FREE Trial

Explain why stable prices are so important to an economy.

Question:

Explain why stable prices are so important to an economy.

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 50% (8 reviews)

High rates of inflation present two problems First it is hard to adjust to price level …View the full answer


answer-question
Answered By
tutor-profile-image
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details. PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+ 3+ Reviews 10+ Question Solved
Related Book For  answer-question
Financial Institutions, Markets and Money

Financial Institutions, Markets and Money

ISBN: 978-1119330363

12th edition

Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias

See More Books
Question Details
Chapter # 3
Section: Questions
Problem: 18
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: September 27, 2018 13:28:43
See More Questions

Students also viewed these Business questions

Q:
Formed in 1837 by William Procter and James Gamble as a small family-operated soap and candle company, Procter & Gamble Co. is now a leading consumer products company with over $83 billion in...
A:
This is the first in a series of cases on Procter and Gamble that end in Chapter 12 This first installment asks the student to reformulate the financial statements compare them to statements for Gener......
Q:
Explain why lean production and Six Sigma are so important to successful supply chain management.
A:
Use of the term lean has begun to replace use of the term JIT and is associated with the Toyota Prod......
Q:
Earnings per share are the most commonly cited financial ratio. Indeed, share prices rise and fall in reaction to a company's earnings per share. The price-earnings ratio is also published in many...
A:
MEMORANDUM To From Student Re Earnings per Share and Price Earnings Ratio Earnings per share are an important ratio for shareholders because it provid......
Q:
A solid conducting cylinder of radius 0.1 m and mass of 4 kg rests on horizontal conducting rails (Figure). The rails, separated by a distance a?= 0.4 m, have a rough surface so the cylinder rolls...
A:
Since the current through the rod is uniformly distributed we may treat th......
Q:
You found that Verto Stock is expected to generate earnings of $4.38 per share this year, and that the mean PE ratio for its industry is 27.195. Use the PE valuation method to determine the value of...
A:
Value Expected earn......
Q:
Using Eqs. 2.27 and 2.30, find the potential at a distance z above the center of the charge distributions in Fig. 2.34. In each case, compute E = V, and compare your answers with Prob. 2.2a, Ex....
A:
Click to View...
Q:
Explain why the quaternary ammonium salt A can be isolated in optically active form, but the trialkylammonium salt B cannot. CH3 T PhCH,N*CH,CH, C1- CHCHCH3 A CH3 PhCH NCHCH3 CI- - 1 H B
A:
Compound A has an asymmetric nitrogen stereocenter therefore......
Q:
The following data were selected from the records of Tunga Company for the year ended December 31, 2015: The company sells merchandise for cash and on open account with credit terms 2/ 10, n/ 30....
A:
Req 1 Sales Revenue Sales Discounts taken Sales Returns and Allowances Bad Debt Expense a 234 000 N......
Q:
Develop a product/service idea that serves a need that is currently not being met or takes advantage of an opportunity. It could be an extension of a currently available product. You should identify...
A:
Product Service Idea Personalized Learning Platform for Vocational Skills Problem Many individuals face challenges in acquiring vocational skills tail......
Q:
Dan gets on Interstate Highway 1-80 at Seward, Nebraska, and drives due west in a straight line and at an average velocity of magnitude 88 km/h. After traveling 76 Ian he reaches the Aurora exit...
A:
IDENTIFY Use information about displacement and time to calculate average speed and average......
Q:
Assume the Fed undertakes open-market operations and buys Treasury securities. Explain what should happen to interest rates. What is the expected change in nominal GDP?. How is nominal GDP then...
A:
When the Fed buys securities money supply expands In response consumer and b......
Q:
In your opinion, what were the three most important factors that caused the 2008 financial crisis?
A:
The first of the most important factors was the U S housing price bubble that burst......
Q:
How are light-bulbs frosted?
A:
To conclude we can say that Light bulbs are f......
Q:
Answer the following questions in a complete sentence or two: a. How do you know if an acid is strong or weak? b. How do you calculate the pH of a strong acid solution? c. How do you calculate the pH...
A:
a The strength of an acid can be determined by evaluating its ability to donate protons H in a solut......
Q:
What is the difference between a government security and a government agency security? Which asset would you prefer to own if safety and liquidity were important to you?
A:
The terms government security and government agency security are often used interchangeably but there is a subtle difference between the two Governmen......
Q:
A commonly stated rule of thumb is that reaction rates double for a temperature increase of about 10C. (This rule is very often wrong.) (a) What must be the approximate activation energy for this...
A:
a The approximate activation energy required for the rule of thumb that reaction......
Q:
What is the difference between financial futures and financial forward markets? What are derivative markets? What are the ways derivatives can be used?
A:
Financial Futures vs Financial Forward Markets Financial Futures Definition Financial futures are standardized contracts traded on organized futures exchanges These contracts obligate the buyer to pur......
Q:
The secondary market for T-bills is active, and the secondary market for federal agency securities is limited. How does this affect the primary market for each security? Why are well- developed...
A:
An active secondary market for T bills and a limited secondary market for federal agency securities have different effects on the primary market for e......
Q:
a. Given the graphs shown at the top of the next page, calculate the total fixed costs, variable costs per unit, and sales price for Firm A. Firm B's fixed costs are $120,000, its variable costs per...
A:
a Fixed cost of firm A is 80 000 Variable cost 200 000 80 0......
Q:
31. What is the income that can be received over 15 years from $500,000 earning 6% annually? 32. What is the semiannual payment required to retire $50,000 in debt over 5 years at 8% compounded...
A:
To calculate the income that can be received over a certain period we can use the formula for the pr......
Q:
How do you think accounting irregularities affect the pricing of corporate stock in general? From an investor's viewpoint, how do you think the information used to price stocks changes in response to...
A:
Generally speaking accounting irregularities introduce additional uncertainty and risk Consequen......
Q:
Denton Co. plans to engage in an IPO and will issue 4 million shares of stock. It is hoping to sell the shares for an offer price of $14. It hires a securities firm, which suggests that the offer...
A:
The advantage is that Denton Co wants to have a successful offering in which it can sell all of its......
Q:
Describe international ETFs, and explain how ETFs are exposed to exchange rate risk. How do you think an investor decides whether to purchase an ETF representing Japan, Spain, or some other country?
A:
Exchange traded funds are passive funds that track a specific index By invest......
Prepare For The Challenge Of A Level Physics Study Guide To Bridging The Gap Between GCSE And A Level Physics 1st Edition - ISBN: B0851LN6PD - Free Book