade.
However, increased import quotas, which are limits set on the volume of imports, would generally reduce the level of trade, not increase it. Moreover, while better high-speed rail lines may have a positive impact on trade within certain regions, particularly in Europe and Asia, their effect on the global scale of U.S. exports and imports may be less significant when compared to advancements in maritime and air transport which have a greater global reach.
Flexible exchange rates and responses to changes in foreign macroeconomic policy. Suppose there is an expansionary fiscal policy in the foreign country that increases Y*, and at the same time the foreign central bank raises i* .
(a) In an IS-LM-IP diagram (IP for the interest parity relation), show the effects of the increase in foreign output Y* and the increase in the foreign interest rate i* , on domestic domestic output Y and the exchange rate (E), when the domestic central bank leaves the policy interest rate unchanged. Briefly explain in words.
(b) In an IS-LM-IP diagram, show the effects of the increase in Y* and the increase in i* on the domestic output (Y ) and the exchange rate (E), when the domestic central bank matches the increase in the foreign interest rate with an equal increase in the do-mestic interest rate. Briefly explain in words
(c) In an IS-LM-IP diagram, show the required domestic monetary policy following the increase in Y* and the increase in i* , if the goal of domestic monetary policy is to leave domestic output Y unchanged. Briefly explain in words. When might such a policy be necessary?
Answer:
The answer is letter C.
Explanation:
In an IS-LM-IP diagram, show the required domestic monetary policy following the increase in Y* and the increase in i* , if the goal of domestic monetary policy is to leave domestic output Y unchanged. Briefly explain in words. When might such a policy be necessary?
IS-LM-BP-Model was formulated by Mundell and Fleming. They were both economists and they created two kinds of analysis in the IS-LM-BP model according to the exchange rate regimes fixed or flexible. Point above/ below the BP curve is trade surplus/ deficit.
Foreign central bank rases i, interest rate differential reduces, exchange rate depreciates, trade balance improves, IS shifts rightwards, point above BP curve, so ,income rises because of expansionary fiscal policy also, excess demand for money , interest rate, rises, investiment decreases, income decreases.
According to the crowding-out effect, if the federal government increases spending, the demand for money and the equilibrium interest rate will ___________, which will cause consumption, investment, and net exports to ___________.
a. increase; decrease
b. decrease; increase
c. decrease; decrease
d. increase; increase
Answer:
a. increase; decrease
Explanation:
The crowding-out effect is one where public spending intended to increase spending in the economy (ie. aggregate demand, and thus stimulate the economy) results in less private spending, causing aggregate demand to increase less than the increase in public spending.
The reason is because as government spend they have to use money. That will raise demand for money, causing the its price (interest rate) to increase. Because money becomes more valuable (people have to forgo higher interest rate to spend their money or pay higher rate to borrow) there will be less spending on consumption and investment. Higher interest rate also causes net exports to decrease (more imports less exports).
Cindy decides to gift her brother, Bob, with a small cottage that she owns on a piece of property adjacent to her main summer home. To transfer her interest in the house to Bob, Cindy signs a ________.
Answer:
Quitclaim deed
Explanation:
A quitclaim deed is a legitimate apparatus that is utilised to transfer interest for genuine property. The element moving its advantage is known as the grantor, and when the quitclaim deed is appropriately finished and executed, it moves any concern the grantor has in the property to a beneficiary, called the grantee. There are three sorts of land deeds: (1) the general guarantee deed, (2) the unique guarantee deed, and (3) the quitclaim deed
"Competitive advantage of nations" is a phrase coined by Joseph Stiglitz, identifying a nation as having a cluster of similar producers which gives the nation a special advantage over other countries.
True / False.
Answer:
False
Explanation:
The authors who first mentioned this concept were the classics, Adam Smith and David Ricardo especially, and it was David Ricardo the first economist in developing a whole theory about international trading and competitive and comparative advantages among nations, recently Michael Porter has developed a similar theory called the Porter's diamond in which he determines the factors that make countries more competitive and through which they achieve business success, he wrote a book called "the competitive advantage of nations".
Alma is interested in receiving income to help save money for her grandson’s college education. She is considering investing in the stock of a fast-growing technology company that is promising a rather high dividend rate to shareholders. One thing it will be helpful for Alma to remember is_______.
A. that dividends are always based on the prevailing market price of the stock.
B. the dividend rate of a company cannot be changed once it is set.
C. fast-growing companies are rather secure investments to purchase.
D. the company does not have a legal obligation to pay dividends when promised.
Answer:
D. the company does not have a legal obligation to pay dividends when promised.
Explanation:
Dividends are share of income distributed by the company to shareholders when the company performs good, and earns profit.
But since it is a distribution of income and not a mandatory payment, there might be chances that company do not pay dividends, and might retain the income earned for future growth prospects.
Thus, in order to earn money fast although the company promises to make dividend payments, but it shall be taken care, that the company will necessarily pay dividends.
Jenna’s supervisor was lamenting the fact that their company could not simultaneously meet the needs of their existing customer base (primarily consumers over the age of forty) and make inroads to the growing youth market. Jenna, on the other hand, came up with a plan for doing both, an example of
Answer:
the S-T-P approach (market segmentation)
Explanation:
Segmenting, targeting, positioning is a well-known marketing model applicable when addressing a diverse customer base. It is synonymous with market segmentation.
In order for Jenna's plan to be effective, it has to tackle each target group specifically, according to their own characteristics, preferences and habits. That way, the company can tailor their marketing efforts towards each target group respectively.
Trung has been an employee with PureEnergy Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Trung has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Trung has reached so far?
A. Level 5
B. Level 4
C. Level 3
D. Level 2
Answer:
B) Level 4
Explanation:
Level 4 Leadership:
At this level the organization's leaders must be able to transition from producers to developers. Producers are able to make things happen while developers are able to develop the potential of their subordinates. Leaders must channel their efforts towards fulfilling the organization's objectives. Usually successful leaders are able to reach this level, but very few go beyond it.
A u.s. treasury bond is a______________.
a. store of value and common medium of exchange.
b. store of value, but not a common medium of exchange.
c. a common medium of exchange, but not a store of value.
d. neither a store of value nor a common medium of exchange.
Answer:
The correct answer is B
Explanation:
The US treasury bond is the bond which is a debt securities that have a maturity of more than 10 years but less than the 30 years. It pays the fixed interest rate each year.
It has a store of value which means an asset that maintains the value without depreciating it, but not the common medium of the exchange.
When people buy stocks/bonds we call this _____ and it _____ count in gdp.
Answer:
The correct answer: financial investment; not included.
Explanation:
The bonds and stocks securities or financial instruments. The investment in these instruments is called a financial investment.
The value of these financial investments derived from sell and purchase of stocks/bonds is not included in GDP as it does not involve any production.
The GDP of an economy measures the value of production of final goods and services in an economy.
When people buy stocks or bonds, it is considered financial investment and does not count in GDP.
Explanation:When people buy stocks or bonds, we call this financial investment and it does not count in GDP. GDP, or Gross Domestic Product, measures the total value of all final goods and services produced within a country's borders. Financial investments like stocks and bonds represent ownership in companies or debt obligations, and while they play a crucial role in the economy, they are not considered part of GDP because they do not directly contribute to the production of goods and services.
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