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Find the highest interest rate:
There are 2 entrepreneurs, Sally and Paul. The return to their projects are given by:
To finance the project, each entrepreneur needs to borrow from a bank an initial capital of 100. The loan contract stipulates that if the project return is high, then the firms pays principal plus interests, and if the project return is low, then the bank seizes whatever value that the firm has left over. Find the highest interest rate at which Sally is willing to borrow, the highest interest rate at which Paul is willing to borrow, and the bank's expected net profit if the interest rate is 10% and 18%, respectively.
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What are the main causes of unemployment? Two main paths are available; demand-deficient unemployment and real wage unemployment. After explaining unemployment (percentage o
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The prevention of major swings in economic activity can be handled most easily by the
Explain how automatic (fiscal) stabilisers may help to lower fluctuations in the business cycle. Definition of automatic stabilisers as built-in to the system in terms of trans
U+v, UV, u/v
What are the major differences between the equilibrium of profit maximiser and sales revenue maximiser?
what is the theory of supply
DETERMINATION OF EXCHANGE RATES: When we study the determinants of exchange rates, we must distinguish between long run determinants and short run because the determinants in
Dividends:Several companies pay a cash dividend (annually orquarterly) to the owners of its shares. This is an enticement to investors to buy that company's shares and signifies a
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