Answer:
Demand; Quantity Demanded
Explanation:
According to the law of demand,
Law states that there is a negative or inverse relationship between the price of the good and the quantity demanded for that good which means that an increase in the price of a good will result in a fall in quantity demanded for that good and a decrease in the price level of the good will result in an increase in the quantity demanded for that good.
In our case, the price of eggs falls from $5 per dozen to $4 per dozen then as a result there is an increase in the quantity demanded for the eggs.
Final answer:
The law of demand states that a decrease in the price of a good leads to an increase in the quantity demanded. When the price of eggs drops from $5 to $4 per dozen, the quantity demanded is expected to increase as consumers are more willing to purchase at the lower price.
Explanation:
According to the law of demand, when the price of a good decreases, the quantity of the good demanded increases. This principle is based on the tendency of consumers to purchase more of a good when its price is lower if all other factors remain constant. Therefore, when the price of eggs decreases from $5 per dozen to $4 per dozen, we should expect the quantity demanded to increase.
In economic terms, the decrease in the price of eggs leads to a movement along the demand curve to the right, indicating a higher quantity demanded. This concept is essential in understanding how markets reach equilibrium. When there is a price change, it affects both consumer behavior (demand) and producer behavior (supply), creating movements toward a new equilibrium if nothing else changes.
Using the coffee example, when the price of coffee is lowered to $2, the quantity demanded increases, but with the incentive for producers to produce lessening, a shortage or disequilibrium may occur. On the other hand, if the price of coffee increases to $7 per pound, the new equilibrium leads to a lower quantity demanded. In the case of the eggs, the lower price will likely lead to more eggs being demanded by consumers.
Your friend Sam has been asked to prepare appetizers for a university reception during homecoming weekend. She has an unlimited amount of ingredients but only six hours to prepare them. Sam can make 300 mini-sandwiches or 150 servings of melon slices topped with smoked salmon and a dab of sauce per hour. Draw Sam's production posiibilities frontier.
Answer:
Downward sloping curve with 300 intercept on mini sandwich axis, 150 intercept on melon spices
Explanation:
PPC reflects production combinations (2 goods), which can be produced given same resources & technology. It is downward sloping because of inverse relationship between two goods, one good increase leads to other good decrease - given same resources & technology.
In this case, it is with analogous factors : production possibilities with respect to unlimited ingredients (resources), limited time. Although resources are given to be unlimited, PPC is likely to be downward sloping : because of inverse relationship between goods - based on time constraint (one good increase will withdraw time from other good & reduce it).
The PPC intercept on X & Y axis represents the maximum amount of that axis good, which can be produced. So: it has 300 intercept on mini sandwich axis, 150 intercept on melon spice axis.
The slope & shape of PPC depends on Marginal Opportunity Cost, which depends on relative efficiency of resources in two goods.
Resources equally efficient - Constant Good Sacrifise Ratio i.e MOC - PPC straight line. Resources unequally efficient - Increasing Sacrifise Ratio (from efficient to inefficient good) i.e MOC rising - PPC Concave. Increasing Sacrifise Ratio (from inefficient resources to efficient resources) i.e MOC falling - PPC Convex.
If MOC between mini sandwiches & melon spices is constant, PPC is straight line . If MOC between them is rising, PPC is concave. If MOC between them is falling, PPC is convex.
Sam's Production Possibilities Frontier can be graphed by plotting the amount of mini-sandwiches (300 per hour) and servings of melon slices (150 per hour) she can make in the 6-hour period. The graph will illustrate the various combinations of these two appetizers Sam can make with her limited time.
Explanation:The task involves deriving Sam's Production Possibilities Frontier (PPF), a graphical representation showing the maximum number of different combinations of goods/services that can be produced in a fixed amount of time with a given number of resources, assuming all resources are fully utilized.
In this case, Sam can either prepare mini-sandwiches or melon slices topped with smoked salmon. She has a finite amount of time -6 hours, but the ingredients are unlimited. Sam can make 300 mini-sandwiches or 150 servings of melon slices per hour.
Plotting these on a graph, where the x-axis represents the amount of mini-sandwiches and the y-axis represents the servings of melon slices, will yield Sam's PPF. The points moving from the origin to the upper-right indication a combination of sandwiches and melon servings Sam can produce in 6 hours.
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If supply is inelastic, then a demand shift will have a ____ effect on _______ than on quantity.
Answer:
Supply Inelastic: Demand shift will have more effect on price than on quantity
Explanation:
Demand and supply reflect buyers & sellers - buying & selling tendencies.
Demand curve & supply curve are downward sloping & upward sloping respectively (∵law of demand , law of supply) & EQUILIBRIUM is where Demand = Supply & Demand, Supply curves intersect.
Elasticity is demand / supply responsiveness to price change. Inelastic Supply doesn't respond to price. It has a vertical curve parallel to y axis (unlike usual upward sloping curve).
Demand change shifts downward sloping demand curve - 1. Rightwards if Increase in Demand, 2. Leftwards if Decrease in Demand. 1st case (↑Dd) with inelastic supply leads to increase in price & no change in quantity, at new equilibrium. 2nd case (↓Dd) with inelastic supply leads to decrease in price & no change in quantity, at new equilibrium.
So, Change in Demand with Inelastic Supply changes only Equilibrium Price & not Equilibrium Quantity.
Received contributions of $ 10 comma 000$10,000 in exchange for common stock. a. Increase asset (Cash) ; Increase equity (Common Stock) b. Purchased equipment for $ 5 comma 000$5,000 on account.
Answer:
The answer is stated below:
Explanation:
A. Received or collected $10,000 in exchange of the common stock:
This transaction will have an impact on the Accounting Equation of the Accounts, which is :
Assets = Liabilities + Equity
As the cash is received, there will be an increase in the assets and under the cash account of the current assets. Though the cash is against the common stock, which increases the common stock account upon the side of the equity.
Therefore, it will be:
Increase in assets (Cash) : Increase in equity (Common Stock)
B. Bought the equipment on account worth $5,000.
This transaction will have an impact on the Accounting Equation as:
As the equipment is purchased will in turn lead to increase in the assets side, under the equipment account and it is purchased on account, which means on credit, that leads to increase in the liability under the Accounts Payable account.
Therefore, it will be:
Increase in assets (Equipment) : Increase in Liability (Accounts Payable)
The name of the Nobel prize-winning economist who argued against the Tragedy of the Commons thesis is ________.There is a short reading about this person in the Unit 4. Know it well, especially what she identifies as the critical component in the sustainable management of natural resources. Is it nationalization, privatization or something else?
Answer:
1) The correct word for the blank space is: Elinor Ostrom.
2) The correct answer is: Sharing common resources.
Explanation:
1 )Elinor Ostrom was born in Los Angeles, California -the U.S., on August 7th, 1933. Ostrom was an American politician who won the Nobel Prize in Economic Sciences in 2009 shared with Oliver E. Williamson (born in 1932) for her "analysis of economic governance, especially the commons".
2) Ostrom disagreed with the idea that central government management or the rights to private property are the only way to avoid the "Tragedy of the commons". After her research, Ostrom concluded that when individuals use natural resources jointly, along the time rules on how resources must be taken care of and used are established economically and sustainably.
Classify each statement as true or false by dragging it into the corresponding category.
- When two countries choose to partake in international trade, it is a mutually beneficial activity for both countries.
-Through specialization and trade, it is possible for a country to consume a combination of goods that is beyond its original production possibilities frontier.
-Wealthier countries always benefit more from international trade than poorer countries do
- Countries trade for goods in which they do not have a comparative advantage, and therefore, would never trade with nations that have similar resource endowments.
Through specialization and trade, it is possible for a country to consume a combination of goods that is beyond its original production possibilities frontier - is a TRUE statement as import facilities make it possible to have goods from any part of the world.
Wealthier countries always benefit more from international trade than poorer countries do - is a FALSE statement as the benefit depends on the profitability of the trade.
Countries trade for goods in which they do not have a comparative advantage, and therefore, would never trade with nations that have similar resource endowments - is a FALSE statement as countries actually choose to trade in commodities that dispense comparative advantage so as to gain more profits.
Finance professionals make decisions that fall into three distinctive areas: corporate finance, capital markets, and investments.
Below is a set of decisions made by finance professionals. Categorize the decisions according to the area of finance to which they belong.
1. Radford is a small company that manufactures automobile bearings. Managers at the company must make decisions on the kind and the cost of equipment to buy.
2. Chris works for a financial advising firm. he must create a financial plan and come up with a list of securities that his client can invest in. Chris must make decisions regarding the investments that he should recommend to his client to include in his or her portfolio.
3. Brandon works for an investment bank and makes decisions about the sale of new common stock by ABCL Inc.
Answer:
1. Radford is a small company that manufactures automobile bearings. Managers at the company must make decisions on the kind and the cost of equipment to buy - Investments.
2. Chris works for a financial advising firm. he must create a financial plan and come up with a list of securities that his client can invest in. Chris must make decisions regarding the investments that he should recommend to his client to include in his or her portfolio - Corporate Finance.
3. Brandon works for an investment bank and makes decisions about the sale of new common stock by ABCL Inc. - Corporate Finance.
Explanation:
(1) Option no. 1 relates to the decision making with respect to production equipments. This decision making falls into the category of Capital budgeting (fixed assets investing) decisions. These kind of decisions are investing decisions and thereby will fall under investments domain.
(2) Option no. 2 majorly relates to the functioning of important functions by an financial advising firm, which are necessary for its value creation. Hence, the decision will fall under Corporate Finance and not in Capital markets domain, as making a financial plan for portfolio recommendation to clients is the major activity of any Financial Advising firm.
(3) Option no. 3 again relates to the decision making by an investment bank, which is at the heart of its operations i.e. Initial Public Offer or Follow on Public Offer advisory to a firm. Hence, the decision making falls under Corporate Finance.
Moss and Barber organize a partnership on January 1. Moss’s initial net investment is $75,000, consisting of cash ($17,500), equipment ($82,500), and a note payable reflecting a bank loan for the new business ($25,000). Barber’s initial investment is cash of $31,250.
Prepare journal entries to record
(1) Moss’s investment and
(2) Barber’s investment.
Answer:
journal entries are as given below
Explanation:
solution
journal entries are as
first we get here investment by Moss
date account title debit credit
January 01 cash $17500
equipment $82500
note payable $25000
Angela Moss capital $75000
and now we get investment by barber
date account title debit credit
January 01 cash $31250
autumn barber capital $31250
Final answer:
Journal entries are made to record Moss's cash and equipment investment, accounting for a note payable, and Barber's cash investment, crediting each partner's capital account in the new partnership.
Explanation:
To record the investments of Moss and Barber in the partnership, journal entries are necessary to reflect each partner's contribution to the business. The following are the journal entries required:
Moss's investment:
Debit Cash $17,500Debit Equipment $82,500Credit Notes Payable $25,000Credit Moss's Capital $75,000Barber's investment:
Debit Cash $31,250Credit Barber's Capital $31,250These journal entries accurately reflect the cash, equipment, and note payable brought in by Moss and the cash investment by Barber, thereby establishing their respective capital accounts in the partnership.
Imagination Museum is holding nominations for its board of directors. It is the first time that over half of the positions are vacant, due to either retirements or term expirations. The new CEO wants to be sure that the board is representative of the community, as well as the patrons who attend most of the events. ,Which of the following considerations are important for a good board?a. racial balance b. financial balance c. religious/cultural balance d. educational attainment balance e. gender balance
Answer:
Gender Balance
Explanation:
Since, it helps in maintaining the culture with exchange of the ideas and views at the same time respecting other set of thoughts for the board development. It is also a sign of neutrality that gives positive impact. Lastly, representation for the community need to be fulfilled with all sets of the individuals in terms of gender for a healthy and amicable atmosphere
Mr. and Mrs. Underhill operate a hardware store in a jurisdiction that levies both a sales tax on retail sales of tangible personalty and an annual personal property tax on business tangibles. The personal property tax is based on book value as of December 31. This year, Mr. and Mrs. Underhill purchased $840,000 of inventory for their store.
(a) Are Mr. and Mrs. Underhill required to pay sales tax on the purchase of the inventory?
(b) How can Mr. and Mrs. Underhill minimize their personal property tax by controlling the timing of their inventory purchases?
Answer:
Sales Tax:
Sales tax is levied only on retail sales. Since the inventory is purchased by Mr. & Mrs. CS for their store, it will not qualify to be a retail sale. Property tax is calculated on the property. In our question, property tax will be calculated on the book value as on 31st December.
Step-I: Solution to the problem where sale is not a retail sale:
No, Mr. and Mrs. CS are not required to pay any sales tax on the purchase of inventory, since it is purchased for store and not qualifies to be a retail sale.
Step-II: Property Lax liability on Inventory:
Now, Mr. and Mrs. CS will be required to pay property tax on the book value of inventory left on 31st December. They can minimize their property tax liability by adjusting the time of their purchases. If they could have purchased the inventory in January, then the inventory could have been sold throughout the year and the book value of the stock left as on 31st December would have been lesser. Thus, the amount of tax would also be lesser
Janson Corporation Co.'s trial balance included the following account balances at December 31, 2016: Accounts payable $26,700 Bond payable, due 2025 23,800 Salaries payable 17,800 Note payable, due 2017 21,700 Note payable, due 2021 41,700 What amount should be included in the current liability section of Janson's December 31, 2016, balance sheet?
Answer: $ 66,200
Explanation:
Payables which are due for payment within a one year period from the balance sheet date are considered as current liability. The amounts to be considered in the current liability section of the balance sheet are as follows:
Accounts Payable $ 26,700
Salaries Payable $ 17,800
Note payable Due 2017 $ 21,700
Total Payables in CL $ 66,200
The Bond payable due in 2025 of $ 23,800 and Note Payable due 2021 of $ 41,700 are not considered as they are payable beyond one year from date of balance sheet
The PMO is used to maintain and provide a cadre of skilled and trained project professionals as needed under the:
A) Control tower model.
B) Cadre model.
C) Weather station model.
D) Resource pool model
Answer:
D) Resource pool model
Explanation:
The Resource Pool is a set available to define project tasks. The resource pool can be assigned to only one project or task, or can be shared by several projects. A resource may be part of a separate resource list for multiple projects, or a single resource can be part of a common resource pool. Automation of project management facilitates the creation and use of resource pools. The project management software allows you to create custom project documentation for resource information that facilitates data and task management. The Resource Pool allows you to schedule sources for multiple projects. Because the information is integrated and accessible to all users, you can quickly identify contradictions between the tasks of an employee in different projects and see how their time is devoted to each project.
The United States, Canada, and Switzerland can all be described as ________ systems of government while France can be described as a ________ system of government.
a. unitary; federal
b. totalitarian; federal
c. federal; unitary
d. oligarchic; federal
e. unitary; totalitarian
Answer:
The correct answer is letter "C": federal; unitary.
Explanation:
A federal government is the type of national management where the power is divided between a central body and state governments that work connected. On the other hand, a unitary government does not share power among its territories. Governmental decisions are centralized.
Mary has a Roth IRA held more than 5 years to which she has contributed $30,000. The IRA has a current value of $62,000. Mary is 55 years old and she takes a distribution of $38,000. How much of the distribution will be taxable to Mary?
Answer:
distribution will taxable to Mary = $8,000
Explanation:
given data
contributed = $30,000
current value = $62,000
distribution = $38,000
age = 55 years old
solution
when requirement is satisfy so withdrawals from a Roth IRA is tax free
so here distribution will be taxable to Mary as
distribution will taxable to Mary = $38,000 - $30,000
distribution will taxable to Mary = $8,000
Why would a free market never operate at a quantity greater than the equilibrium quantity? Hint: What would be required for a transaction to occur at that quantity?
Answer:
This is because in a free market, the prices of goods and services are determined by market forces, and the price mechanism will always keep the market at equilibrium.
Explanation:
The free market is a market without government intervention, equilibrium price and quantity are determined by the interaction of the market forces, also called price mechanism , which Adams Smith referred to as the invisible hands in the market.
The free market cannot operate outside the equilibrium because, the market forces will always keep the market towards equilibrium. Even if equilibrium is distorted, as a result of any shock, the market forces will bring the market towards equilibrium all things being equal, except there is market failure.
a free market is a market in which prices of goods and services are set by demand and supply and are allowed to reach their point of equilibrium without government intervention
f. Purchased a flat-screen TV for Smith's home. g. Paid Smith a cash dividend of $4,000. h. Purchased office supplies on account for $1,200. i. Borrowed $62,000 from the bank for use in the business. j. Received $12,000 cash and issued stock to a stockholder.
Answer:
Seeing the problem we have, it's understood we have to pass journal entries.
Explanation:
In the books of Smith Ltd.
(f) Drawings A/C Dr.
To Purchases A/C
(TV purchased for Smith's personal use, assuming it as a credit purchase)
(g) Dividends payable A/C Dr. $ 4,000
To Cash A/C $ 4,000
(Cash dividend paid to Smith)
(h) Purchases A/C Dr. $ 1,200
To Creditor's A/C $ 1,200
(Office supplies purchased on account i.e. on credit)
(i) Bank A/C Dr. $ 62,000
To Bank loan A/C $ 62,000
(Bank borrowings made for use in the business)
(j) Bank A/C Dr. $ 12,000
To share application and allotment A/C $ 12,000
(Shares issued to a stockholder)
Total $ 79,200 $ 79,200
A company issuing stock expects to provide a rate of return through dividends or capital gains. Dividends are direct cash payments while capital gains are profits earned from selling an asset at a higher price than it was bought. Business transactions, such as issuing stock and paying dividends, are key in financial management.
Understanding Capital Gains and Dividends
When a company issues stock, it acknowledges the expectation from investors to earn a rate of return. This return can manifest as either a dividend or a capital gain. A dividend is a direct cash payment to shareholders, representing a share of the company's earnings. In contrast, a capital gain occurs when an investor purchases an asset—like a stock— and then sells it at a higher price than the purchase price.
For example, an investor might buy Wal-Mart stock at $45 and sell it later for $60. The $15 difference between the selling price and the buying price is the capital gain. This concept is fundamental in understanding the value increase of assets over time and the potential returns on investment.
Transactions involving personal assets or expenses, such as purchasing a flat-screen TV for personal use, do not directly affect the company's financial statements. However, activities like issuing stock, paying dividends, acquiring assets on account, or borrowing from the bank are essential in business accounting and financial decision-making.
Johna's Plant Nursery Company pays the salaries of its two employees. How will this transaction affect the accounting equation? Select all that apply.
Expenses will be decreased.Equity will be increased.Equity will be decreased.Salaries expense will be increased.
Answer:
Equity will be decreased.
Salaries expense will be increased.
Explanation:
As paid salaries are an expense, the total amount of salaries expense will certainly increase (no matter if it is paid or not). Since salaries expense is not a balance sheet item, it has to be represented through an item in it. Equity will be decreased through the decrease of retained earnings (equity item), which is the result of increased expenses.
The salary paid to the employees has been the increase in the expense of the company. Thus, option D is correct.
Johna's Plant Nursery has been the company that has been operated commercially with the profit.
The end of the month accounting equation has been the given as the sum of the equity and the shareholder liabilities.
Salary expense in accounting equationThe salary expense has been the not included in the balance sheet of the company.
The salary paid to the employees has been the increase in the expense of the company. Thus, option D is correct.
It has not been paid from the equity of the shareholders, thus there have been no change in the equity of the shareholders.
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Briefly explain, in your own words, three of the hedge transaction types. Describe in which situations each would be used and why.
Answer:
Explanation:
Transaction types:
1. Fair Value Hedge: the risk being hedged is the change in the fair value of assets and liabilities between the contract date and settlement date. This is used to hedge interest rates, foreign exchange rates etc.
2. Cash Flow Hedge: the risk being hedged is the exposure to variability to cash flows. This is used to hedge equity prices, commodity prices
3. Hedge of net investment in foreign operation: The risk being hedged is currency risk associated with translation of foreign operations.
Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1 year effective annual interest rate is 10%. (a) Graph the payoff and profit diagrams for a forward contract on XYZ stock with a forward price of $55. (b) Is there any advantage to investing in the stock or the forward contract? Why? (c) Suppose XYZ paid a dividend of $2 per year and everything else stayed the same. Now is there any advantage to investing in the stock or the forward contract? Why?
Use the following information to calculate the sales price of a boat under both GAAP and for internal decision purposes:
Number of boats to be sold 500
Upstream costs $5,000,000
Direct materials per boat $50,000
Direct labor per boat $30,000
Overhead per boat $ 20,000
Downstream costs $2,000,000
(1). Assume the company wants to sell each boat for 20% more than the cost to produce the boat. Which of the following would be the sales price under GAAP and for internal decision purposes?
GAAP Internal Decision
(A) $120,000 $136,800
(B) $ 136,800 $136,800
(C) $ 120,000 $114,000
(D)) $136,800 $ 114,000
Answer:
(A) $120,000 ; $136,800
Explanation:
The computation is shown below:
The sales price under GAAP would be
= (Direct materials per boat + Direct labor per boat + Overhead per boat) + (Markup percentage of total cost)
= ($50,000 + $30,000 + $20,000) + 20% × $100,000
= $100,000 + $20,000
= $120,000
The sales price under Internal decision purposes would be
= (Direct materials per boat + Direct labor per boat + Overhead per boat + Upstream costs per boat + downstream cost per boat ) + (Markup percentage of total cost)
= ($50,000 + $30,000 + $20,000 + $10,000 + $4,000) + 20% × $114,000
= $114,000 + $22,800
= $136,800
The upstream per boat would be
= $5,000,000 ÷ 500
= $10,000
And, the downstream per boar
= $2,000,000 ÷ 500
= $4,000
__________ can seek investment from social venture capitalists known as impact-investment funds.
Answer:
The correct word for the blank space is: social venture capitalist.
Explanation:
Social venture capitalists are investments entrepreneurs get into to generate profit trough an organization while achieving a social impact at the same time. This is typically done as a way to create social awareness on protecting the environment around businesses since most of them harm the atmosphere without taking care of the consequences in the future.
Aggregate expenditure equals the sum of consumption, investment, government spending, and net exports. These are also the components of aggregate demand. The aggregate expenditure model looks at the effects of changes in demand on income (Y), assuming that the price level does not change. Likewise, in the flat or Keynesian portion of the AS curve, the price level will not change when output changes. In an AE model with MPC = 0.80, the government increases spending by $100 million. What will be the increase in equilibrium Y in the Keynesian AE model? Say you have two graphs of an economy: a graph showing the Keynesian model (as discussed in part A, above) and another showing the AD/AS model. In the AD/AS diagram, the AD curve will shift to the right by the amount of the increase in Y predicted by the Keynesian AE model. If the AD curve intersects the AS curve in the flat, Keynesian portion of the AS curve, what will be the increase in real output in the AD/AS model resulting from the $100 million increase in government spending? Continuing the line of questioning from part B, above, now say the AD curve intersects the AS curve where the AS is vertical. What will be the increase in real output in the AD/AS model resulting from the $100 million increase in government spending? If the AD curve intersects the AS curve in the middle section of the AS curve, can you calculate the increase in real output in the AD/AS model resulting from the $100 million increase in government spending? If not, what additional information would you need? In general, what effect does the slope of the AS curve have on the size of the change in real output due to an increase in autonomous expenditure in the AE model? At the flat, horizontal portion of the AS curve an increase in AD will greatly increase output but barely, if at all, affect the price level. At the more vertical portion of the AS cure, an increase in AD will cause a small, if any, increase in output and a large increase in price level.
In a Keynesian AE model with an MPC of 0.80, an increase in government spending of $100 million can increase the equilibrium income (Y) by $500 million. The effect of this in the AD/AS model varies based on where the AD curve intersects with the AS curve. Detailed computation can depend on additional factors like price elasticity and planned expenditure levels.
Explanation:In Keynesian economic theory, the aggregate demand (AD) equals the sum of consumption, investment, government spending, and net exports. The equilibrium income (Y) is significantly affected by these factors. For instance, with an MPC of 0.80, a government spending increase of $100 million could result in an equilibrium increase in Y by $500 million (1/1-MPC x $100 million), in an AE model.
In an AD/AS model, if the AD curve intersects the AS curve in the flat Keynesian portion, the increase in real output will be the same as in the Keynesian AE model i.e. $500 million, reflecting the multiplier effect, with no change in price level. However, if the AD curve intersects the AS curve where AS is vertical, there will be no increase in real output irrespective of the increase in government spending. This depicts a situation of full employment where any increase in AD is met with price increases but not output increases.
For a situation where the AD curve intersects with the AS curve in the middle section, additional inputs like price elasticity and planned expenditure levels are needed to accurately compute the change in output. The slope of the AS curve indicates the responsiveness of output to changes in AD. At the flat, horizontal portion of the AS curve, an increase in AD will greatly increase output with minimal change in price level. On the other hand, in a more vertical AS curve, an increase in AD would result in a minimal change in output but a large change in the price level, this is because productive resources are nearly fully employed.
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Final answer:
In the Keynesian AE model with an MPC of 0.80, a $100 million increase in government spending leads to a $500 million increase in equilibrium GDP due to the multiplier effect. The AD curve's shift and its impact on real output depend on where it intersects the AS curve, with different outcomes in the Keynesian, classical, and intermediate ranges of the AS curve.
Explanation:
Impact of Government Spending in Keynesian AE Model
In an aggregate expenditure (AE) model with a marginal propensity to consume (MPC) of 0.80, a $100 million increase in government spending leads to an increase in equilibrium real GDP (Y). This impact is calculated using the multiplier effect. The multiplier in this scenario is 1/(1 - MPC), which equals 1/(1 - 0.80) or 5. Therefore, the increase in equilibrium Y would be $100 million multiplied by 5, resulting in a $500 million increase.
Shift in AD Curve and Output Changes
On an aggregate demand/aggregate supply (AD/AS) model, the AD curve shifts to the right by the change in Y, which is $500 million, when government spending increases. If the AD curve intersects the AS curve on the flat Keynesian portion of the AS curve, there will be a large increase in real output without a change in the price level. Conversely, if the AD curve intersects the AS curve where the AS is vertical (classical range), the increase in government spending will not affect real output and will only raise the price level.
If the AD curve intersects the AS curve on the upward sloping portion (intermediate range), additional information would be needed to determine the effect on real output and the price level. The slope of the AS curve determines how changes in AD affect real output and the price level.
From the perspective of a general manager in your field, which of the organizational control methods outlined in Chapter 19 of the Management textbook do you think would be the most universal? What does organizational control look like in your sphere of influence?
Answer and Explanation:
Association controls is a sort of deliberate procedure which encourages administrator to manage the hierarchical exercises to make each thing adjusted and desires set up in plans, standard execution and target.
The three significant association control are feed forward, simultaneous and criticism control components.
From a head supervisor point of view the most well-known or all around acknowledged authoritative control is the ' simultaneous control'. This aides in settling issue by versatile condition, absolute quality administration a representative discretion. Simultaneous control intently screen the exercises and propose new arrangements dependent on the adjustment in necessity. This aides in making key execution pointers for all the useful office.
When referring to "marginal" changes, the economic focus is on
large changes on the low end.
changes that affect only a few people or products.
small or incremental changes.
graduated changes on the high end.
Option C
When referring to "marginal" changes, the economic focus is on small or incremental changes.
Explanation:
“Marginal” in economics indicates “added” or “extra”. It is the belief that Organizations may exercise determinations by examining the influence of minute variations from the current state. A marginal change is proportionally quite a little increase or reduction to the entire amount of any variable. Statisticians practice the name marginal change to represent tiny incremental improvements to an actual form of progress.
Statisticians rely massively on the view that firms, purchasers and other business quarters can progress judgments by considering in names of the margin. Basic marginal ideas in economics involve marginal cost, marginal benefit.
On January 1, 2016, American Corporation purchased 25% of the outstanding voting shares of Short Supplies common stock for $232,500 cash. On that date, Short's book value and fair value were both $930,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2016, was $89,000. During 2016, Short also paid cash dividends in the amount of $28,500. Required: Compute the amount that would be reported for the investment on American Corporation's financial statements at December 31, 2016.
Answer:
$247,625
Explanation:
Expectation: To compute the amount to be reported in the investment on American Corporation's Financial Statements - December 31st, 2016
Step 1: American Corporation purchases of Short Supplies = $232,500
This represents 25% of the outstanding voting shares of Short Supplies.
Short Supplies net income was $89,000
Therefore, American Corporation's share of net income = 25% x $89,000
= $22,250. This is the reported income as a result of the voting shares bought.
Secondly, since cash dividend was paid (paid before the declaration of the net income), then American Corporation as an investor is also entitled to the 25% of the dividend
Therefore,
The final amount of total investment of American Corporation to be reported in the financial statement is
The value of the initial stock purchased + Share of net Income - Cash dividend due.
= $ 232,500 (original investment) + $22,250 (share of net income) - ($7,125) Cash dividend
= $247,625
Do the following activities contribute to US GDP in 2020? Explain why or why not? In which year do these activities contribute to US GDP and to which component of expenditure?
(a) A new Toyota Camry built in Japan and sold in the US in 2019
(b) A new Toyota Camry built in Tennessee in December 2013 and sold in Canada in January 2020
(c) A used Toyota Camry built in Japan in 2007 and sold in the US in December 2020
(d) A new Toyota Camry built in Tennessee in December 2013 and sold in North Carolina in June of 2020
(e) A used Toyota Camry bought by a used car dealership for $5000 and sold for $6000 in 2020
The GDP includes only new goods and services bought and produced within the country in a specific year. Imported cars, used cars, and cars made in an earlier year do not contribute to the GDP of the stated year. Only new cars produced and sold to other countries contribute to the GDP as exports.
Explanation:The Gross Domestic Product (GDP) of a country is the sum of all goods and services produced within a certain period. It is divided into four main components: consumption (C), investment (I), government spending (G), and net exports (X-M).
A new Toyota Camry built in Japan and sold in the US in 2019 would not contribute to US GDP in 2020 as it's counted in the year it was sold (2019) and falls under imports (M) since it was made outside the US. A new Toyota Camry built in Tennessee in December 2013 and sold in Canada in January 2020 would contribute to 2020 US GDP in the net exports (X-M) section because the US made it and sold to another country. A used Toyota Camry built in Japan in 2007 and sold in the US in December 2020 doesn't add to the US 2020 GDP because GDP considers the production of new goods and services only. The car was initially accounted for the year it was first sold. A new Toyota Camry built in Tennessee in December 2013 and sold in North Carolina in June of 2020 wouldn't count towards US GDP in 2020 because it was initially included in the GDP in 2013, the year it was first produced and sold. A used Toyota Camry bought by a used car dealership for $5000 and sold for $6000 in 2020 would not contribute to 2020 US GDP. Only the value-added services associated with the resale of the car could be included in the GDP.Learn more about US GDP Contribution here:
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Custer County is considering raising revenues by imposing a $25 fee on couples who obtain a marriage license within the county.
Does this fee meet the definition of a transaction-based tax?
Answer:
The payment serves as a fee for the service rendered by government. It is slightly different from a transaction-based tax due to the fact that a private party and the jurisdiction are involved in a transaction instead of the normal operation in a market transaction that occurs between two or more private parties. This also gives the payer a certain opportunity which is the right to get married under law.
Explanation:
The payment serves as a fee for the service rendered by the government. It is slightly different from a transaction-based tax due to the fact that a private party and the jurisdiction are involved in a transaction instead of the normal operation in a market transaction that occurs between two or more private parties. This also gives the payer a certain opportunity which is the right to get married under the law.
A plat is a title to land, similar to an automobile title, that was designed to make land and title more easily transferable. A. TrueB. False
Answer:
The correct answer is letter "B": False.
Explanation:
A plat is a drawn map showing in detail the dimensions of a property in scale. It portraits in paper what the distribution of the property is. Typically a plat survey is carried out at the moment of making a plat. The plat must be validated by a public works agency or an urban planning commission so it can be considered for legal processes.
A plat is not a title itself.
Answer:FALSE
Explanation:A PLAT which can also be referred to as PLAN is drafted to measure the land,the subsections of the land,the boundaries of the land,the connecting streets etc. It can be used for both vegetations or for residential Buildings.
A plat map is required especially when the land is to be subdivided into lots for use in either public Buildings or for public Access or for recreation center such as Parks, gardens, relaxation spots etc.
On the statement of cash flows prepared by the indirect method, the Cash flows from operating activities section would includea. payments for cash dividendsb. gains or losses on fixed assetsc. receipts from the issuance of capital stockd. receipts from the sale of investments
Answer:
b. gains or losses on fixed assets
Explanation:
Operating activities: It includes those transactions that affect the after-net income working capital. It would deduct the increase in current assets and a decrease in current liabilities, while adding the decrease in current assets and an increase in current liabilities.
It would manage those adjustments in working capital. In addition, the depreciation costs are added to the net income and the loss on the sale of assets is added, while the profit on the sale of assets is deducted
What is the consequence of a firm in a competitive market selling a homogenous product?
a. The firms capture some market power.
b. The product sold by one firm is a perfect substitute for the products sold by other firms in the same industry.
c. All the firms in the industry are the same size.
d. The product sold by one firm is a perfect complement for the products sold by other firms in the industry.
e. Firms in the industry can produce the same product with a different quantity of inputs.
Answer:
The correct answer is letter "B": The product sold by one firm is a perfect substitute for the products sold by other firms in the same industry.
Explanation:
Homogeneous products are those that cannot be differentiated one from another because they have similar features and satisfy the same need. They could even be sold at the same or nearly the same price. Under this scenario, these products are perfect substitutes from one another. Consumers will not be affected if one of the manufacturers decides to stop operations.
g which of the following is one of the goals of the American Marketing Association? A. To promote the use of a utilitarian approach to marketing whenever possible B. To promote ethical relativism C. To create a single open market where goods flow freely between countries D. To promote high standards of ethical norms and values E. To establish free trade zones worldwide
Answer: The correct answer is "D. To promote high standards of ethical norms and values".
Explanation: The American Marketing Association has a complete code of ethics, from which it undertakes to promote the highest level of standards and the application of professional quality ethical values for its different members.