Answer:
D) That businesses will begin increasing investments, which in turn, will cause a need for more employees.
Explanation:
When the Federal reserves lower interest rates, it makes the cost of borrowing affordable. Banks and other lenders can advance credit to households and businesses at attractive rates. Low-interest rate encourages banks to loan out rather than hold excess reverses.
Affordable credit is good news to investors as they can manage to borrow capital to expand their business. As businesses expand, they will require more employees to work in the expanded production. The low-interest-rate also encourages start-up business. The expansion of old enterprises and the formation of new ones create job opportunities in the economy.
The stock of Blue Water Tours, Inc. is expected to return 14.00 percent in a boom economy, 9.00 percent in a normal economy, and lose 8.00 percent in a recessionary economy. What is the expected rate of return on this stock if there is a 10.00 percent chance the economy booms, and an 85.00 percent chance the economy will be normal?
Answer:
Economy type Expected return Weightage Weighted Average
Boom 14% 10% 0.14*0.10= 0.014
Normal 9% 85% 0.85*0.090=.0765
Recession -8% 5% -0.08*0.05=-0.004
Add all the weigtage averages (0.014+0.0765-0.004)= 0.0865= 8.65%
The expected rate of return of the stock is 8.65%
Explanation:
In this question we need to find the weighted average returns, we know the expected return during a boom, normal and recession and we need to use the probabilities of boom, normal and recession as the weights, so the event which is most likely to happen will have the most weightage, this way we can find the expected return of the stock. There is a 85% chance that there will be a normal economy so the expected return in a normal economy will have the highest weightage.
With the advent of flexible manufacturing technologies and mass customization, establishing manufacturing facilities in each major market in which the firm is active is becoming less attractive.A. True.B. False
Answer:
A. True
Explanation:
As with the increasing modernization the technologies are increasing, which makes it easy to produce what a human desires.
As it is increasing day by day, and the technologies are easily accessible, by many people , there aren't much human interference involved in this. Not much of the efforts of humans are involved. Accordingly, the humans do not carry the old culture and art in such production or manufacturing the products.
Also the marketing in these days is comparatively quite easy, as with the access of internet by huge population.
These things make the efforts of people and manufacturers less attractive and visible.
Suppose the economy is in short-run equilibrium above potential GDP, the unemployment rate is very low, and wages and prices are rising. Using the static AD-AS model, the correct Fed policy to move the economy from the short- run equilibrium back to long-run equilibrium would be
an open market purchase of Treasury securities (bonds).
a decrease in reserve requirements.
an open market sale of Treasury securities (bonds).
a increase in taxes.
Answer:
an open market sale of Treasury securities (bonds).
Explanation:
An open market sale will decrease the money supply so aggregate demand decreases and shifts to the left.
German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the United Kingdom and the United States largely because:
a. of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.
b. large institutional investors control large blocks of stock.
c. private shareholders and large institutional investors rarely have large ownership positions in firms. d. the roles of CEO and chairperson of the board of directors are usually combined.
Answer:
(C) private shareholders and large institutional investors rarely have large ownership positions in firms
Explanation:
German executives differ greatly from UK and US ones since private shareholders have limited rights compared to those who held stakes in the United States and United Kingdom. Additionally, executives from the two countries are paid in equity (shares in the company) as part of their compensation, which causes them to have more interest in ensuring shareholders value (since they are one of them). This type of compensation does not happen in most German companies.
A(n) ________ is an organizational change that involves rethinking the nature of the business and the nature of the organization itself.A) systems analysisB) paradigm shiftC) automation programD) rationalization programE) business process redesign program
Answer:
Your answer is D
Explanation:
When an organization operates several businesses to spread the risk, such as a landscaping company that offers not only landscaping services but also lawn care, snow removal, and other services, that business is utilizing a ____ strategy.
Answer:
nevative correlation strategy
Active Appliances, an electrical appliance firm, forms a group to design a new software application. This group consists of a systems designer, a programmer, and a user representative. This is an example of a(n):______
Answer: cross functional team
Explanation: In simple words, cross functional team refers to a group of individuals having expertise in different fields such as marketing, finance and technology etc. working towards same goal.
These kinds of groups are usually made in corporations that are involved in high profile projects requiring heavy resources and heavy expertise in different aspects of the operations.
In the given case, active appliances needs to make a software application and has formed a team consisting designer, programmer etc. Hence we can conclude that the given case depicts cross functional team.
A government collects $700 billion annually in tax revenue. Each year it allocates $70 billion to the justice system and $130 billion for its own administrative costs. What percentage of annual tax revenue is allocated to these two categories of government spending?
Answer:
% in Justice system: 10%
% in administrative costs: 18.57%
Explanation:
To know the percentage of annual tax revenue allocated to justice system and administrative costs you can use this formula:
%=(quantity/total)*100
"Quantity" in this case refers to the amount of money that government spends on each category. And "total" is the total amount of money that the government collects. Then,
% in Justice system:
($70billion/$700 billion)*100 = 10%
% in administrative costs:
($130 billion/$700 billion)*100= 18.57%
The percent of sales method provides a more detailed plan for future financing needs than the cash budget because both pro forma income statements and balance sheets are used in the analysis. True False
Answer:
The correct answer is False.
Explanation:
In online advertising, it is the amount of money an advertiser pays for each click that a given ad receives. In other words, the advertiser pays the publisher for each valid click that a visitor or user makes on the advertising provided by the advertiser.
It is based on the sales of the previous year and balance of the previous year and shows the additional financing that the company will need if its sales increase from one period to another.
The percentage of sales method is a method of financial forecasting that consists in expressing the needs of the company in terms of the percentage of annual sales invested in the balance sheet item in order to determine short-term financial needs.
Convert the accounts used in the balance sheet for the percentage of sales method to predict sales in a percentage of the sales for the current year. The accounts you need to convert include cash, accounts receivable, inventory, retained earnings and fixed assets on the active side of the balance sheet. To make this conversion, divide the total of each account by the total sales for the current year. This will result in each account showing a percentage based on this year's sales.
It is a factor that we multiply by 100, to be expressed as a percentage of the Asset with the Liabilities, and thus it gives us the amount of financing that the company needs, either from internally generated funds or from external sources.
The proper quantity of safety stock is typically determined by:_________
a. setting the level of safety stock so that a given stockout risk is not exceeded.
b. using a single-period model.
c. multiplying the EOQ by the desired service level.
d. carrying sufficient safety stock so as to eliminate all stockouts.
e. minimizing total costs.
Answer: im stuck on the saame queston
Explanation:
The correct option is 'The proper quantity of safety stock is typically determined by' a. setting the level of safety stock so that a given stockout risk is not exceeded.
The proper quantity of safety stock is typically determined by setting the level of safety stock so that a given stockout risk is not exceeded. Safety stock is a buffer inventory held to protect against uncertainties in demand and lead time. It helps to ensure that there is sufficient inventory available to meet customer demand even during unexpected fluctuations or delays. The level of safety stock should be determined based on the desired service level, which is the probability of not experiencing stockouts. By analyzing historical demand data and lead time variability, companies can calculate the appropriate amount of safety stock that will provide a desired level of customer service while minimizing the risk of stockouts. This approach allows companies to balance the costs of carrying excess inventory with the costs of potential stock outs, ultimately optimizing their inventory management and overall costs.
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Product placement has reached the world of live theater and opera. The difference between product placement and other forms of promotion is:
A. prominent personalities add a message about the product.
B.viewers are being marketed to subliminally without their consent.
C.products are focused showing different angles.
D. ethical concerns are not taken into account.
E.sponsors are recognized for their contribution.
Answer: Products are focused showing different angles.
Explanation:
Product placement is a form of advertisement in which a product is consciously placed in a televised show or video advert.
This done to draw the public attention to the specific product. The product can be the central attention point of the advert or may have repeated appearances in a show.
Product placement in live theater and opera differs from other forms of promotion because sponsors are recognized for their contribution.
Explanation:The difference between product placement and other forms of promotion in live theater and opera is that sponsors are recognized for their contribution.
Unlike other forms of promotion, product placement in live theater and opera involves sponsors being acknowledged publicly for their support. This recognition can be in the form of verbal acknowledgments, program mentions, or visual displays of sponsor logos.
For example, in some opera performances, a company's logo may be projected onto a screen during intermissions, or there may be announcements thanking sponsors before the show begins.
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Hannah needs a savings tool to help her manage her everyday purchases. The savings tool needs to be very liquid and accessible. Which of the following savings tools should Hannah choose?
A. Certificate of depositB. checking accountC. Money market deposit accountD. Any of the above savings tools would help Hannah
Answer:
B. checking account
Explanation:
Based on the requirements that Hannah has set forth for herself, it seems that the best option would be a checking account. This is a type of bank account that is very liquid, meaning she can easily access her money whenever needed and can keep track of how much she is spending and saving all through mobile apps or online accounts.
According to the annual Summer Vacation Survey conducted by Myvesta, a nonprofit consumer education organization, the average summer vacation costs $2252. If $1790 of this amount is charged on a credit card, what percent of the vacation cost is charged? Round to the nearest tenth of a percent.
Answer: 79.50%
Explanation: Total Average vacation cost = $2,252
Amount charges on Credit card = $1,790
Amount not charged to Credit card = $462
Percentage of amount charged = 1,790/2252*100
= 79.48 apprx =79.50%
In competitive markets, which of the following is not correct? Group of answer choices No individual buyer can influence the market price. Some sellers can set prices. Firms produce identical products. Buyers are price takers.
In perfectly competitive markets, the following is not correct: Some sellers can set prices. Therefore, the correct option is B.
In a perfectly competitive market, there are many buyers and sellers, and none of them have the ability to individually influence the market price. The price is determined by the interaction of supply and demand forces in the market. Each buyer and seller takes the market price as given and adjusts their behavior accordingly. In competitive markets, the correct statement is that no individual buyer or seller can set prices.
Thus, the ideal selection is option B.
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The complete question might be:
In competitive markets, which of the following is not correct? Group of answer choices
A No individual buyer can influence the market price.
B Some sellers can set prices.
C Firms produce identical products.
D Buyers are price takers.
In competitive markets, the incorrect statement is that 'Some sellers can set prices', as it contradicts the nature of perfectly competitive markets where prices are determined by market forces, making both buyers and sellers price takers.
Explanation:In competitive markets, the statement that is not correct among the given choices is 'Some sellers can set prices'. This is because, in a perfectly competitive market, no individual buyer or seller has the power to influence the market price. The price is determined by the forces of supply and demand in the market, making both buyers and sellers price takers. Firms in such markets produce identical (or highly similar) products, and buyers have to accept the market price, thus cannot influence it either. Therefore, the assertion that some sellers can set prices contradicts the fundamental characteristics of a perfectly competitive market, where the market itself sets the prices.
In the Solow growth model with population growth and labor-augmenting technological change, the break-even level of investment must cover:______
1. depreciating capital, capital for new workers, and capital for new effective workers.
2. depreciating capital and capital for new workers.
3. depreciating capital and capital for new effective workers.
4. depreciating capital.
Answer:
1. depreciating capital, capital for new workers, and capital for new effective workers.
Explanation:
break-even investment is the level of investment necessary to keep the capital-labor ratio constant.
1. Which Response core capability involves ensuring the capacity for timely communications in support of security, situational awareness, and operations by any and all means available, among and between affected communities in the impact area and all response forces?
A. On-scene Security, Protection, and Law Enforcement.
B. Operational Communication.
C. Infrastructure Systems.
D. Logistics and Supply Chain Management
2. Whose duties include operation of the National Response Coordination Center, the effective support of all Emergency Support Functions, and, more generally, preparation for, protection against, response to, and recovery from all-hazards incidents?
A. Senior Federal Law Enforcement Official
B. DHS Director of Operations Coordination
C. Secretary of Homeland
D. FEMA Administrator
Answer:
1)On-scene Security, Protection, and Law Enforcement.
2)FEMA Administrator
explanation:1)The on-scene security,protection and Law Enforcement is an agency whose core duties are to maintain a safe and hazardous-free working environment via law enforcement and hastily effective communication by any means possible to ensure security and protection of people and communities located within affected areas in the jurisdiction of work-place and also for personnel involved or engaged in these life-threatening operations being carried out.
2)The FEMA Administrator duties are
thoroughly centred on emergency which include; the effective administration of the National Response Coordination Center,effective&total response to emergencies/events resulting from hazardous incidents.Also to ensure a total recovery process is possible arising from the events,thus providing support for all/emergencies as the case maybe.
Love Languages is introducing an improved version of its tutoring targeted to students wanting more in-depth assistance using a CD format. The company has decided to continue to offer their original tutoring package and aim the new product at the original target market; therefore they are employing a ____ product strategy.
Answer: Modified product strategy
Explanation:
The modifying product strategy is one of the important strategy in the market as it basically refers to the value adding information and also modification in the existing products.
The modified product strategy also known as the product life cycle where the existing products are get modified according to the new product strategy. By adding various types of features and also improve the performance of the product then it known as the product modification.Therefore, the modified product strategy are used by the company for producing various types of new products and their aim is to produce the new product in the given original target in the market.
Disney is implementing a new type of pricing. When demand increases and more customers visitthe parks, the price will increase. When demand dips during the slow season, prices will decrease. This is a way to help balance out supply and demand. What is another name for the type of pricing that Disney is using?
a. cost-based pricing.
b. competition-based pricing.
c. dynamic pricing.
d. cost-plus pricing.
e. markup pricing.
Answer: (C) Dynamic pricing
Explanation:
The dynamic pricing is basically refers to the time based pricing and demand pricing in which the prices are fixed for the various type of products and services by the organization.
The dynamic pricing is also known as the discriminating pricing as it allow the maximize the profits for the each customers.
The dynamic pricing uses the proper data for the implementation and then produce the large amount of useful data by using the pricing strategies.
Therefore, option (C) is correct.
Final answer:
Disney is using dynamic pricing, which adjusts prices based on current market demand to balance supply and demand.
Explanation:
The type of pricing that Disney is using, where the price increases with higher demand and decreases when demand dips, is known as dynamic pricing. This strategy is used to balance out supply and demand by adjusting prices based on the current market conditions.
It is a contrast to strategies like cost-based pricing, competition-based pricing, cost-plus pricing, or markup pricing, which do not fluctuate as frequently with demand changes.
Dynamic pricing is a common practice in various industries, including airlines, hotels, and entertainment, where prices are adjusted in real-time or periodically to maximize revenue and efficiency.
A recent report on GDP growth rates showed that the GDP of Dorada, a developed economy, has declined by 1.5 percent this year. Emily George and her friend Tabitha Jude, both students of economics, are discussing the possible reasons for the decline in the growth rate. Emily feels that the government deficit has reached an unsustainable level, as a result of which interest rates now are extremely high. This has reduced government expenditure in recent times, leading to a decline in GDP. Tabitha however disagrees. According to her, the fall in GDP must imply a fall in consumer spending as household consumption accounts for the largest share in Dorada's GDP Which of the following, if true, will weaken Tabitha's argument?
A. The government of Dorada recently introduced a new medical care program for lower-income individuals
B. The government increased income tax rates by 0.75 percent this year for each income tax bracket. and senior citizens.
C. The interest rates on bank deposits have increased by 1 percent.
D. Although sales tax rates remained unchanged, the government's revenue from sales taxes increased considerably this year
E. The government of Dorada has recently raised the price ceiling on house rents.
Answer:
D. Although sales tax rates remained unchanged, the government's revenue from sales taxes increased considerably this year
Explanation:
If revenues froms sale tax have increased, then, consumption has increased too. A sales tax is a form of consumption tax, hence, consumption and revenues from this tax are correlated, and are directly proportional. This would weaken Tabitha's argument if true.
Management estimates the company's allowance for doubtful accounts as $200,000, and the auditors develop an estimate that suggests that the amount should be between $230,000 and $250,000. The factual misstatement in this situation is:a. $0.b. $30,000.c. $50,000.d. $40,000.
Answer:
Opton a $0
Explanation:
Factual misstatements There is no doubt of a mistake. There is an instance necessary to dsiclosure the correct information which is missing.
This is not the case as the company has a doubful accounts and disclosure in his statements.
Therefore, this is not a factual misstatement. The company has used an inferior or different method than the auditor.
Flint Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capacity to meet customers’ demand for its product. Flint issues a(n) $912,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 11%. The company will pay off the note in five $182,400 installments due at the end of each year over the life of the note.
1.Prepare the journal entry at the date of purchase.
2.Prepare the journal entry at the end of the first year to record the payment and interest, assuming that the company employs the effective-interest method.
3. Prepare the journal entry at the end of the second year to record the payment and interest.
4. Assuming that the equipment had a 10-year life and no salvage value, prepare the journal entry necessary to record depreciation in the first year. (Straight-line depreciation is employed.)
Answer:
Please see the answers below:
Explanation:
1.
Debit: Equipment $912,000
Credit: Notes Payable $912,000
To record purchase of equipment at zero interest bearing note Central Michigan.
2.
Debit: Notes Payable $182,400
Debit: Interest Payable $20,064
Credit: Cash $202,464
To record Cash Payment of 1st year Installment and Interest.
3.
Debit: Notes Payable $182,400
Debit: Interest Payable $20,064
Credit: Cash $202,464
To record Cash Payment of 2nd year Installment and Interest.
4.
Debit: Depreciation Expense $91,200
Credit: Accumulated Depreciation $91,200
To record Depreciation Expense on Equipment over the life of 10 years with no salvage value. (Straight Line Depreciation is employed).
Final answer:
The detailed answer provides journal entries for equipment purchase, payments, interest expenses, and depreciation. It explains each transaction clearly.
Explanation:
1. Journal entry at the date of purchase:
Debit Equipment $912,000
Credit Notes Payable $912,000
2. Journal entry at the end of the first year:
Debit Interest Expense $100,320
Debit Notes Payable $82,080
Credit Cash $182,400
3. Journal entry at the end of the second year:
Debit Interest Expense $89,000
Debit Notes Payable $93,400
Credit Cash $182,400
4. Journal entry for depreciation in the first year:
Debit Depreciation Expense $1,750
Credit Accumulated Depreciation $1,750
Which of the following statements is FALSE?
a) Correlation is the expected product of the deviations of two returns.
b) The covariance and correlation allow us to measure the co-movement of returns.
c) The amount of risk that is eliminated in a portfolio depends on the degree to which the stocks
d) face common risks and their prices move together.
e) Because the prices of the stocks do not move identically, some of the risk is averaged out in a portfolio.
Answer:
a) Correlation is the expected product of the deviations of two returns.
Explanation:
Correlation is represented using the symbol ρ
Well the term correlation is derived from co variance and standard deviation of two.
It is in the form of a divided by b
Where a = co variance of the returns.
And b = Product of the standard deviation of the two.
Thus, it is just not the product of deviations.
Therefore, the statement in question is false.
The false statement is that correlation is the expected product of the deviations of two returns. Correlation measures the degree of a linear relationship between two variables, not their expected product deviations.
Explanation:The false statement amongst the provided options is: a) Correlation is the expected product of the deviations of two returns. Correlation instead measures the degree of a linear relationship between two variables, not the expected product of their deviations. While it is true that covariance and correlation measure the co-movement of returns (b) and that some risk is averaged out in a portfolio due to non-identical stock price movements (e), correlation is not directly related to the expected product of two deviations.
The amount of risk eliminated in a portfolio does depend on the degree to which the stocks face common risks and their prices move together (c). Correlation, covariance, and portfolio risks are all fundamental concepts in finance and investment management.
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In addition to providing home mortgages, large commercial banks have specialized in providing short-term funds to mortgage banking companies in order to enable them to originate mortgage loans and hold the loans until the mortgage banking company can sell them in the secondary market. This type of financing is commonly referred to as:
a. loan underwriting.
b. warehousing.
c. mortgage pipeline.
d. loan servicing.
Answer:
The correct answer is b. warehousing.
Explanation:
The Warehouse concept within the scope of structured finance is, according to its own name, the storage of a set of assets with the purpose of securitizing them later. The Warehouse has been a technique widely used in the years prior to the start of the so-called 'subprime crisis'. The Warehouse allows the originator of the assets a 'bridge' financing between the granting of loans (or other type of assets) to the debtors and the wholesale financing in the capital markets.
In a simplified way, the usual process of a Warehouse is as follows: first, the lender grants a financing line to a vehicle (Special Purpose Vehicle) specially designed for this purpose, and this in turn, grants the funds to the final lender and originator of the assets. Subsequently, as the originator grants new assets (for example, loans), they are transferred to the vehicle. It is the so-called ramp-up phase of the Warehouse. Finally, once the volume of assets reaches a certain size, the Warehouse line is refinanced. Normally, refinancing is done through securitization bond issues.
Kelley Company reports $1,500,000 of net income and declares $210,000 of cash dividends on its preferred stock for the year 2013. At year-end, the company had 340,000 weighted-average shares of common stock.
a. What amount of net income is available to common stockholders for 2013?
b. What is the company's basic EPS for 2013? Round your answer to the nearest whole cent.
Answer:
a. $1,290,000
b. $3.80
Explanation:
a. The computation of the net income is shown below:
= Net income - preference dividend
= $1,500,000 - $210,000
= $1,290,000
b. The earning per share is shown below:
= (Net income) ÷ (weighted-average shares of common stock)
= ($1,290,000) ÷ (340,000 shares)
= $3.80
Simply we apply the net income formula after considering the preference dividend and then earning per share is computed
ACME Corp. and Spacely Inc. are engaged in intense price competition in order to boost the market share of their widgets. This is best described as _______.
a. elasticity of demand
b. price discrimination
c. non-price competition
d. bartering
e. a price war
Answer: Option E
Explanation: In simple words, it refers to the situation in which two rival companies in an industry cut their prices with the objective of cutting the others customers and gaining a higher market share.
Generally it is performed for short term so that other firm could be demolished from the market but a company having strong reserves can perform it for a long term as well.
It is more evident in industries where the products of two companies are close substitutes of each other and there are few firs in the industry.
Luci has worked as a customer service representative for two years. She believes that this job has improved her ability to cope with a variety of stressful situations and is confident in her ability to do so. Luci is exhibiting which of the following personality traits?
Answer:
Self-efficacy.
Explanation:
Self-efficacy at work is a personality trait that impacts the attitude employees will take when performing challenges and tasks in an organization.
When the level of self-efficacy is high, employees are self-motivated to commit more and more deeply to their work, setting goals and objectives to achieve complex tasks, which are seen as results of personal effort and overcoming.
Suppose, for simplicity, that a bank uses a single interest rate for loans and deposits, there is no inflation, and all unspent money is deposited in the bank. The interest rate measures which of the following?
a. the cost of using a dollar today rather than a year from now
b. the benefit of delaying the use of a dollar from today until a year from now
c. the price of borrowing money calculated as a percentage of the amount borrowed
Answer:
All the options are correct.
Explanation:
It is assumed that a bank uses a single interest rate for both loans and deposits. There is no existing inflation in the economy. Money which is not spent is deposited in the bank.
On the basis of these assumptions, we can say that the interest rate is the cost of borrowing money which is calculated as a percentage of the principal or the amount borrowed.
For a depositor, it is the return on depositing money or benefit of depositing money instead of using it immediately.
It can also be referred to as the opportunity cost of not depositing the money in the bank but spending it instead.
Concerning the allocation of the publication budget among various journals, Select one: a. the cost-per-thousand calculation should be based on circulation to the total audience. b. the cost-per-thousand calculation should be based on circulation to the target audience. c. the comparison of alternative journals can readily be made by examining their actual page rates (cost-per-page). d. the comparison of alternative journals can readily be made by examining total circulation.
Answer:
adgggrg
Explanation:
Consider the market for natural gas. In this industry, low average costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and most likely unprofitable for a competitor to enter the market.
A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main source of a monopolist's market power is barriers to entry - that is, obstacles that make it difficult for competitors to enter the market. Which of the following best describes the source of the monopolist's market power in the preceding scenario?
a. Economies of scale
b. Innovation
c. Hard to duplicate resources
Answer:
A) Economies of scale
Explanation:
Producing natural gas is very expensive and requires a large investment. The costs and risks of the processes involved in the upstream and downstream of natural gas discourage competition. Besides requiring a large initial investment, a drilling company can never be 100% sure that they will be able to find and extract natural gas or petroleum. So besides having to spend a lot of money, you are assuming a great risk.
Even if a competitor finds natural gas, in order for the downstream process to be profitable, they must be able to extract a large volume to achieve economies of scale.
Fiat money has :
A. a great intrinsic value that is independent of its use as money.
B. little to no intrinsic value and is authorized by the central bank or governmental body.
C. value, because it can be redeemed for gold by the central bank.
D. little to no intrinsic value but is backed by the quantity of gold held by the central bank.
Answer: Option (B)
Explanation:
Fiat money is referred to as the currency which tends to have no intrinsic value and thus has been further entrenched as money. This process is often carried out by the federal government. This particular type of money does not tend to have the use of value, and only has the value since the authority i.e. the government tends to maintains its value.