DISCUSSION ECO 100
- Imagine that you have a fixed 30-year interest rate for your mortgage, and the economy has experienced unanticipated inflation. Examine who the winner and loser would be. Is it the borrower or the lender in the given scenario? Provide support for your response.
Respond to studnet
- An unanticipated inflation is when a inflation is different from the what was originally expected. If the borrower has a fixed 30 year interest rate for their mortgage, I would say the lender would be the loser if the economy experiences a unanticipated inflation. The fixed interest rates are typically not affected by the unanticipated inflation that the economy may face. But at the same token, if the borrower had accepted an non fixed interest rate then the lender would become the winner in this scenario. If the economy experiences any unanticipated inflations either party could be winners or losers.
Discussion LEG 100
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- A friend has asked you to help her decide how to protect her soon-to-be-opened bakery from liability, while still maintaining a business structure that fits her needs. Compare and contrast two (2) different possible business entities that would be suitable for her and explain why. Be sure to support your response with legal reasoning.
- I will tell my friend to choose Sole Proprietorship or Partnership for her small business she’s about to open. I picked Sole Proprietorship because it’s best for small businesses with small capital. The bakery will have one owner and don’t have to share any assets earned. She wouldn’t have to hire a lawyer and she don’t have to register with the state. Starting her business will cost less and she will have a lot of tax breaks. She would have to file personal taxes on profit earned but the business wouldn’t have to file separate taxes. As the owner she will be responsible for all debt and liabilities.I also would tell her to try to partner with another co-owner. Starting her small business with an partner will be easy to form. She will share profits and liability. Both partners will be responsible for negligence, losses and injuries. They will also have to file taxes on their personal return. This would help her with managing the business. She would share the management roll which will help with daily responsibilities. The financial part may or may not be easy to raise capital. Having a partner may be easier to get a loan. Also the co-owner may be able to help you financially with raising capital with their own money. Having a partner can be good if you follow the rules and always be on the same page.