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2 years ago

A price index that tends to be a leading indicator of future inflation rates is the

Business

1 answer:

Elenna [48]2 years ago

6 0

Answer:

Producer price index

Explanation:

Producer price index is used as an economic indicators which indicates the fluctuations in the price level in an economy. It is the leading indicator for the consumer price index.

Producer price index refers to the price index which measures the change in the average price received by the producers for their output over a specified period of time.

The producer price index doesn't takes into account the effect of indirect taxes but wholesale price index takes the effect of indirect taxes.

It is calculated as follows:

PPI = (Current prices received by sellers ÷ Base year prices) × 100

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Becky only eats out at Macaroni Grill, and she eats out three times per month. She receives a raise from $31,900 per year to $33

choli [55]

Answer:

Price elasticity of demand = 10.21

Explanation:

Given:

Old income (P0) = $31,900

New income (P1) = $33,500

Old Quantity (Q0) = 3 times

New Quantity (Q1) = 5 times

Computation of Price elasticity of demand :

Midpoint method:

Price elasticity of demand =

$\frac{\frac{Q1-Q0}{\frac{Q1+Q0}{2} } }{\frac{P1-P0}{\frac{P1+P0}{2} } } \\\frac{\frac{5-3}{\frac{5+3}{2} } }{\frac{33,500-31,900}{\frac{33,500+31,900}{2} } }\\\frac{\frac{2}{\frac{8}{2} } }{\frac{1600}{\frac{65400}{2} } }\\\frac{\frac{2}{4} }{\frac{1600}{32700} } }\\10.21$

Price elasticity of demand = 10.21

5 0

2 years ago

Squirrel Co. operates in a lean manufacturing environment. For June production, Squirrel purchased 6,000 units of raw materials

valina [46]

Answer:

At the time of purchase of raw material inventory,

Raw material inventory account will debit and accounts payable account will credit.

Therefore, the Journal entry for this transaction is as follows:

Raw Materials Inventory Account Dr. $36,000

To Accounts Payable $36,000

(To record the purchase of raw material on account)

Workings:

Raw material Inventory = Units of raw material purchased × Price per unit

= 6,000 × $6

= $36,000

3 0

2 years ago

A budget line shows the Multiple Choice alternative combinations of two goods that will yield the same level of total utility to

GuDViN [60]

Answer:

Option (d) is correct.

Explanation:

A budget line is a graphical representation which shows the combination of two goods that are to be purchased by the consumer with his available income. A budget line also known as the budget constraint.

The budget line is represented by the following equation:

Suppose that there are two goods: A and B.

(Price of good A × Quantity of good A) + (Price of good B × Quantity of good B) = Income of the consumer

4 0

2 years ago

Dixie South currently pays an annual dividend of $1.46 a share and plans on increasing that amount by 2.75 percent annually. Nor

sesenic [268]

Available Options are:

A. Market price.

B. Dividend yield.

C. Capital gains yield.

D. Total return.

E. Real return.

Answer:

C. Capital gains yield.

Explanation:

This can be explained using the Dividend valuation model formula, which is as under:

Po = Dividend * (1+g) / (R-g)

The reason is that the dividend paid out of Northern Culture has higher growth rate than the Dixie South which means that if the growth is higher the increase in the share value is higher. The growth in share value will increase the share price significantly because increase in growth increases the nominator by (1+g) and decreases the denominator by g. This means that the capital gains (Stock sale price - Stock purchase price) will increase significantly and hence the capital gains yield will increase.

As the company Northern has higher dividend growth rate, it will have higher Capital gains yield than the the stock of Dixie.

3 0

2 years ago

Calculating the Effect of Inflation.Bill and Sally Kaplan have an annual spending plan that amounts to $39,500. If inflation is

Mkey [24]

Answer:

$39,348

Explanation:

The amount that Bill and Sally Kaplan need represents the future value of $36,000

The inflation rate of 3 % if the interest rate

$36,000 will be the present value PV

The period is three years

The Future Value: FV = PV x(1+r)n

=FV = $36,000 x (1+3/100)3

=$36,000 x (1+0.03)3

=$36,000 x 1.093

=$39,348

8 0

2 years ago