The main difference between a real shock and a nominal shock is that A. a real shock is a disturbance to the real side of the economy that affects the IS curve or the FE line, while a nominal shock is a disturbance to money supply or money demand that affects the LM curve. B. a real shock only affects the real interest rate, while a nominal shock affects the nominal interest rate. C. a nominal shock is a disturbance to the economy that affects the IS curve or the FE line, while a real shock is a disturbance that affects the LM curve. D. a real shock represents a really large disturbance to the economy, while a nominal shock represents a relatively small or minor disturbance. According to the real business cycle theory, which one of the following shocks is not considered to be a productivity shock? A. Changes in the real demand for money. B. Development of new products or production methods. C. Introduction of new management techniques. D. Changes in the quality of capital, labor, or raw materials.

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?

Kelso electric is debating between a leveraged and an unleveraged capital structure. the all equity capital structure would consist of 40,000 shares of stock. the debt and equity option would consist of 25,000 shares of stock plus $280,000 of debt with an interest rate of 7 percent. what is the break-even level of earnings before interest and taxes between these two options?