The journal entry that indigo company would make, when it records payment of the note on the maturity date is 8400
What is journal entry?An entry in your journal serves as a record of a transaction in your company's books. Every transaction in double-entry bookkeeping requires at least two journal entries.
Dr. Payable Notes 8400
140 Dr. Interest expense
Money Cr 8540
Explanation:
Based on the information given if On April 12, the Hong Company agrees to accept a 60-day which include the amount of $8400 note from Indigo Company which means that in order to extend the due date on an overdue account the journal entry that Indigo Company would make, when it records payment of the note on the maturity date is :
Dr. Payable Notes 8400
Dr Interest expense 140
(8400/60 days) =140
Cr Cash 8540
(8400+140) = 8540
The journal entry that indigo company would make, when it records payment of the note on the maturity date is 8400
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Why does an increase in gas prices lead to less consumer spending on other items?.
The demand for gas is largely inelastic is an increase in gas prices lead to less consumer spending on other items.
good's price elasticity of demand is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good, but it falls more for some than for others.
The price elasticity gives the percentage change in quantity demanded when there is a one percent increase in price, holding everything else constant. If the elasticity is −2, that means a one percent price rise leads to a two percent decline in quantity demanded. Other elasticities measure how the quantity demanded changes with other variables (e.g., the income elasticity of demand for consumer income changes).
Price elasticities are negative except in special cases. If a good is said to have an elasticity of 2, it almost always means that the good has an elasticity of −2 according to the formal definition. The phrase "more elastic" means that a good's elasticity has greater magnitude, ignoring the sign.
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A formal report may be defined as a document in which a writer_____to solve a problem.
Formal reports present______to decision makers in business, industry, government and education.
What is the next step to take after defining the issue and describing the scope of your investigation and analysis?
a. Organize your research data
b. Choose the layout and style of the report template
c. Anticipate the needs of the audience
Which of the following phrases might be useful in writing the purpose statement for your formal report? Check all that apply.
a. We establish
b. The research explains
c. We evaluate
d. The research team establishes
After collecting and analyzing your data, you will need to organize it. Choose an organizational strategy, and then outline your report.
Why should you choose an organizational strategy for your report?
a. Poorly organized reports might reveal your true motives.
b. Logical information impresses decision makers
c. Well-organized reports demonstrate an understanding of how to use Web resources
What section of a proposal identifies the problem and discusses the goals of the project?
a. Background, problem, and purpose
b. Staffing
c. Authorization request
What should be promoted in the staffing section of the proposal?
a. The credentials and expertise of the reader's company
b. Cost savings for internal staff as well as benefits costs
c. The credentials and expertise of the project leaders and support staff
A formal report may be defined as a document in which a writer analyses findings to solve a problem.
A formal report is a comprehensive analysis that helps decision-makers in business, industry, and government. Formal reports analyze data and other information, draw conclusions, and suggest solutions for problems that have been recognized.
Formal reports can be classified as analytical or informational, depending on the purpose that is stated at the start of the report. Informational reports offer data or facts rather than recommendations. Data and facts are also provided in analytical reports, but they also analyze and interpret data to make recommendations.
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a corporation buys the stock of another company. which percentage of dividends received from the investment in the acquired company's shares are excluded from tax to the corporate purchaser of those shares? a 0% b 30% c 50% d 100%
50% percentage of dividends received from the investment in the acquired company's shares are excluded from tax to the corporate purchaser of those shares.
How are stock taxes determined?50%, In the event that a corporation invests in the shares of another business, 50% of the dividends earned are tax-exempt, leaving the remaining 50% subject to tax. A tax rate that rises with income, like the personal income tax rate, is the estate and gift tax.To figure out how much tax you owe on stock sales, first calculate your earnings. Add your marginal tax rate to the amount if you owned the shares for less than a year. Multiply by the capital gains rate % shown in the table above if you owned it for more than a year.Subtract the price at which you sold the shares from the original purchase price.To learn more about stock taxes refer to:
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The notion that workers tend to show an increase in performance when they know that they are being observed is called the ________ effect.
The notion that workers tend to show an increase in performance when they know that they are being observed is called the Hawthorne effect.
In the Hawthorne effect, participants of an experiment will increase their performance when they know that they are being evaluated or watched. Participants do this to improve their behavior in the experiment.
A form of reaction known as the Hawthorne effect occurs when people alter a behavior pattern as a result of becoming aware that they are being watched. Some academics believe the reports are mythical, despite the fact that the effect was identified during studies at the Hawthorne Western Electric plant.
In the initial study, individuals who produced electrical relays at the Hawthorne Works, a Western Electric facility in Cicero, Illinois, were involved. The illumination investigation was done between 1924 and 1927. Workers went through a succession of lighting modifications, with productivity supposedly rising with practically every change in illumination. It turns out that this was untrue.
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you know that sales employees' motivation is low, and you would like managers to consider a bonus based on volume sales. the question is how easy or difficult the goal should be. what would be the best monthly goal to set for a sales employee who normally achieves $50,000 in sales in a month?
The best monthly goal to set for a sales employee who normally achieves $50,000 in sales in a month would be 5% more than $50,000
Explanation.
Here are five motivational theories you can consider using to increase employee satisfaction and productivity:
1. Incentive theory
The incentive motivational theory suggests reinforcement, recognition, incentives and rewards motivate people.
2.McClelland's need theory
McClelland's need theory proposes there are three different needs most people have, and each need corresponds to a type of person who feels motivated to address that need
3. Competence theory
Competence theory proposes people often want to engage in specific activities to display their skills, intelligence and abilities.
4. Expectancy theory
The expectancy theory suggests people may perform certain behaviors if they think those actions can lead to desirable outcomes.
5. Maslow's hierarchy of needs theory
Maslow's hierarchy is a psychological theory that outlines the types of needs a person meets to progress to more complex needs.
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which of the following firms should maintain excess borrowing capacity to avoid financial distress costs?
Firms with Volatile sales, High operating leverage, Many potential investment opportunities and Special purpose assets should avoid financial distress.
When a business or individual is in financial hardship, it means that they are unable to satisfy their financial responsibilities because they are not able to create enough revenue or money.
This is typically caused by high fixed expenditures, a high percentage of illiquid assets, or revenue sources that are susceptible to economic downturns. Individuals may experience financial distress due to bad spending habits, excessive debt loads, lawsuits, or job loss.
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a growing chain is trying to decide which store location to open. the first location (a) requires a $500,000 investment in average assets and is expected to yield annual income of $80,000. the second location (b) requires a $200,000 investment in average assets and is expected to yield annual income of $46,000.
The return on investment is 16% for location A and 23% for location B.
A common profitability statistic used to assess how well an investment has done is the return on investment (ROI).
ROI is computed by dividing an investment's net return (or loss) by the investment's initial cost or outlay.
ROI is calculated as (profit – cost) / cost. Your return on investment (ROI) would be 0.9, or 90% if you earned $10,000 from a $1,000 investment.
For location A
= $80,000/ $500,000
=16%
For location B
=$46,000/ $200,000
=23%
As location B is giving a greater return on investment than location A, the company should prefer to invest in B.
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When you keep someone's personal information confidential, you are
What is the term for unprocessed natural resources that are refined into end products?.
Raw materials are unprocessed natural resources that are refined into end products.
Raw materials, also known as raw materials, raw materials, or primary raw materials, are the basic materials used in the manufacture of commodities, end products, energy, or intermediate materials that are the starting materials for future end products.
Raw materials are materials or substances used in the primary production or manufacture of goods. Commodities are commodities that are traded on commodity exchanges around the world.
A commodity is a naturally occurring substance (wood, ore, etc.) or produced by a farmer, rancher, etc. The raw materials are then processed into finished products.
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which rate directly determines the size of the bond's interest payments? multiple choice question. its yield to maturity its coupon rate the prevailing interest rate the risk-free rate
Coupon rate directly determines the size of the bond's interest payments. If the coupon is higher than the prevailing interest rate, the price of the bond will rise. If the coupon is low, the price of the bond will fall.
What is coupon rate?
The coupon rate is the nominal yield paid by a bond.
If the market is trending higher and cheaper, coupon holders will earn less than in general market conditions because the bond is not paying more because its value was determined at the time of issuance.
Yield to Maturity is the difference between a bond's interest payments that are higher or lower than the bond's coupon rate at the time of issuance, obtained when the bond is purchased in the secondary market.
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the first semiannual interest payment on december 31, 20y1, and the amortization of the bond premium, using the interest method. round to the nearest dollar. date account debit credit 20y1 dec. 31 interest expense interest expense interest expense 0 premium on bonds payable premium on bonds payable premium on bonds payable 0 cash cash 0 cash
The first semiannual interest payment on December 31 is $250.
What is semiannual?A semiannual event is one that is paid for, reported on, published, or otherwise occurs twice a year, often once every six months. For instance, until the bond's maturity date in 2030, the Buckeye City, Ohio Consolidated School District's 2020 issuance of a ten-year general obligation bond will pay interest on a semiannual basis each year. The interest on these bonds will be paid out twice a year, in this case twice a year in June and December, to investors who purchase them. A financial report on the district's operations will also be released twice a year, in November and February.
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Modern travel along with migration reduces the probability of _____ having an effect on the evolution of humans.
Modern travel along with migration reduces the probability of Genetic drift having an effect on the evolution of humans.
Genetic drift (allelic glide or the Wright impact) is the change in the frequency of a current gene version (allele) in a population due to a random hazard. Genetic drift may additionally purpose gene versions to vanish absolutely and thereby lessen genetic variation. it can additionally reason, to begin with, rare alleles to come to be an awful lot greater common or even constant. while few copies of an allele exist, the effect of genetic drift is more fantastic, and when many copies exist, the impact is much less first rate. within the center of the twentieth century, full-of-life debates befell over the relative significance of herbal selection versus neutral procedures, such as genetic go-with-the-flow.
Ronald Fisher, who explained herbal selection and the usage of Mendelian genetics, held the view that genetic glide plays at most a minor position in evolution, and this remained the dominant view for numerous many years.
In 1968, populace geneticist Motoo Kimura rekindled the debate with his neutral idea of molecular evolution, which claims that maximum times wherein a genetic trade spreads across a populace (even though now not necessarily modifications in phenotypes) are because of genetic go with the flow performing on neutral mutations. In the 1990s, positive neutral evolution become proposed which seeks to explain how complex systems emerge via neutral transitions.
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Which kind of warehouse allows a company to keep imported merchandise for a certain period of time without paying duties or tariffs?.
Customs warehouse allows a company to keep imported merchandise for a certain period of time without paying duties or tariffs.
A bonded warehouse, or bond, is a building or different secured location wherein dutiable goods can be saved, manipulated, or undergo manufacturing operations without payment of duty. it may be managed via the kingdom or by using private organization. inside the latter case a customs bond should be posted with the authorities.
This device is widely used in developed countries throughout the sector. even as the goods are within the bonded warehouse, they will, below supervision through the customs authority, be manipulated by cleaning, sorting, repacking, or otherwise changing their circumstance by strategies that do not amount to manufacturing.
After manipulation, and in the warehousing length, the goods may be exported without the fee of obligation, or they'll be withdrawn for intake upon charge of obligation on the fee relevant to the products of their manipulated situation on the time of withdrawal.
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the delivery, installation, warranty, and tech support you receive from best buy after buying a tv relates to which product level?
An augmented product has been given extra features or services by its seller to set it apart from similar products sold by rival companies
What exactly are augmented products?An auxiliary benefit or unique service that supports the primary product is known as an augmented product. Sellers utilize this technique to give their customers extra value for nothing. A product augmentation example is providing a warranty.An augmented product has been given extra features or services by its seller to set it apart from similar products sold by rival companies. A product can be enhanced by adding extra features or benefits that are not physically present.the addition of extra features, advantages, qualities, or associated services that assist to set the product apart from its rivals.To learn more about Augmented products refer to:
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Hitzu co. Sold a copier costing $4,800 with a two-year parts warranty to a customer on august 16, 2015, for $6,000 cash. Hitzu uses the perpetual inventory system. On november 22, 2016, the copier requires on-site repairs that are completed the same day. The repairs cost $209 for materials taken from the repair parts inventory. These are the only repairs required in 2016 for this copier. Based on experience, hitzu expects to incur warranty costs equal to 4% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.
A warranty is a seller's obligation to replace a product that fails to perform as expected within a certain time frame. The cost of repairing the item is derived from the seller of the product in this case.
(a) The company sold a $4,800 copier for $6,000 with an expected warranty cost of 4%.
The calculation for warranty expenses:-
Warranty expenses = rate of warranty * sales price
= 4% * $6000
= $240
Therefore, In 2015, the company recorded $240 as a warranty expense.
(b) Calculation of estimated warranty liability reported as of 31st December 2015 is as below.
Estimated Warranty expenses = rate of warranty * sales price
= 4% * $6000
= $240
Hence, as of 31st December 2015, the estimated warranty liability is $240.
(c) In 2016, the company spent $209 to repair the copier. And this amount is deducted from the estimated warranty liability. The company provided a two-year parts warranty, with warranty costs charged in 2015.
As a result, no additional warranty expenses for the copier were reported in 2016.
(d) The following is a calculation of the estimated warranty liability for the copier as of December 31st, 2016.
Estimated warranty liability = Estimated liability in the previous year - Warranty expense
= $240 - $209
= $31
As of December 31st, 2016, the estimated warranty liability for this copier is $31.
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Quality _____ are voluntary groups of people drawn from various production teams who make suggestions about the acceptability of a product but have no authority to make decisions or execute decisions.
Quality circles are voluntary groups of people drawn from various production teams who make suggestions about the acceptability of a product but have no authority to make decisions or execute decisions.
Quality circles provides the solution to the management about the concerning problem.
They motivates employees to share he problem related to work and solve it in a better manner.
It generally solves issue regarding the occupational health and safety.
They contributes towards the development of an organization by exploring hidden potentials of the employees.
The objective is to improve the productivity and product quality in the organization.
They helps to provide healthy work environment to work .
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1. what was the market structure prevalent in the household relocation segment of the indian logistics industry and what are the characteristics?
The marketplace shape gift within side the family relocation section for the Indian logistics enterprise become a Monopolistic Competitive Market shape.
The required details for Monopolistic competition in given paragraph
Monopolistic opposition is a kind of imperfect opposition such that there are numerous manufacturers competing in opposition to every different, however promoting merchandise that are differentiated from one another (e.g. with the aid of using branding or quality) and subsequently aren't best substitutes. In monopolistic opposition, a business enterprise takes the charges charged with the aid of using its competitors as given and ignores the effect of its personal charges at the charges of different companies. If this takes place within side the presence of a coercive government, monopolistic opposition will fall into government-granted monopoly. Unlike best opposition, the business enterprise keeps spare capacity. Models of monopolistic opposition are regularly used to version industries. Textbook examples of industries with marketplace systems much like monopolistic opposition include restaurants, cereals, clothing, shoes, and provider industries in big cities.
The "founding father" of the concept of monopolistic opposition is Edward Hastings Chamberlin, who wrote a pioneering book at the subject, Theory of Monopolistic Competition (1933).
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Employees at GreenTech Inc. complete their schedules on time as every hour they take in excess may lead to a corresponding loss of pay. Their behaviors are strengthened through _____.
a. Avoidance
b. Incentives
c. Positive reinforcement
d. Bonus
Through Avoidance, these behaviors are strengthened.
Which training approach would be most successful for instructing staff members about moral quandaries and moral judgment?The most effective way to teach ethical reasoning is through case studies, but it's essential that students develop their own case studies based on real-world situations and then apply the model's steps to real-world problems.
The motivational behaviorist theory is what?The behavioristic approach investigates how objectives are created and how learning to produce behavior interacts with both internal and external objectives. Compared to those who used the biological approach, learning theorists have looked at the motivation issue from a slightly broader perspective.
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an accounting firm is deciding whether to renew the lease at its current building or relocate to one several blocks away. this requires considering whether the current prestigious address is worth paying higher rent, the inconvenience and expense of moving the office, and a variety of other factors. this is a:
This calls for weighing various factors, such as the hassle and expense of moving the office and whether the current prestigious address is worth paying more rent for. This choice was not predetermined.
Describe an accounting firm.An accounting firm is a collection of accounting experts who offer financial management services to clients. Auditing, tax preparation, planning, processing of payroll, bookkeeping, and advice services are a few examples of these services. Although not all accountants are CPAs, some of these accountants may be certified, public accountants.
The organization of an accounting firm frequently depends on its size. Some accounting firms are operated solely from a person's home. Others have thousands of employees spread over numerous locations in the nation or abroad.
The way accounting firms bill their clients varies as well. When it comes to preparing taxes, it's common for some to bill by the project. Depending on the service offered, certain businesses may bill clients an hourly fee.
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you have an investment account that is starting with $1000. you would like the account to grow to $7500, and you can earn 7% interest annually. assume you make no additional contributions to the account. assume an annually compounded interest rate. how many years will you need to wait? (round to two decimals) you have an investment account that is starting with $1000. you would like the account to grow to $7500, and you can earn 7% interest annually. assume you make no additional contributions to the account. assume an annually compounded interest rate. how many years will you need to wait? (round to two decimals) 29.78 years
You have to wait 29.78 years for the investment account to grow to $7500.
How is annual compound interest determined?Compound interest, also known as interest on principal and interest, is the practice of adding interest to the principal amount of a loan or deposit.
You will accrue (or pay) compound interest each day if you use daily compound interest. With monthly, you will receive (or pay) interest every month, while with annual, you will receive (or pay) interest once a year. The more often you compound because of how the compound interest formula functions, the more interest is earned (or charged).
= log(Future Value/ Present Value) / log(1 + r)
= log( 7500/1000) / log( 1+7%)
= 29.7804
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there is a need for every business in the international marketplace to understand the prevailing culture in the countries that they are doing business in. this is known as multiple choice question. a global village. branding a business. globalization. cross-cultural literacy.
The correct answer is cross-cultural literacy. Cross-cultural acquisition has been outlined as understanding. However, the rustic culture affects the manner business is practiced.
Accepting a card from a Japanese capitalist isn't an off-the-cuff action. The person gifting the cardboard can bow and present it with each hand. The recipient takes it with each hand, indicating respect.
Cross-cultural skills are incontestable through the flexibility to speak with respect; acknowledge others' values, settle for data, skills, and talents; and tolerate, engage, and celebrate the success of others.
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How much should someone’s loan payment be if their total income is $100?
Someone’s loan payment if their total income is $100 should be 30 times their monthly income.
The loan payments means the amounts required to be paid by the borrower in repayment of the loan pursuant to the provisions of the loan agreement, the note and the bond mortgage.
In most cases, lenders consider approximately 50-75% of the net income as instalments. In case your expenses exceed the percentage, banks either increase the tenure of the loan or reduce the amount sanctioned.
Additionally, to minimise the risk of default, lenders keep the EMIs of the loan to about 45-60% of your monthly income.
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Which is not a true statement regarding a company issuing bonds over stock to raise additional capital?.
Bonds give ownership in a business is not a true statement regarding a company issuing bonds over stock to raise additional capital.
What is capital?
In economics, capital means the money a business needs to function and grow. Typical examples of equity include cash on hand and accounts receivable, cash equivalents, equity and fixed assets. Investments are significant long-term assets not intended to be sold in the ordinary course of business. Capital is a broad term that refers to anything that provides value or benefits to its owner, such as factories and their equipment, intellectual property such as patents, and financial assets of companies and individuals. Money itself can be called capital, but the term is usually used to describe money used to make things or invest. In the business world, the term capital refers to everything owned by a company that contributes to the accumulation of wealth. Sources of capital include: Liquefiable financial assets such as cash, cash equivalents and securities.
Tangible assets such as machinery and equipment used to manufacture products.
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building brands online can be expensive. this has proven especially true for successful social media sites, which have built brand awareness through expensive advertising campaigns.
A. true
B. false
false - building brands online can be expensive. this has proven especially true for successful social media sites, which have built brand awareness through expensive advertising campaigns.
A political marketing campaign is a prepared attempt that seeks to influence the choice-making development inside a specific institution. In democracies, political campaigns frequently check with electoral campaigns, by using which representatives are selected or referendums are determined. In present-day politics, the most high-profile political campaigns are focused on well-known elections and applicants for the head of kingdom or head of presidency, frequently a president or prime minister.
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bill is currently claiming unemployment. he reads that unemployment benefits are going to be extended and decides that he does not need to put as much effort into looking for a job. which type of information asymmetry does the scenario best represent?
Bill is applying for unemployment right now. When he learns that his unemployment benefits will be extended, he decides that he doesn't need to work as hard looking for work. In markets, asymmetric information causes issues that result in market failure. Moral hazard and adverse selection are the two primary issues.
There is a presumption that employees should not undermine one another at work. It would be socially embarrassing to take a friend's job by underpaying them. As a result, workers are reluctant to actually offer lower-paying jobs.
Which of the following most accurately describes cyclical unemployment?
A period of negative economic growth known as a recession can result in cyclical unemployment. Downturns in a business cycle, when demand for goods and services decreases over time, can also result in cyclical unemployment.
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which of the following can affect mortgage affordability?
a. mortgage rates
b. your down payment
-c. the length of the loan
d. the amount of income you earn
Your down payment can affect mortgage
affordability. Mortgage affordability mainly refers to your ability to repay any loans made to you by the bank.
When you apply for a mortgage, banks perform a number of affordability checks on you and your finances to determine the answer to that question.
Mortgage eligibility and affordability go hand in hand, and mortgage underwriting—when lenders take a closer look at your finances—supports both.
You'll have a better chance of receiving a mortgage offer if you pass affordability checks for a mortgage.
There's a good chance that you'll have enough new space in your salary to cover the repayments if you've been saving for a deposit for months or years while paying rent, but if you've been living paycheck to paycheck, you might need to prepare your finances before applying.
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what is the subgame perfect pricing policy for tony? please make sure you write down the strategies for all players and show why it is subgame perfect. record your answers on paper, then scan and upload them.
Nash Equilibrium has been improved, and Tony implements a subgame perfect Nash equilibrium pricing policy that is Backward Induction.
A subgame perfect Nash equilibrium, which is used in dynamic games, is a refinement of a Nash equilibrium in game theory. In order to represent a Nash equilibrium of each subgame of the original game, a strategy profile must be a subgame perfect equilibrium. Informally, this means that regardless of what has occurred prior to that point in the game, player behavior moving forward should always conform to a Nash equilibrium of the continuation game (i.e., of the subgame). A subgame perfect equilibrium exists in every finite large game with perfect recall. In 1953, Harold W. Kuhn coined the phrase "perfect recall," which he defined as "equivalent to the claim that each player is permitted by the rules of the game to remember everything he knew at previous moves and all of his choices at those moves."
In the context of a finite game, backward induction is a common technique for identifying subgame perfect equilibria. Here, one first takes into account the final moves of the game and determines the actions the final mover should take in each scenario to maximize his or her utility. Then, assuming the final actor will complete these actions, one considers the next-to-last actions, once more selecting those that maximize that actor's utility. Up until the game's opening move, this process continues. For finite-horizon extensive games of perfect information, the remaining strategies are the set of all subgame perfect equilibria. Backward induction, however, cannot be used in games with imperfect or insufficient information because it would require cutting through non-singleton information sets.
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zubi advertising services, inc., has worked with american airlines to create advertisements across various media. this ad agency is performing what role in the communication process?
Zubi Advertising Services, Inc. has worked with American Airlines to create advertisements across various media.Transmitter roles within the communication process.
What is transmitter in communication process?The transmitter combines the information signal to be carried with the radio frequence signal which generates the radio swells, which is called the carrier signal. This procedure is called modulation. The information can be adjoined to the carrier in several different ways, in distant types of transmitters.
What are the duties of transmitter block in communication system?
The transmitter's function is to reuse the communication signal into a form suitable for transmission over the communication channel. This is called modulation. As for the communication channel, its function is to give a pathway between the transmitter's affair and the receiver's input.
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Answer: It is Transmitter.
a company purchased $4,500 worth of merchandise. transportation costs for the buyer were an additional $395. the company returned $310 worth of merchandise and then paid the invoice within the 3% cash discount period. the total cost of this merchandise is:
The total cost of merchandise as company purchased is $4362.5.
Define the term cash discount?Cash discounts as incentives provided by sellers that decrease the level that the consumer owes by a set dollar amount or by a predetermined percentage of total bill. Discount given in exchange for immediate payment and payment within a certain period of time.Cash discount = (Purchases + Transportation cost - Purchase returns) * Cash discount rate.
Purchases - $4,500
Transportation cost - $395
Purchase returns - $310
Cash discount rate - 3%
Put the values;
Cash discount = (4,500 + 395 - 310) x 3%
Cash discount = $137.5
Total cost = 4500 - 137.5
Total cost = $4362.5
Thus, the total cost of merchandise as company purchased is $4362.5.
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inflation in argentina between 1988 and 1989 was 3078%. if a typical item in the argentine gdp cost 100 australs in 1988, how much did the typical item cost in 1989? a) 3078 australs b) 3178 australs c) 307.8 australs d) 317.8 australs
The cost of a typical item in 1989, after an inflation rate of 3078%, will be 3178 australs.
Calculation of Inflate rate:
Formula of the Inflation Rate is -
Inflation Rate = [tex]\frac{Current CPI - Previous CPI}{Previous CPI}[/tex] x 100
where, CPI = consumer price index
Let, previous CPI = X
Inflation Rate = 3078%
3078 = [tex]\frac{X-100}{100}[/tex] x 100
3078 = X - 100
X = 3178 australs
Hence, the 1989 cost will be 3178 murals.
What is Inflation?
Inflation is defined as a rise in prices that results in a loss of purchasing power over time. The average cost increase of a basket of selected goods and services over time can reflect the rate at which purchasing power declines.
The increase in prices, which is often expressed as a percentage, means that a unit of currency buys less than it did previously. Inflation is distinguished from deflation, which occurs when prices fall while purchasing power rises.
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