Compute the purchasing power gain or loss for the year

Assignment Help Macroeconomics
Reference no: EM13319796

A firm has a net monetary liability balance of $10,000 on January 1, 2001. During the first third of the year, the balance decreased to $7,500. During the second third of the year, the balance increased to $12,500. During the last third of the year, the balance increased to $20,000. The general price index was 100 during the first third of the year, 110 during the second third, and 106 during the last third. Compute the purchasing power gain or loss for the year.

Reference no: EM13319796

Questions Cloud

Find the mean and standard deviation when salary is measured : Let X denote the annual salary on university professors in the United States, measured in thousands of dollars. Suppose that the average salary is 52.3, with a standard deviation of 14.6.
Use integration to find the expected prison sentence : Let X denote the prison sentence, in years, for people convicted of auto theft in California. Suppose that the pdf of X is given by
Find the probabilities of the following events : Let X be the random variable distributed as Normal (5,4). Find the probabilities of the following events
Compute the following holding gains : A plot of land costing $200,000 was acquired on January 1, 2001. The price level was 120 on that date. One-quarter of the land was sold on December 31, 2001, for $60,000 when the general price level was 180. Compute the following holding gains:
Compute the purchasing power gain or loss for the year : A firm has a net monetary liability balance of $10,000 on January 1, 2001. During the first third of the year, the balance decreased to $7,500. During the second third of the year, the balance increased to $12,500.
What was her nominal rate of return : Katie earned a 2.7 percent real rate of return on her investments for the past year. During that time, the risk-free rate was 4.1 percent and the inflation rate was 3.6 percent. What was her nominal rate of return?
Determine the percentage change of the euro between these : In mid-March 2007, the U.S. dollar equivalent of a euro was $1.3310. In mid-July 2009, the U.S. dollar equivalent of a euro was $1.4116. Determine the percentage change of the euro between these two dates.
Arnold corporation has been authorized to issue : Arnold Corporation has been authorized to issue 40,000 shares of $100 par value, 8%,noncumulative preferred stock and 2,000,000 shares of no-par common stock
What happens to the demand for diet cola brand x : Ceteris paribus, Diet Cola Brand X and Diet Cola Brand Y are substitutes in consumption. The price of Diet Cola Brand Y falls.

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Decrease and increase production

For a perfectly competitive firm the price is $2 per unit. At this price the firm is producing and selling 10,000 units. It costs $1.50 to produce the last unit. Should the firm produce more? Less? Why?

  What is the price elasticity of demand

What is your price elasticity of demand for gasoline and why? How important is fuel efficiency to you (particularly if you have purchased a car in the past three or four years)? Do your driving habits change as the price of gasoline changes?

  Describe main organizational task to run or any enterprise

The socialist economy of Soviet Union can be looked at as one huge enterprise. Describe the main organizational task to run this or any enterprise. What are the similarities with and differences to a "normal" enterprise in a market economy

  Ellucidate what happens to the price of a bond

Ellucidate what happens to the price of a bond that pays a fixed percent of the face value every year when interest rates in the economy increase.

  Read the article "fdi into africa on the up"

Read the article "FDI into Africa on the up" from Ernst and Young and discuss on the following questions by writing 1 and half pages with proper citation with own words. § What is the impact of increasing FDI into Africa on the global economy? § If y..

  How the shocks would affect the real wage rate

Use the classical model and the quantity theory of money to predict how each of the following shocks would affect the real wage rate (W/P), the real interest rate (r), real aggregate income (Y), and the price of goods and services (P) in a closed ..

  Fully discuss the method by which the federal reserve

Fully discuss the method by which the Federal Reserve uses the banking system to create new money.

  Effect the demand curve of the right to pollute

For any given demand curve for right to pollute, the government can achieve the same outcome either through setting a price with a corrective tax or through setting quantity with pollution permits.

  Discuss the three main factors that determine aggregate

Discuss the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.

  The economy''s natural rate of unemployment

These schedules reflect the fact that, prior to the period we're examining, decisions makers entered into contracts and made choices anticipating that the price level would be P105.

  What fallacy of payback analysis does this ror value

Julian Browne, owner of Clear Interior Environments, purchased an air scrubber, HEPA vacuum, and other equipment for mold removal for $15,000 eight months ago. Net cashflows were $-2000 for each of the first two months, followed by $1000 per month..

  What is the duration of this loan

What is the duration of this loan? What is the duration of a five-year, $1,000 Treasury bond with a 10 percent semiannual coupon selling at par? Selling with a yield to maturity of 12 percent?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd