Reference no: EM133033641
In the mid--1920s, the American author F. Scott Fitzgerald wrote a somewhat comical article for the Saturday Evening Post magazine titled, "How to Live on $36,000 a Year," in which he explained how he and his wife managed to spend their entire annual income of $36,000 without saving anything. a. In the mid--1920s, the consumer price index was around 18; in 2010, the CPI was around 225. Using these figures, calculate how much Fitzgerald's income would be worth in 2010's dollars. b. More recently, Forbes magazine published a list of the highest--paid authors, showing that J.K. Rowling, author of the Harry Potter books, earned $10 million in 2010. After adjusting for the effects of inflation, who earned more: Fitzgerald or Rowling?
In each case, please indicate whether the statement is true of false (you don't need to explain why). a. In an economy experiencing inflation, the nominal interest rate will be higher than the real interest rate. b. When the price of imported oil rises, that affects the CPI but not the GDP deflator. c. When the price of an aircraft carrier purchased by the US government rises, that affects the GDP deflator but not the CPI. d. Because new goods sometimes get invented that help American consumers enjoy a higher living standard at a lower cost, increases in the CPI tend to understate increases in the true cost of living. e. When calculating the CPI, analysts at the US Department of Labor try to account for the fact that the newest generation of iPods can do a lot more, and are therefore of a higher quality, than older models of iPods, even though the price of those iPods has remained about the same over the years.
Define the risk-adjusted rate of returns
When buying a company why do private equity firms use leverage?
What Are Ways In Which Revenues And Profits Can Be Maximized?
Describe The "4 Ps" In Marketing Related To Pricing?
What Are Minimizing Price Conflicts In Strategic Marketing?
What Is The Purpose Of Building A Channel?
Describe The Distribution Strategies To Be Adopted To Deliver The Services?
Describe the Best Case In Generating The Revenue By Using Good Distribution Program?
Describe The Steps Required To Have A Good Distribution Program?
Describe what Can Be Done To Sell A Product Through A Var (value Added Reseller) Dealer Network?
What Is The Relationship In Direct To End Users?
Describe the Distribution Channels That Exist While Marketing The Product?
What Are The Strategies Required To Attract Customers?
Discuss the Worst Case Scenario In Strategic Marketing?