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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:On April 1, the price of gas at Bob's Corner Station was $3.50 per gallon. On May 1, the price was $4.00 per gallon. On June 1, it was back down to
$3.50 per gallon.
Between April 1 and May 1, Bob's price increased by $0.50
Between May 1 and June 1, Bob's price decreased by $0.50
Suppose that at a gas station across the street, prices are always 20% higher than Bob's. In absolute dollar terms, the difference between Bob's prices
and the prices across the street is greater when gas costs $4.00 than when gas costs $3.50.
Some economists blame high commodity prices (including the price of gas) on interest rates being too low,
Suppose the Fed raises the target for the federal funds rate from 2% to 2.75%. This change of
raised its target by approximately
of 14.29% Y
or 14.29%Y
percentage points means that the Fed
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