Many companies hold significant amounts of excess cash, that is, cash above the amount required for day-to-day operations. Does including excess cash as part of invested capital distort the ROIC upward or downward? Why?
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Many companies hold significant amounts of excess cash, that is, cash above the amount required for day-to-day operations. Does including excess cash as part of invested capital distort the ROIC upward or downward? Why?
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- You live in an economy experiencing high inflation. In this economy the price level P (t) has doubled after one year, that is, the price level is 2 x P (t) at the end of year t. Your endowment of cash at the beginning of year t is $50,000. a) How much money you have to add to your money balances in order to maintain the initial purchasing power of your cash endowment? Explain briefly. Correct answer without explanation does not gain marks. b) If you bought one bitcoin at a total cost of $50,000 at the beginning of year t and sold it by $87,500 at the end of year t, what was the real rate of return on your investment? c) how much were you taxed by the inflation tax, assuming that you kept the $50,000 under your mattress during the whole year t?What factors might cause the LAC curve to flatten out at high levels of output? (Relating to commercial banking industry)Suppose the US economy enters a recession. During the recession, inflation falls and interest rates rise. What kind of change ("shock") to demand and or production is likely cause of the recession? Answer in one short paragraph. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
- What are the underlying factors behind the favorable PMi(purchasing manager's index) in the U.S.A.?if real interest rates fall, output in the short run will (Rise or Fall)Scientists invent a new low cost solar panel able to reduce the price of producing electricity by 50% Given this improvement in technology, what will happen to the price level and output, respectively, in the long run? Rise. Fall Uncertain, Fall Uncertain, Rise Rise, Rise Fall, Rise
- Suppose the current inflation rate is a constant 7% and the central bank implements a disinflation policy to reduce it to its target rate of 3%. To achieve this objective the central bank, by increasing its cash rate, raise the nominal interest rate from its current 9% to 14%. In the long run, at which the central bank achieves its inflation target, what will be the nominal rate of interest, the real rate of interest and the inflation rate?During an economic downturn in the US, the automobile industry sales fell 1.2% from the previous year's sales of $6.3 million. Calculate the expected sales in millions after the decline (round to the nearest hundreth of a million) Blank 1Suppose that the money demand function is (M/ P)^d = 1000-100r where r is the interest rate in percent. The money supply M is 1000 and the price level P is 2. (a) What is the equilibrium interest rate?(b) Assume the price level is xed. What happens to the equilibrium interest rate if the supply of money is raised from 1000 to 1200?
- If a bank expects inflation to increase in the near future, how will it respond? It will start paying less interest on deposits. It will seek to reduce the amount of cash held in its vaults. It will temporarily scale back its efforts to gain new customers. It will start charging more interest on loans. It will temporarily suspend withdrawals.If the price level doubled and someone wanted to maintain the same level of purchasing power, the nominal quantity of money demanded: A) must decrease. B) also must double. C) must increase by 50%. D) must stay the same.The weighted average TT/US dollar selling rate depreciated marginally by 0.05 percent to US$1 = TT$6.7838 in August 2021 from US$1 = TT$6.7802 in October 2020.” Create a supply and demand graph with the above information.