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We Deliver operates a fleet of delivery trucks in Halifax. Analysis shows that if a truck is driven 96,000 kilometres during a year, the average operating cost is 10.3 cents ($0.103) per kilometre. If a truck is driven only 64,000 kilometres during a year, the average operating cost increases to 11.5 cents ($0.115) per kilometre. Required:
Problem 1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometre to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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