why might it be better to lean against credit-driven bubbles rather than just clean up after other types of asset bubbles burst?

Answers

Answer 1

Although there is less collateral damage when an asset bubble collapses than when a credit-driven bubble does, macroeconomic coverage failure occurs when a credit-driven bubble does in a financial system.

When a bubble bursts, the price decrease that follows causes unsustainable investment schemes, especially but not exclusively speculative and/or Ponzi investments, to fail. This consumer and investor confidence crisis could during a bubble, investors keep pushing an asset's price higher than.

Eventually, when prices fall and demand declines, the bubble "bursts." As a result, consumer and business expenditures are typically reduced, which may cause the economy to slow down.In light of the information provided.Compared to a credit-driven bubble, there is less collateral damage when an asset bubble explodes.

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Related Questions

describe the options that you have if the goods that you receive as a buyer are nonconforming to the goods described within a written sales contract?

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Nonconforming goods are delivered that don't satisfy the specifications (quantities and qualities) of the requested goods defined in a purchase contract.

What are the remedies available to a buyer?

1. Lawsuit for Damages for Non-Delivery - If the seller wilfully fails or declines to deliver the products to the buyer, the buyer may bring a lawsuit for damages for non-delivery. Additionally, in the event of non-delivery, the buyer has the right to get their money back, if they have already paid the price.

2. Lawsuit for price - In the event that the buyer has already paid the price but the items are not delivered to him, he may sue to reclaim the money.

3. Suit for specific performance - When the goods are specified or determinable, the buyer may bring legal action against the seller to require him to fulfil the same goods as agreed upon under the terms of the contract. Only in cases where the products are specific or known, does the court issue orders for specific performance and damages.

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strategy is an integrated and coordinated set of commitments and actions to develop core competencies and gain a competitive advantage. b. core competencies are resources and capabilities that can be developed through r

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The goal of company strategy is to create core skills and acquire a competitive advantage. A coordinated and integrated set of promises and actions is a strategy. If a resource or skill is precious, uncommon, expensive to duplicate, and non-replaceable, it qualifies as a core competency.

What is strategy and example?

A company's strategy refers to its long-term goals as well as the strategy it has in place to reach those goals. In other terms, it serves as an example of the plan used to accomplish the stated objective. A tactic is a specific action that is carried out in order to achieve the goals set forth in the strategy. All common elements of strategy include establishing objectives and goals, selecting actions to achieve the goals, then allocating to carry out the tasks.

Why is strategy very important?

Our business's purpose is defined and given a set of values by our strategy. It facilitates our comprehension of what true success implies. It offers a route for our company, outlines our destination, and recommends helpful rest stops along the way. The secret to determining the most crucial components of a strategic plan is to select goals and objectives that maximize your potential while minimizing resource usage and risk.

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a company buys electronic components, assembles them into pcs, and then ships them to customers. in this case the electronic components are for the company. a.inputs b.processes c.products d.outputs e.services

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A business purchases electronic parts put them together into computers, and then sends them to clients. In this instance, the company's inputs are the electronic components.

What is the name of the electronic component?

Other names for the same item include an electronic device, a circuit element, or an electronic component. a fundamental component, often a single package with two or more leads or metal contacts, of an electronic circuit

what are the types of electronic components available?

Diodes, resistors, transistors, capacitors, inductors, and resistors are some of the components that make it up. The components are linked together using conductive wires or traces. A circuit, however, can only be said to be finished if it forms a loop and begins and ends at the same location.

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suppose at her current level of consumption, a person enjoys eating fruit three times as much as eating yogurt. the price of a serving of fruit is $2 and the price of a yogurt is $1. assume she is spending all of her income on these two goods. is the person spending her income (for these two goods) in a manner that maximizes her utrity?

Answers

No, the person should increase fruit consumption but  decrease yogurt's consumption.

What does income effect mean?

The income effect is a change in an individual's or economy's income and how that change affects quantity demanded. For example, John Doe needs more product after a pay raise because he has more disposable income.

How do you know if the income effect is positive or negative?

Common goods and services usually have a positive income effect. As income increases, so does demand. And when income falls, demand falls. If demand decreases as income increases, the good or service is likely to be inferior and is said to have a negative income effect.

What are the sources of income?

Salary income, Interest income, Dividend income, Profit income, Income from capital gains, rental income, Income from royalties.

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is also called procurement. a.purchasing management b.automation c.inventory management d.materials control e.quality control

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Purchasing management is also called procurement. The procurement is the term which means to buy or purchase products and services for the selling purpose.

The purchasing management is the management in which the business buys the products in the bundle or stock quantity for the re-selling purpose or to make their business products as taking the raw material or intermediate  goods or stocks.

The purchasing management is the management in which the small seller or shopkeeper become unite with the big organization or business to sell their products and give some profit at the end of the year.

The purchasing management is good for those seller who is not able to sell their products.

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given the following financials and a 365-day year, what is the cash-to-cash cycle? sales: $50,002 cost of goods sold: $42,068 beginning inventory: $1,051 ending inventory: $1,301 receivables: $6,493 payables: $11,293

Answers

Required 1 Required 2 Use the information above to compute the number of days in the cash conversion cycle for each year.

Cash: What Is It?

Currency or coins are considered legal tender and can be used to pay for goods, settle debts, or exchange services. In some cases, the value of assets that can be quickly converted into cash is also included, as provided by a corporation.

Why does cash matter in accounting?

Cash accounting is used by companies that only record transactions once money has actually changed hands. Until payment is received or paid, these companies won't report income or expenses. It doesn't matter if the goods and services have been delivered or if the invoice has been sent.

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a company had net cash flows from operations of $143,000, cash flows from financing of $376,000, total cash flows of $569,000, and average total assets of $3,880,000. the cash flow on total assets ratio equals:

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Option B  is correct. A company had net cash flows from operations of $143,000, cash flows from financing of $376,000, Total cash flows of $569,000, and average total assets of $3,880,000. the cash flow on total assets ratio equals 4.1%.

Net cash flows from operations = 133000

Divide by Average total assets  = 3280000

Cash flow on total assets ratio = 4.1%  

Option B 4.1% is correct.  

Cash float is a degree of ways awful lot cash a business introduced or spent in general over a time period. Coins go with the flow is generally damaged down into coins glide from working sports, making investment sports, and financing sports on the announcement of cash flows, a common economic assertion.

Cash drift from operations is comprised of fees made as part of the regular route of operations. Examples of these coins outflows are payroll, the fee of goods sold, hire, and utilities. Coins outflows can range considerably whilst business operations are fairly seasonal.

A coins flow declaration suggests the exact amount of a company's cash inflows and outflows over a time frame. The earnings announcement is the maximum commonplace financial announcement and shows an enterprise's revenues and total costs, along with noncash accounting, such as depreciation over a period of time.

 

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Complete Question:

A company had net cash flows from operations of $133,000, cash flows from the financing of $356,000, total cash flows of $539,000, and average total assets of $3,280,000. The cash flow on total assets ratio equals:

Multiple Choice

A). 16.4%.

B). 4.1%.

C). 3%.

D). 16.5%.

E). 24.7%

Fill in the missing values in the following table, selecting the answers closest to the values you calculate.
Year
Quantity of Money
Velocity of Money
Price Level
Quantity of Output
Nominal GDP
(Dollars)
(Dollars)
(Cell phones)
(Dollars)
2017 200 ??
5.00 400 ?
2018 202 10 ?? 400 ??
The money supply grew at a rate of (.5%, 1%, 1.25%, 101%) from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of money (increased, decreased, remained the same), the change in the money supply was reflected (partially, entirely) in changes in the price level. The inflation rate from 2017 to 2018 was (.5%,1%,1.25%,101%).

Answers

The velocity of money in 2017 is 10.

The nominal GDP in 2017 is $2000.

The price level in 2018 is $5.05.

The nominal GDP is $2020.

The money supply grew at a rate of 1% from 2017 to 2018. Since cell phone output did not change from 2017 to 2018 and the velocity of money remained the same, the change in the money supply was reflected entirely in changes in the price level. The inflation rate from 2017 to 2018 was 1%.

What is the nominal GDP and the velocity of money?

Nominal GDP is the total value of goods and services produced by a country using current year prices. Nominal GDP is the product of the price level and the quantity of output.

Nominal GDP = price x quantity of output

Nominal GDP in 2017 = $5 x 400 = $2000

Velocity measures how fast money changes hands in the economy. According to the quantity theory of money, the product of velocity and the quantity of money is equal to nominal GDP.

Velocity x quantity of money = price level x quantity of output

Velocity x quantity of money = nominal GDP

Velocity = nominal GDP / quantity of money

Velocity in 2017 = $2000 / $200 = 10

Changes in price levels is used to measure the rate of inflation in the economy.

Price level = (Velocity x quantity of money) / quantity of output

Price level in 2018 = (202 x 10) / 400 = 5.05

Nominal GDP in 2018 = 5.05 x 400 = 2020

Inflation rate increase from 2017 to 2018  = (price level in 2018 / price level in 2017) - 1

Inflation rate increase from 2017 to 2018  = (5.05 / 5) - 1 = 0.01 = 1%

Increase in money supply from 2017 to 2018 = (quantity of money in 2018 / quantity of money in 2017) - 1

Increase in money supply from 2017 to 2018 = (202 / 200) - 1 = 0.01 = 1%

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what is the future value of $5,300 deposited today and kept in an account for 30 years earning 11% per year?

Answers

Answer:

you multiply 5300 by 111 and divide by 100 . the answer is 5883.Subtract 5300 from it and multiply by 30.Add it to 5300.

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