Country x is a small developing economy. the budget deficit of the government has been rising sharply in the last few years. the government spends a large amount of money to keep unprofitable public sector firms running. it also extends lavish salaries and retirement benefits to government employees. with low tax? revenue, the government has resorted to financing its deficit by issuing bonds. this was expected to lead to an increase in the price level. as the value of the currency? declined, the velocity of money in the country was also expected to rise.? however, while the velocity of money barely? increased, the price level in the economy increased disproportionately.

which of the following can most reasonably be inferred from the above? information?

a. the gdp of country x is likely to be declining.

b. the return on government bonds in country x is

c. interest rates in country x are likely to have increased.

d. income tax rates in country x are low.

e. the public sector employs more people than the private sector in country x.

Suppose the price of frozen yogurt, a substitute for ice cream, increases. what happens to equilibrium price and quantity of ice cream? a. the price and quantity of ice cream both increase b. the price and quantity of ice cream both decrease c. the price of ice cream increases and the quantity decreases d. the price of ice cream decreases and the quantity increases

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

17.     chef a says that garnish should be added to a soup right before serving. chef b says that garnish should be cooked with the other ingredients in a soup. which chef is correct? a. chef a is correct. b. both chefs are correct. c. chef b is correct. d. neither chef is correct. student c   incorrect which is correct answer?