Timber is an example of a raw material that would be used in the production of a physical product.
What is a physical product?An item that can be physically handled and transported to the buyer after purchase is referred to as a physical good. Clothing, accessories, and other tangible objects are examples of physical products that you can sell to clients. Tables, chairs, laptops, smartphones, and other tangible items are examples of physical products. Because a tangible product's purpose is typically obvious and simple to explain, it is much simpler to show its worth and higher value perception.
Physical goods are actual and palpable. They are frequently connected to a higher perceived worth as a result. Convenience goods, shopping goods, specialty goods, and unsought goods are the four categories of items, and each is categorized based on consumer preferences, pricing, and product features.
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The size of a house (in square feet) can be used to model its selling price (in 1,000 dollars). What is the equation of the regression line from the output provided below?
A house's square footage can be used to estimate its selling price. = [tex]-39.81 + 0.099[/tex]
Use Selling Price ,The regression line has the generic form y=a+bx. Price is the dependent variable represented by y in this scenario. Size is the independent variable represented by x. The y-intercept is represented by a. This can be found in the output table at the estimate of the intercept. B stands for the slope. A regression line is an estimate of the line that depicts the actual, but unobserved, linear relationship between the two variables. This can be found in the output at the estimated slope. When the value of the explanatory variable is known, the regression line's equation is used to forecast the value of the response variable.
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Suppose that Bonds A and B have identical characteristics except that Bond A has a term of 10 years and Bond B has a term of 1 year. Which of the following is true about these bonds?
Bond B offers a lower interest rate than Bond A does. Because holders of long-term bonds must wait longer for principal return than those of short-term bonds, long-term bonds are riskier.
Definition of a bond?
Bonds are a common way for both corporations and governments to raise money. By buying a bond, you are lending the issuer credit, and they agree to pay you back the full face value of the loan on the due date.
Investors now have the chance to make a respectable:
living thanks to a significant increase in bond yields. By the end of 2023, inflation is projected to be around 3.5%, and 10-year U.S. Treasury bonds are currently earning more than that. By "real," I mean their adjusted for inflation.
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on november 1, bahama cruise lines borrows $5 million and issues a six-month, 6% note payable. interest is payable at maturity. determine the financial statement effects of (1) the issuance of the note and (2) the adjusting entry for interest owed by december 31, the end of the reporting period.
The issuance of a six-month note payable is being recorded. To document the period's interest expense.
The accounting entries are a debit to the Cash account for the cash received and a credit to the Note Payable account to establish the liability in the accounts. On November 1, Bahama Cruise Lines borrowed $3.5 million and issued a six-month, 9% note payable. In order to adhere to the accrual concept and the matching principle of generally accepted accounting principles, Bahama Cruise Lines shall accumulate interest on the Note Payable for 2 months for the ending. According to the accrual foundation of accounting for transactions, costs must be recorded as they are incurred rather than when money is exchanged. For the entire year, the interest will be $52,500 ($3.5 million * 9%)/12 * 2.
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Successful apps such as Groupon have increased sales of several low-profile restaurants. This is due to the use of:
A. coupons
B. packages
C. premiums
D. samples
Successful apps such as Groupon have increased sales of several low-profile restaurants. This is due to the use of coupons.
A coupon or coupon payment is the annual interest paid on a bond, expressed as a percentage of its face value, from the date of issue to maturity.
Few of the slang hunters that regularly come out of the Glaswegian tongue find the word 'voucher' instead of 'face'.
There are two types of coupons: manufacturer coupons and store coupons. Below are two examples of his coupons for the same product, but one from the manufacturer and one from the store.
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Your project can only work if you can complete it within the cost approved by the company. Fortunately, budgets ____________
Answer:
Help define standards for control, such as preventing budget overruns
Explanation:
stihl, which manufactures handheld outdoor power equipment sold to six independent u.s. distributors and six stihl-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution
Since, equipment are sold through six Stihl -owned marketing and distribution centers, it is an example of selective distribution.
A distribution tactic called selective distribution sits and functions between between intensive and the exclusive distribution. Selective Distribution includes use much more intermediates and wholesalers than just one, but less than the whole of them, to distribute the firm's goods in accordance with a certain set of principles that really are unique to the business.
These kinds of brands are primarily found in the furniture, tv, and household appliance industries. A selective distribution agreement, which would be frequently in use by premium brands trying to seek to restrict the high caliber of retailers carrying their goods, enables suppliers to assign particular distributors in accordance with their unique needs.
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Entrepreneurs need to remember that ____ costs are the biggest costs the business will bear.
Entrepreneurs need to remember that employee costs are the biggest costs the business will bear.
An entrepreneur is someone who has a concept and who works to create products or services that humans will buy, in addition to an company to support that attempt. Entrepreneur takes on most of the chance and initiative for their new commercial enterprise and is regularly visible as visionary or innovator.
An entrepreneur is a French word in all likelihood coined by the economist Jean-Baptiste Say from the word entrepreneur, which is normally translated as "undertaker" or "adventurer."1 Say studied Smith's e-book and, whilst agreeing on all points, observed that the omission of enterprising businessmen becomes a critical flaw.
The entrepreneur is defined as a person who has the capability and choice to set up, administer and succeed in a startup undertaking alongside chance entitled to it, to make profits. The best example of entrepreneurship is the beginning of a brand-new business mission.
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which of the following lists forms of economic integration in order from the lowest level of economic integration to the highest?
It is as follows: free trade, customs union, common market, economic union, political union.
What is free trade?A strategy wherein a government refrains from discriminating against imports or interfering with exports by enforcing taxes or subsidies (on imports) (to exports). However, a free-trade policy does not automatically entail that a nation gives up all control and taxes over imports and exports.
The foundation of the theoretical case for free trade is Adam Smith's claim that the specialization, increased efficiency, and increased aggregate production that result from the division of labor across nations. (Learn about comparative advantage.) A single nation may see practical benefits in trade restrictions, especially if it is the primary buyer or seller of a specific item. In reality, however, only a small portion of the population could benefit from the preservation of local enterprises.
What are taxes?Taxes are compulsory payments made by a government organization, whether local, regional, or federal, to people or businesses. Tax revenues are used to fund a variety of government initiatives, such as Social Security and Medicare as well as public infrastructure and services like roads and schools.
Taxes are borne by whoever bears the cost of the tax in economics, whether this is the entity being taxed, such as a business, or the final users of the items produced by the firm. Taxes should be taken into consideration from an accounting standpoint, including payroll taxes, federal and state income taxes, and sales taxes.
It is as follows: free trade, customs union, common market, economic union, political union.
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T/F. a blend of more advertising and sales promotion and less personal selling is useful when the target market is informed, loyal to the product in question, and geographically widely scattered.
it's true. When the target market is well-informed, devoted to the product in issue, and dispersed geographically, a mix of more advertising and sales promotion and less personal selling is helpful. is true.
Advertising refers to the methods used to draw attention to a good or service. In order to attract consumers' attention, advertising seeks to highlight a good or service. It is often used to market a particular product or service, although there are many other applications as well, with commercial advertising being the most popular. Through "branding," which links a product name or image with particular traits in customers' minds, commercial advertising frequently aim to boost consumption of their goods or services. Direct-response advertising, on the other hand, is the term used to describe advertisements that aim to prompt a quick sale. Political parties and interest groups are examples of non-commercial organizations that market more than goods or services for consumers.
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which of the following types of property are ineligible for like-kind treatment? (check all that apply.)Inventory held for resale.
Partnership interests are types of property that are ineligible for like-kind treatment
What is a like-kind treatment?Generally, In general, a like-kind swap may be done with any real estate property that is held for productive use in the trade or company, or that is held for investment purposes.
A taxpayer will not have to pay tax on the first disposal of investment property if they sell one piece of property and acquire another within the allotted amount of time after the initial sale.
If two properties have the same nature or character, although having different grades or qualities, then those properties are said to be of the same "kind."
Whether a piece of real estate has been developed or left in its natural state, it is still considered to be of the same sort. For instance, a similar-kind structure, such as an apartment building, is often analogous to another apartment building.
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CQ
Which of the following types of property are INELIGIBLE for like-kind treatment? Can be more than one answer
A) Land held outside the U.S
B) Equipment used in a trade or business
C) Stocks and bonds held for investment
D) Inventory held for resale
E) Partnership interests
F) Land held for investment
G) Real property used in a trade or business
a sales tax is deemed______ because everybody pays at the same rate, but the more you make, the lower the percentage of your income that goes to buying items and paying sales tax.
Because everyone pays the same amount, a sales tax is considered regressive; nevertheless, the more money you earn, the less of your income is used for both purchasing goods and paying the sales tax.
The government gets billed a levy known as a sales tax when specified goods and services are sold. Ordinarily, laws permit the merchant to charge the customer's credit card for the tax at the time of purchase. Use taxes are sometimes used to refer to taxes on goods and services that consumers pay directly to a governing authority. The sale and use tax is frequently exempted for a variety of goods and services, including food, education, and healthcare. A sales tax is similar to a value-added tax (VAT), which is levied on goods and services. Important differences are revealed when compared to sales tax.
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You have just discovered a $1,000 par value corporate bond with a maturity of 10 years. The bond's yield to maturity is 9% and the bond is currently selling for $743.29. What is the bond's annual coupon rate (the bond pays coupon payments annually)?
After using the TVM Calculation, the bond's annual coupon rate is 5%.
In the given question,
You have just discovered a $1,000 par value corporate bond with a maturity of 10 years.
The bond's yield to maturity is 9% and the bond is currently selling for $743.29.
We have to find the bond's annual coupon rate.
The coupon rate of a bond or other fixed income instrument is the interest rate paid on the bond. The interest rate is set when a firm or the government issues a bond. The coupon bond rate shows the annual interest rate, expressed as a percentage, that the bond pays about the face value each year.
Bond Par Value(FV) = $1000
Bond Current Value (PV) = $743.29
Yield to Maturity of Bond (I) = 9%
Time for Maturity (T) years = 10 years
To calculate the Coupon Rate,
By TVM Calculation,
PMT(Payment) = [FV=1000, PV=743.29, T=10, I=9%]
PMT = 50%
So,
Bond’s annual coupon rate = PMT/T
Bond’s annual coupon rate = 50/10
Bond’s annual coupon rate = 5
Therefore, the bond's annual coupon rate is 5%.
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Company goals may be slightly different across organizations, but all __________ firms must eventually _____________.
A. for profit / maximize profitability
B. manufacturers / become effective
C. non-profit / provide a useful service
D. successful / provide good customer service
E. service / provide good customer service
bug-off exterminators provides pest control services and sells extermination products manufactured by other companies. following is the company's unadjusted trial balance as of december 31, 2019.
The day sales in inventories are 84.23 days
Days Sales in Inventory = 365 / Inventory Turnover RatioInventory Turnover Ratio = Cost of Goods Sold / Average Inventory = 65000 / 15000= Days Sales in Inventory = 365 / (65000 / 15000) = 84.23 daysThe products and materials that a company keeps on hand with the intention of reselling, producing, or using them are referred to as inventory or stock. The main focus of inventory management is determining the location and shape of stocked commodities.To know more about inventory here
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Match each inequality or equality to the corresponding term for the monopolistic competitor operating at optimal, short-run production levels. Drag each item on the left to its matching item on the right. short-run economic profit price = average total cost" price > marginal revenue short-run economic loss price < average total cost" market power price > average total cost (ATC) zero economic profit price > marginal cost markup
Pure monopoly and pure competition are the opposing limiting cases. Monopolistic competition exists between those two.
Monopolistic competition is distinguished by the fact that, despite being closely related to one another, the products of various firms are not all the same but rather differ from one another. As numerous businesses compete to sell their products, there is also a component of competition.
Price=Average Total Cost Total Revenue is equal to total cost so there
is zero economic profit.
Price>ATC It means that firm is earning short run
economic profit.
Price<ATC It means firm is earning Short Run Economic
Loss
Price> Marginal Revenue It means firm has market power
Price>Marginal Cost Mark up
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Concord Company has 930 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2018, No dividends have been paid on this stock for 2017 or 2018. Dividends in arrears at December 31,2018 total $0. $9300. $4650. $500.
Concord Company has 930 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2018, no dividends have been paid on this stock for 2017 or 2018, Since no dividend is paid, Dividends in arrears at December would be $0.
What is meant by dividend?
A dividend is a payment made by a corporation to its shareholders that is decided by the board of directors. Dividend payments are frequently made quarterly and might take the form of cash payments or stock reinvestments.
The dividend yield, which is the dividend per share, is stated as a percentage of the share price of a corporation, for example, 2.5%.
If a common shareholder of a dividend-paying company owns the shares on the ex-dividend date or earlier, they are eligible to receive a payment.
By using their voting powers, shareholders must approve dividends. Despite the fact that stock dividends are less prevalent than cash dividends, they are still a possibility. Different exchange-traded funds (ETFs) and mutual funds also provide dividends.
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nce an ethically ambiguous tactic is employed, the negotiator will assess consequences on three standards. which of the following is not one of those standards
Once an ethically ambiguous tactic is employed, the negotiator will assess consequences on three standards whether the tactic worked in the past.
What are the four criteria used to assess business and negotiating methods and strategies?End-result ethics, duty ethics, social contract ethics, and personalistic ethics are the four criteria used to assess business and negotiating strategies and methods. The way one approaches these principles is said to be reflected in the ethical decisions one makes.
A method may be morally dubious more frequently than it is purely unethical. That is, depending on a person's ethical thinking and the situation, the technique may or may not be wrong. For instance, even if a particular activity may be against the law, the person does not view it as unethical.
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a woman owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. she wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. which of the following types of access rights would provide the greatest protection for a prospective lot purchaser?
A woman for rights would that which give the best protection for a lot purchaser by the appurtenant easement.
The appurtenant easement in a land law through this law of property the women have to access, this law gives right or use of property that gives benefits of the other land.
The property that gives the appurtenant easement is considered as the servant property while the other property takes benefit from the easement is the dominant property.
The women owns that acres area on a desirable re-creational lake. The women should choose the rights which gives her best protection on the property relations.
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Which of the following is an example of a control activity that satisfies the accuracy control objective for sales invoices?Invoice quantities are compared to shipment and customer order quantities
Invoice quantities are compared to shipment and customer order quantities, is an example of a control activity that satisfies the accuracy control objective for sales invoices.
What is accuracy ?Accuracy and precision refers to the two measures of observation error. Accuracy indicates how close a given set of measurements are to the true value, and precision indicates how close the measurements are to each other. In other words, precision is a description of random error and a measure of statistical variability. Accuracy is the degree of closeness between a measured value and its true value. Precision is the degree to which repeated measurements under the same conditions yield the same results. Accuracy refers to how close a measurement is to a standard or known value. For example, if a particular material weighs 3.2 kg in a laboratory, but the actual or known weight is 10 kg, the measurement is not accurate.In this case the measured value is not close to the known value.To learn more about accuracy from the given link :
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channel stuffing is: group of answer choices waiting to ship out products until the beginning of the year waiting to ship out products until you are certain they will be sold shipping out products at the end of the year to increase revenue, even if they are likely to be returned shipping out products at the start of the year even though it is certain that there would be more demand during the year
Channel stuffing usually occurs right before a reporting period, such as quarter-end or year-end, in order for management, who is worried about negative effects on their salary, to "make their numbers."
How Does Channel Stuffing Operate?Channel stuffing is the practise of sending more products than customers are likely to purchase in a reasonable amount of time to distributors and retailers throughout the distribution channel. This is typically accomplished by providing distributors and retailers with enticing incentives to buy larger quantities than they currently require, such as steep discounts, rebates, and longer payment terms.
In other words, stuffing always catches up with the business since it can't continue to stuff sales at that rate. Channel stuffing occurs not just in the wholesale and retail sectors of the economy, but also in the industrial, high-tech, and pharmaceutical sectors. A corporation found guilty of channel stuffing in 2016 is an egregious example is Valeant Pharmaceuticals.
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The price of a video is $3 and the price of a dinner is $9. From this we know that a consumer who is maximizing utility will a. Buy enough of the two goods such that the marginal utility from the last dinner consumed is three times greater than the marginal utility from the last video. b. Buy three times as many dinners as videos. c. Buy rnough of the two goods such that the marginal utility from the last vide is three times greater than the marginal utility from the last dinner consumed. d. Buy three times as many videos as dinners.
The correct answer is C. Buy enough of the two goods such that the marginal utility from the last dinner consumed is three times greater than the marginal utility from the last video. Marginal utility is additional satisfaction that is received when one consumes an additional unit of a good.
In economics, the software is the satisfaction or benefit derived from eating a product. The marginal utility of an awesome or carrier describes how plenty of satisfaction or delight is won by way of purchasers because of the growth or lower in intake by using one unit. There are three varieties of marginal utility.
Marginal application is the delivered satisfaction that a consumer gets from having one extra unit of a good or service. The concept of marginal software is used by economists to determine how a good deal of objects purchasers are inclined to buy. In other words, a bad marginal application indicates that each unit of goods or carrier ate up will do extra damage than suitable, to be able to result in the lower of average software degree, whilst the tremendous marginal utility shows that every unit of products or services consumed will boom the overall software stage.
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quantities are 4,000, 3,000, 7,500, and 3,000 for products a, b, c, and d, respectively. (round your answer to the nearest integer.)
The Paasche index for year 5 if products quantities are 4,000, 3,000, 8,000, and 3,000 for products A, B, C, and D, respectively is 167.
Paasche price index or Paasche index is one of consumer price index used to measure the change in the price and quantity of a basket of products relative to a base year price and quantity. Paasche index calculates inflation and how it impacts the consumer purchasing patterns
Paasche price index could be calculated using this formula:
Paasche price index = ∑(Pi,t) x (Qi,t) x 100
∑(Pi,0) x (Qi,0)
where:
Pi,0 = price of individual item at base year
Pi,t = price of individual item at observation period
Qi,t = quantity of individual item at observation period
From the case, we know that:
Products Q5 S1 S5 Q5xS1 Q5xS5
A 4,000 10.50 15.90 42,000 63,600
B 3,000 16.25 33.00 48,750 99,000
C 8,000 12.25 18.40 98,000 147,200
D 3,000 20.00 35.50 60,000 106,500
Total 248,750 416,300
Using the Paasche price index formula, we get:
Paasche price index = 416,300 x 100
248,750
Paasche price index = 167.36
Paasche price index ≈ 167
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Complete Question:
A certain manufacturing company has the following data on quantities shipped and unit costs for each of its four products
(in the attached picture bellow)
Use the price data to compute a Paasche index for the shipping cost if year 5 quantities are 4,000, 3,000, 8,000, and 3,000 for products A, B, C, and D, respectively (Round your answer to the nearest integer).
I5 =
looking at the unemployment rates of scientists and engineers in 2017, the rates for both women (2.9%) and men (2.6%) were lower than that of the u.s. labor force (4.4%), indicating a strong demand for those with s
Unemployment was lower among the STEM labor force (2%) compared to the non-STEM labor force (4%) in 2019, and this pattern persisted even during the COVID-19 pandemic.
Unemployment, in step with the OECD (organisation for economic Co-operation and development), is human beings above a certain age (generally 15) [2] now not being in paid employment or self-employment but currently to be had for paintings for the duration of the reference period. Unemployment is measured through the unemployment charge, that is the wide variety of folks that are unemployed as a percentage of the labour pressure (the overall quantity of people employed delivered to those unemployed). Unemployment can have many resources, such as the subsequent: new technologies and inventions the repute of the economy, which can be inspired by using a recession.
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High government expenditures can lead to a bigger: (i) revenue. (ii) stimulus. (iii) deficit. (iv) surplus.
High government expenditures can lead to a bigger: (ii) stimulus.
In physiology, a stimulus is a detectable alternate inside the physical or chemical structure of an organism's internal or external environment. The capacity of an organism or organ to discover outside stimuli, in order that the perfect response may be made, is referred to as sensitivity. A stimulus is something that may cause a bodily or behavioral change. The plural of stimulus is stimuli. Stimuli may be outside or inner. An example of external stimuli is your body responding to a remedy.
A stimulus causes a movement or response, just like the ringing of your alarm clock in case you did not sleep thru it. Stimulus is a word regularly utilized in biology — something that causes a response in an organ or cellular, for example.
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Which of the following Human Resources activities can build a sustainable competitive advantage for retailers? a.compensation and incentives b.benefit programs c. selective hiring and training d. work-life balance programs
The correct response is c. selective hiring and training. Selective hiring and training Human Resources activities can build a sustainable competitive advantage for retailers
The group of individuals that make up an organization's, business sector's, industry's, or economy's workforce is known as human resources (HR). Human capital, or the knowledge and abilities that people possess, is a more specific idea. Manpower, labour, personnel, colleagues, or simply "people" are comparable concepts. An organization's human resources department (HR department) manages human resources, supervising a variety of employment-related tasks like ensuring that labour laws and employment standards are followed, conducting interviews and selecting employees, managing performance, administering employee benefits, organizing employee files with the necessary paperwork for future use, and managing some aspects of recruitment (also known as talent acquisition) and employee offboarding. They act as a liaison between a company's management and its workers.
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which are the keys of enterprise design thinking? choose one speed bumps, hills, mountains sponsor users, hills, playbacks share backs, hills, sponsor clients
The keys of enterprise design thinking are Hills, Playbacks, Sponsor users.
Enterprise design thinking is a crucial part of the business techniques which enables the creation of innovative ideas which helps to distinguish between the products of different companies and also attracts the customers. It is based on user oriented outcomes, multidisciplinary efforts nd loop processes for new inventions. The utility of keys are that Hills are used to align the employee as teams, playbacks align across time setting and sponsor users align with the user's reality interface. In enterprise design thinking, some most essential steps are Discover, Define, Develop and Deliver. It enables to understand the customers, explore their requirements and evaluate the processes as per demand.
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the fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves. True or False ?
True, the fact that many inputs are fixed in the short run but variable in the long run has little impact on the firm's cost curves.
What is cost?In manufacturing, research, retail, and accounting, cost is monetary value that is no longer available because it was used to produce something or provide a service. In business, acquisition costs can be acquisition costs. In this case, the amount spent on the acquisition is counted as an acquisition cost. Cost is the amount of money a business spends to create or produce goods or services.This does not include the profit markup.Cost Per Action (CPA) is calculated as the cost divided by the number of actions measured.For example, if you spend $150 on a campaign and the campaign has 10 actions assigned to it, the campaign receives a per-action cost of $15.To learn more about cost from the given link :
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with reciprocal task interdependence, individual levels of performance are______for managers to identify.
Individual levels of performance are frequently easy, occasionally easy, and frequently challenging for managers to identify when there is reciprocal task dependency.
Make sure your team is productive and giving their best effort as a manager if you want to succeed. Because team members may have diverse demands and work styles, this can be difficult. This article examines the top 5 difficulties that managers encounter, according to their reports: having a defined strategy or vision for the team. listening and sharing information while communicating effectively. supporting professional growth and discussing output.
Getting to know the team's members will be the hardest obstacle. I'm accustomed to leading a sizable, diversified team and take great pleasure in bringing out the best in each of my coworkers. Or: "Keeping up with technical progress in this industry is the main challenge in this career.
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When a transfer price decreases:
1. the costs of the division using the intermediate product will fall
2. the revenues of the division using the intermediate product will rise
3. the costs of the division making the intermediate product will fall
4. the profits of the division using the intermediate product will rise
5. both A&D
When components are manufactured internally, they must be priced as they move between departments. Market-based pricing can be used, prices can be set internally, and departments can negotiate prices.
When a transfer's cost goes down: c. The division that makes use of the intermediate product will make more money, and d. The division that makes use of the intermediate product will pay less money.
A lower price when one division buys from another will increase the revenue and profits of the buying division, just as purchasing components from another company at a lower price will reduce costs and increase profit.
What effect does transfer pricing have?The establishment of prices for the goods and services traded between subsidiaries, affiliates, or commonly controlled businesses that are a part of the same larger enterprise is made possible by transfer pricing. Corporations may be able to save money on taxes through transfer pricing, but tax authorities may challenge their claims.
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Last year, Jane spent all of her income to purchase 200 units of corn at $5 per unit. This year, she spent all of her income to purchase 200 units of corn at $6 per unit. Jane's nominal income decreased this year, and her real income decreased. Both her nominal and real income remained unchanged. Jane's nominal income increased this year, but her real income remained unchanged.Jane's nominal income increased this year, but her real income decreased.
Jane's nominal income increased this year, but her real income remained unchanged. (third option)
What is real income and nominal income?Income is the monetary compensation that is received by a worker for services rendered.
Nominal income is the income of a person that is calculated using current year prices.
Nominal income of Jane last year = units of corn bought x price per unit 200 x $5 = $1000
Nominal income of Jane this year = units of corn bought x price per unit
$200 x $6 = $1200
Change in nominal income = $1200 - 1000 = $200
Nominal income increased by $200.
Real income is the earnings of a person that has being adjusted for inflation. Real income is measured in terms of the purchasing power of the income. Jane's income last year and this year is still buying the same units of corn. This means that the real income has remained unchanged.
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