Business, 22.04.2020 03:35 jasmine8142002

Suppose that you took out a student loan at a rate of 4.45%. Note that this rate is constant for the life of the loan. Next, suppose that at your first job after graduation, there are two possibilities: (i) the inflation rate is 2%, and your wages rise by 4% or (ii) the inflation rate is 3%, and your wages rise by 5%. (No, you certainly do not get a choice of inflation rates, but pretend that you can for the sake of exploring this important concept.) Briefly explain whether you would prefer the first or the second situation.

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Answer from: sim2004

(ii) the inflation rate is 3%, and your wages rise by 5%

Explanation:

As the inflation decreasethe value of money over-time

The student loan constant nominal-rate will make for a lower real-nterest on the loan. As more inflation bettter is to owe as the real burden of the liability is being halved by inflation. In the opposite side it is better not to loan at fixed rate under inflationaries economies as the capital will be destroyed.

Also, it is important the the second approach is preferable as we are given wages rise of 5% every year making them, increase higher than inflationhenceforth our real salaries increase in respect to debt in the long turn.

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

Answer from: Quest

An applicant tracking system (ats) is a software application that enables the electronic handling of recruitment needs. an ats can be implemented or accessed online on an enterprise or small business level, depending on the needs of the company and there is also free and open source ats software available.

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Suppose that you took out a student loan at a rate of 4.45%. Note that this rate is constant for the...

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