Answer:
Increase , Increase
Explanation:
Gross domestic product GDP is a measure of the total value of a country's output in a given year. It shows the final value of all goods and services produced within the boundaries of an economy. Economists use GDP to ascertain whether an economy is expanding or declining.
An increase in GDP means that the total output in the economy. More products and services were produced in that period compared to the previous period. An increase in GDP creates employment as more workers will be needed in production processes. As demand and the number of workers increase, total income in the economy rises.
When GDP increases, national income and national output both generally increase. The relationship between GDP growth and population growth affects GDP per capita. Increases in real GDP result in higher incomes and increased demand for money throughout the economy.
When gross domestic product (GDP) increases, national income also increases and national output rises. GDP is a measure of the economic performance of a country, tallying the value of its goods and services produced over a specific period. An increase in GDP typically signifies that the economy is producing more goods and services, which often leads to higher incomes for individuals and businesses. This is because an increase in real GDP results in higher earnings throughout the economy, leading to a higher demand for money. It's important to note that these increases are assuming that the GDP growth outpaces the population growth. However, if the population grows faster than GDP, then while the overall GDP may still increase, the GDP per capita, or GDP for each individual, may decrease.
Rodrigo operates a dry-cleaning service and charges customers $5 per article of clothing. Based on his knowledge of operations, the 1,000th piece of clothing costs him $4.95 to dry clean. If he takes additional business, however, the 1,001st piece will cost $5 for the service. Does he take the additional business?a. no, he has hidden costs that far exceed his estimate of $5, so he loses money. b. no, taking on additional business doesn’t earn him any money. c. yes, if he turns away business, his service will be forced to close. d. maybe. if a competitor is accepting that many customers, he must at least equal that amount. e. yes. at a $5 cost, he breaks even and is indifferent. he necessarily turns away business when the cost of the additional unit exceeds the income.
Answer:
yes. at a $5 cost, he breaks even and is indifferent. he necessarily turns away business when the cost of the additional unit exceeds the income.
Explanation:
To maximize profits, a firm should continue selling until the marginal revenue product equals the marginal cost of the product. Marginal revenue product is the additional revenue from the sale of an extra cost. Marginal cost is the extra expense associated with the production of an additional unit.
Rodrigo should accept that extra business. His marginal revenue product from additional business equals the marginal cost. He will not make an accounting profit or loss but may gain a long term customer. He should decline any additional business only if the marginal cost is greater than the marginal revenue product.
Final answer:
Rodrigo should take the additional business as he breaks even on the 1,001st article of clothing, potentially keeping or attracting more customers without any immediate monetary loss, although he needs to consider any hidden costs and long-term business strategy.
Explanation:
Rodrigo faces a decision in his dry-cleaning business regarding whether to accept additional business when the cost of servicing the 1,001st article of clothing is exactly equal to the price charged to the customer. We analyze this decision as follows:
If Rodrigo's cost for cleaning the 1,001st item is $5 and he charges $5, then he is breaking even on that unit. This is option (e) from the provided choices. In this case, Rodrigo does not gain or lose money on this additional unit.However, if there are any hidden costs or the opportunity for added revenue from future business as a result of taking on more work, this break-even analysis could change.Other factors like customer satisfaction, reputation, and long-term strategic goals need to be considered beyond the immediate cost and revenue.Based on the information given, and ignoring any possible hidden costs and external effects on the business, the answer is e. Yes, he breaks even on the 1,001st article but does not necessarily turn away business unless the cost of an additional unit would exceed the revenue.
The Business Auto Coverage Form is intended for which of the following businesses? Select all that apply.
a. Owned private passenger autos
b. Mobile equipment registered to drive on public roads
c. Automatic coverage for physical damage to trailers
d. Automobiles owned by employees used for business purposes
Answer:
A) Owned private passenger autos
B) Mobile equipment registered to drive on public roads
D) Automobiles owned by employees used for business purposes
Explanation:
Business Auto Coverage Form is used to cover a company's autos, trucks, trailers, semitrailers and mobile equipment that are owned or used by the company.
It also covers vehicles that are not owned by the company but are used by the company's employees while doing business related activities, e.g. automobiles owned by employees and used for business activities.
It only covers mobile equipment that is registered to drive on public roads, e.g. cranes, drills, shovels, tractors, etc.
The company is currently selling 5,000 units per month. Fixed expenses are $243,000 per month. The marketing manager believes that an $11,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
Answer:
If the company decides to increase its advertising budget, its net profits will decrease by $200 (= $56,800 - $57,000).
Explanation:
The company is currently selling 5,000 units per month at $150 per unit, and its total variable costs are $90 per unit.
Fixed expenses are $243,000 per month.
Current income statement:
sales revenue = $750,000
minus variable costs = ($450,000)
minus fixed costs = ($243,000)
net income = $57,000
If the company increases its advertising budget be $11,000 it should sell 180 more units per month, the new income statement would be:
sales revenue = $777,000
minus variable costs = ($466,200)
minus fixed costs = ($254,000)
net income = $56,800
If the company decides to increase its advertising budget, its net profits will decrease by $200 (= $56,800 - $57,000).
According to the Securities Act of 1933, a pooled investment fund will be classified as a federal covered security if it is____________.
Answer:
If it is registered as an Investment Company under the Investment Company Act of 1940
Explanation:
The Investment Company Act of 1940 represents a Federal Government regulation that is recognised by the 1933 Securities Act. According to the Investment Company Act, a mutual fund is considered a federal covered security when it is registered as an investment company.
An investment company represents a trust or a corporation whose main business is to invest the pooled capital of investors in financial securities. Investment companies carry out their business either through an open end fund or a closed end fund.
Final answer:
A pooled investment fund is classified as a federal covered security if it is registered under the Investment Company Act of 1940. Mutual funds are common examples of such funds, widely held by US households as part of their financial investments. The SEC oversees these funds to ensure transparency and protect investors.
Explanation:
According to the Securities Act of 1933, a pooled investment fund will be classified as a federal covered security if it is registered under the Investment Company Act of 1940 and is offered to the public or sold in a public offering. Mutual funds typically fall under this category because they are regulated investment products. These funds consist of a portfolio of stocks, bonds, or other securities, which gives individual investors access to a diversified set of investments. Mutual funds are popular financial investments; for instance, in 2021, just over 47% of U.S. households had financial investments in mutual funds, often as part of retirement savings or pension plans.
The creation of the Securities and Exchange Commission (SEC) in 1934 further reinforced this regulatory framework to protect investors by requiring issuers of securities, such as mutual funds, to register and disclose necessary financial information. The goal of these regulations is to prevent fraud and promote transparency in the financial markets.
Tim is listening to music from an online music provider (such as Pandora). He creates a list of his music preferences, and the music service uses his list to suggest additional songs that Tim might like. This music service is an example of a cloud-computing application that uses collaborative filtering technology.
What is the name of this type of technology?
Bit-torrent
Software as a Service
Crowdsourcing
Grid computing
Software as a Service is the technology that has been used here in the given excerpt.
Explanation:
Software as a service is a model in which the software is distributed through a third party who will host the application software on the internet through a web interface medium called website.
This website will be the front end where the application will be given a service. The provider will take care of the performance, security and availability of application over a cloud based computing technology.
The main advantage of this service is saves time, cost and user friendly usage and maximise the profit.
Software as a Service (SaaS) is the technology used by online music services that recommend songs to users based on their music preferences, enabled by collaborative filtering technology. The correct answer is option: Software as a Service.
The type of technology being used by the online music service that suggests songs to Tim based on his preferences is an example of Software as a Service (SaaS). SaaS is one of the cloud service models where software applications are delivered over the internet, making it unnecessary for users to install or maintain the software locally. This listening experience is enhanced by collaborative filtering technology, which is a recommendation algorithm that detects patterns in the user's preferences to suggest new content.
John is an athlete. He has $120 to spend and wants to buy either a heart rate monitor or new running shoes. Both the heart rate monitor and running shoes cost $120, so he can only buy one. This illustrates the principle that
Answer:
a scale of preference has to be drawn.
Explanation:
This is an economic concept where a choice is made between two or more items based on the order of importance.
Minnetonka Company leases an asset. Information regarding the lease:Fair value of the asset: $400,000. Useful life of the asset: 6 years with no salvage value. Lease term is 5 years. Annual lease payments are $60,000 Implicit interest rate: 11%. Minnetonka can purchase the asset at the end of the lease period for $50,000. What type of lease is this?A) Operating.B) Finance.C) Short term.D) Long term.
Answer:
Finance lease
Explanation:
Finance lease is type of lease that is concerned on the owning a property. in other word it is finance method that is entitled to finance assets and owning authority has to pay hiring amount for the assets.
It is totally different from the operating lease. it can be described as finance lease is related to owning the property and operating is related to the renting the property.
Bus Corp wants to introduce a new procedure to improve how customer requests are handled. This change will require employees to break old routines and adopt new role patterns. They decide to adopt two new programs. One asks the employees to learn how to work as teams as the company changes. The other involves forming task forces within the company to help determine new customer service practices. In Scenario C, Bus Corp is using ________ to minimize resistance to change. A) Communication B) Learning C) Stress management D) Negotiation E) Employee involvement
Answer:
Answer is Option E i.e. Employee Involvement.
Explanation:
Employee involvement can be understood as participation of employees in the important decision-making process to meet the desired objective of the organization. This process creates a sense of ownership among employees and thus, they would openly accept any change that might take place within the organization.
Suppose Elliot draws a check on his checking account at City Bank "payable to the order of Phyllis Jones." When Phyllis presents the check for payment, City Bank refuses to pay it. Phyllis can collect the amount of the check from Elliot because Elliot, the _____, is _____ liable on the check when it is dishonored.
Answer:
the drawer, is secondarily liable on the check when it is dishonored.
Explanation:
A check is a legal document and is usually considered as good as cash. When a check bounces (is not paid by the bank) the drawer is liable for the total amount of the check.
If the check bounces because the account does not have sufficient funds, the drawer is responsible and liable. But if the bank bounces the check without any proper reason, then it can be liable for damages.
Answer: The drawer, is secondarily liable for the check when it is dishonored.
Explanation: just has this one.
Why should campaigns with different marketing objectives be separated into different Performance Planner plans?
Answer:
•To prevent budget from limiting campaign.
•So that there won't be reallocation of spend within two separate marketing objective.
•So that there won't be duplicating of any potential keywords between different marketing objectives.
•To identity better seasons trends for individuals.
Markets may have difficulty providing the proper quantity of a public good because____________.
Answer:
individuals will be prone to become free riders, and private firms will face difficulty in generating enough revenue to produce further.
Explanation:
everyone wants to be a free rider. definitely , if markets provide proper quality public goods the free riders will increase and private firms will face difficulty in generating enough revenues to produce an efficient quantity of the goods to compete.
Tony is the owner of Tony’s Taqueria. Tony is a profit-maximizing owner whose firm operates in a competitive market. An additional worker costs Tony $200 and has a marginal productivity of 40 tacos. Assuming no other variable costs, what is the marginal cost of a taco? a. $200 b. $8 c. $5 d. There is insufficient information available to answer this question.
Answer:
(c) $5
Explanation:
Remember, To calculate marginal cost, we divide the change in production costs by the change in quantity.
In this example, the change in production cost is $200 (for hiring an additional worker) while the change in quantity of taco is 40 (increase in marginal productivity).
The marginal cost= $200/40
we get $5 as the marginal cost.
Which of the following mortgages would you prefer to hold if you were a lender and you expected inflation of uncertain magnitude?
A. Conventional fixed-rate mortgages
B. Reverse annuity mortgages
C. Adjustable-rate mortgage loans
D. Balloon payment mortgages
Answer: Option C
Explanation: An adjustable mortgage (ARM) is a borrowing form in which the rate of interest charged to the remaining balance varies all across the loan's lifetime. The new interest rate is set for an amount of time with an adjustable-rate mortgage, after which it resets regularly, often quarterly or even monthly.
The mortgage can be given at the normal variable rate/base rate of the lender. There may be a clear and statutorily defined relation to the applicable index, but if the creditor does not provide a specific link to the underlying market or index, the rate may be adjusted at the option of the lender.
All of the following statements regarding accounting treatments for liabilities under U.S. GAAP and IFRS are true except:_______A. Accounting for bonds and notes under U.S. GAAP and IFRS is similar.B. Both U.S. GAAP and IFRS require companies to distinguish between operating leases and capital leases.C. The criteria for identifying a lease as a capital lease are more general under IFRS.D. Both U.S. GAAP and IFRS require companies to record costs of retirement benefits as employees work and earn them.E. Use of the fair value option to account for bonds and notes is not acceptable under U.S. GAAP or IFRS.
Answer:
A) Accounting for bonds and notes under US GAAP and IFRS is similar.
Explanation:
US GAAP and IFRS do not have the same accounting guideline for bond issue cost:
Under US GAAP, bonds payable is recorded at face value while premiums or discounts are recorded separately. While under IFRS, bonds payable is recorded using the carrying value, and amortization or premiums or discounts is done by using the effective-interest method.
A real (or constant) dollar value can be calculated by dividing the nominal (unadjusted or current dollar) value by the ____________ for that year.
a) inflation rate
b) GDP growth rate
c) price index (decimal shifted)
d) any of the above
Answer:
(C) price index (decimal shifted)
Explanation:
A real dollar value can be calculated as follows:
Real Dollar Value = [tex]\frac{Norminal Dollar Value}{Price Index}[/tex].
The price index is an adjustment figure that is computed as (the price in the current year) divided by (the price in a base year). Thus the price index expresses the price in the current year in relative terms to $1 in the base year. As such, if the price index in the current year is 1.25, it means current year prices are 25% more expensive that they were in the base year.
Joe came into a sizeable inheritance about 5 years ago. His investment advisor representative recommended putting the majority if the inheritance into a variable annuity, once Joe had maxed out other tax-deferred products. Joe has seen the funds in the variable annuity grow over the past 5 years, but he wants to know more about how the variable annuity works and where the increases in value originate. Which of the following is a good statement from the IAR related to how variable annuities grow?A) "Variable annuities appreciate in value as the stock of the issuer of the variable annuity goes up."B) "Variable annuities have a fixed pay-out rate which is determined at the time of investment. Investors can look back at their original documents related to the variable annuity to see what this pre-determined rate of growth is."C) "Variable annuities include investments in various products, normally mutual funds, so the value of the variable annuity will fluctuate with increases or decreases in the values of the products held within the variable annuity."D) "You should contact the issuer of the variable annuity to find out more information on how it works. I am simply your investment advisor."
Answer:
C) "Variable annuities include investments in various products, normally mutual funds, so the value of the variable annuity will fluctuate with increases or decreases in the values of the products held within the variable annuity."
Explanation:
Joe's investment adviser should have discussed what type of investment he was recommending and why he was recommending them. If Joe wants to know more about his investments, his IAR has a fiduciary obligation to explain how a variable annuity works.
Variable annuities are a type of investment vehicle, which allows tax deferral on investment growth. Variable annuities are called variable because the investor decides which investment he will take and the value of the investments vary in time.
Usually variable annuities include different mutual funds, and if the price of the shares of the mutual funds vary, so will the value of the annuity.
Which of the following terms refers to a regulatory agency that seems to serve, rather than oversee, the interests it monitors?
Answer:
captured agencies
Explanation:
Captured agencies are regulatory agencies that serve the commercial or political interests of an interest group instead of the interests of the whole population.
Interest groups may be constitute by people of a specific geographical area, industry, profession, or ideology. When an agency is captured by an interest group, the interest of the special group prevail over the interests of the general population. Captured agencies are closely associated with rent-seeking and political corruption.
Which of the following organizations has a mission to help students develop a vision to discover their potential while learning about how to become an entrepreneur?A. Hugh O'Brian Youth LeadershipB. Junior AchievementC. Network for Student EntrepreneurshipsD. Young Student Entrepreneurs
Answer:
D) Young Student Entrepreneurs
Explanation:
The correct name is Young Entrepreneurial Students or YES. Yes is a religious organization that helps marginalized students (ages 12 - 25) to develop entrepreneurial success. YES is located in Dade City, Pasco County, Florida.
Its moto is "YOU DON’T HAVE TO BE OLD TO START SOMETHING NEW!"
Donna has a home currently worth $142,000, for which she still owes $63,000 on her mortgage. She has $18,000 in student loan debt and $13,000 in credit card debt. She likes to keep an emergency fund, so she has $1000, in a savings account. Her annual salary this year will be $44,000. What is Donna's net worth?
Answer:
$49,000
Explanation:
Donna's net worth is the total value of her assets minus the total value of her liabilities.
Donna's total assets = $142,000 + $1,000 = $143,000
Donna's total liabilities = $63,000 + $18,000 + $13,000 = $94,000
Donna's net worth = $143,000 - $94,000 = $49,000
Vincent is tasked with deriving the value for a large, custom home that was constructed nine months ago on a secluded 10-acre lot. Which approach could be considered the most reliable for valuation?
a. cost approach
b. income approach
c. sales comparison approach
d. All are equally reliable.
Answer: Cost Approach
Explanation:
The best method Vincent should use for valuation is the cost approach.
The cost approach is a method of worth estimation that considers the cost of building an already existing structure: checking the value of the land used for building, the cost of construction and subtracting the devaluation overtime.
Customer service representatives (CSRs) often conceal their frustration when serving an irritating customer. This behavior from the CSRs is an example of:_________A. emotional labor.B. cognitive response.C. cognitive dissonance.D. judgmental evaluation.E. emotional attribution.
Answer:
Letter A is correct. Emotional labor.
Explanation:
Emotional labor is the ability of a collaborator to have to manage his or her personal emotions and feelings so that their work is done without being affected by individual emotions and is then best performed.
Emotional labor usually occurs when there is interaction with other employees, customers, suppliers and bosses, so that emotions are regulated and interaction occurs in a clear and positive way for both parties.
The functions that require a lot of use of emotion control are: salespeople, public administration, social assistance, services in general and others.
The delivery of services can be expressed as a __________ with mass produced, low-customer contact systems at one end, and highly customized, high-customer-contact systems at the other end.
Answer: Continuum
Explanation:
The question is given a description of the service delivery system, a kind of system which is targeted at meeting customers needs while profit is being made by the organization.
Continuum is a word used to describe a process with stages that vary slightly and lies between two eventualities.
The continuum in the question is used to describe the stages in the service delivery system, from the level of low customer contact that gradually progresses to a level of high customer contact.
Fiona is employed by Hallmark Cards, Inc., where her responsibilities include maintaining displays of greeting cards in drugstores and discount stores. Her daily activities include straightening the cards, pulling outdated or slow sellers, and installing new cards. Fiona is called a(n) _____.
Answer:
These are the options for the question:
a. specialty-line wholesalers.
b. assemblers.
c. full-service stockers.
d. in-store maintainers.
e. rack jobbers.
And this is the correct answer:
c. full-service stockers.
Explanation:
Fiona is a full-service stocker, or retail stocker. A retail stocker is a person who is responsible for organizing (stocking) products in the shelves of a retail space (a large store, a supermarket, a convenience store).
Retail stocker also help customers by giving directions within the store, or by helping elderly, disabled, and other people reach products that they might not be able to reach by themselves.
Fiona, given her responsibilities of maintaining and updating the displays of greeting cards, can be referred to as a Merchandiser. She replaces outdated cards, adjusts displays, and incorporates new products, which are the typical roles of a merchandiser.
Explanation:Based on the responsibilities of maintaining and updating greeting card displays in stores, Fiona could be referred to as a Merchandiser for Hallmark Cards, Inc. A merchandiser is accountable for not only presenting the products accurately, but also replacing outdated or slow sellers and incorporating new items. Not to be mistaken with a 'part-time promotion assistant,' which includes tasks more linked to scheduling, advertising, subscription methods, and fundraising, the role Fiona is handling is specifically centered around the physical display and turnover of products, a typical role of a merchandiser.
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The percentage of network programming on broadcast TV that involves sports is _______________________.
Answer: Fifty percent.
Explanation:
Sports programming has a significant presence on both broadcast TV and cable.
Explanation:Based on the information provided, it is difficult to determine the specific percentage of network programming on broadcast TV that involves sports. However, the information suggests that sports programming is a significant part of network programming. Major networks like ABC, CBS, NBC, and Fox produce sports programs in addition to news and other types of programming. Sports programming is also popular on cable channels like ESPN. Overall, sports programming has a significant presence on both broadcast TV and cable.
Home-Baked Bread Company hires Ike to sell the company’s products in a certain area. Home-Baked Bread agrees to pay Ike a salary, plus commission, for a trial period. They also agree that Ike can sell using any methods and during any hours that seem appropriate. The key factor in whether Ike is Home-Baked Bread’s employee is
Answer: The control the company has over Ike's job details.
Explanation:
The Home-baked bread company and Ike share something in common which is the fact that Ike is an employee of the company and also he is to be paid by the company.
As an employee of the bread company, they still control Ike's job role and can decide to vary or maintain his current job role depending on what the company desires to achieve. Also if he doesn't meet up to some target he can still be laid off, due to the fact that he is still on his trial period.
Which of the following is true about potential GDP: Select one:
A. For a nation to be at its potential GDP, the unemployment rate has to be zero.
B. current GDP will be below potential GDP. A nations actual GDP can never be greater than its potential
C. When current GDP is greater than potential GDP, then current unemployment will be below the natural unemployment rate
D. If the current unemployment rate is below the natural unemployment rate, then
Answer:
The correct answer is option C.
Explanation:
At the potential level of GDP, the unemployment rate is equal to the natural rate of unemployment. It is considered the full employment level, though the unemployment rate is not zero. There is no cyclical unemployment at this point, but structural and frictional unemployment exists.
When the current GDP is greater than the potential GDP, it means that the economy is facing inflationary pressures. At this level, the unemployment rate will be lower than the natural rate of unemployment.
In such situations, the government needs to adopt contractionary policies to correct the fluctuations in the economy and bring the economy back to the potential or full employment level.
When current GDP is greater than potential GDP, then current unemployment will be below the natural unemployment rate.
The correct answer to the question is: C. When current GDP is greater than potential GDP, then current unemployment will be below the natural unemployment rate.
Potential GDP refers to the maximum level of output that an economy can produce when it is operating at full capacity and with full employment.
When current GDP is greater than potential GDP, it suggests that the economy is producing more than its maximum capacity, which leads to a decrease in unemployment below the natural unemployment rate.
So, When current GDP is greater than potential GDP, then current unemployment will be below the natural unemployment rate.
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Which of the following versions of corporate social responsibility suggests that the long - term financial well - being of every firm is directly tied questions of how the firm both affects and is affected by the natural environment? a. Social entrepreneurship b. Sustainability c. Social web d. philanthropic
Answer:
Sustainability
Explanation:
Sustainability is based on addressing current requirements without undermining future coming generations ' capacity to satisfy their desires.Sustainability motivates companies to shape choices in respect of time period rather than on the income release for the next quarter and recognize more determinants than just the gains or losses associated.
Enterprises can fulfill their environmental requirements by reducing emissions, reducing energy use, importing fair trade goods and checking that their material garbage is appropriately dropped of and with a minimum carbon footprint emission.
Thus, from the above we can conclude that the correct option is B.
Roads that function as expressways and divided highways have high speeds and greater risk of _________ crashes.
A.) Fender-benderB.) High-impactC.) Rear-end
D.) Low-impact
Answer: High-impact crashes
Explanation:
High impact crashes are automobile crashes, that occurs at very high speeds and has a high likelihood to cause injuries and in some cases death to passengers of vehicles or pedestrians around.
Expressways and divided highways are roadways where vehicle drivers are allowed to drive at high speeds, therefore increasing the chances of high impact crashes occuring.
Divided highways and expressways typically have high speed limits which increase the risk of high-impact crashes. These are accidents where a significant amount of force is transferred between vehicles, often resulting in severe injuries and damage.
Explanation:Roads that serve as expressways and divided highways typically have high speed limits. This, combined with the volume of vehicles and the lack of intersections, increases the risk of certain types of accidents. Specifically, these roads are more likely to witness high-impact crashes. High-impact crashes are collisions wherein a high amount of force is exchanged between vehicles, often resulting from high-speed driving. These kinds of crashes often lead to more severe injuries and damages compared to fender-benders or low-impact crashes.
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A ____________ is calculated as a flat percentage of income earned, regardless of level of income.
a.Progressive tax
b.Regressive tax
c.Estate and gift tax
d.Proportional tax
Answer:
d.Proportional tax
Explanation:
A Proportional tax is a tax where the same tax is paid regardless of the income earned. It is also known as a flat tax.
A progressive tax is when the tax paid by high income earners is higher when compared with low income earners.
A regressive tax is when low income earners pay more tax when compared with people who earn a higher income.
I hope my answer helps you.
A proportional tax is a tax that is a flat percentage of income earned, regardless of level of income.
Explanation:A proportional tax is a tax that is a flat percentage of income earned, regardless of level of income. This means that everyone pays the same percentage of their income in taxes, regardless of how much they earn.
For example, if the proportional tax rate is 10%, someone who earns $10,000 would pay $1,000 in taxes, while someone who earns $100,000 would pay $10,000 in taxes.
A lawyer who drives a beat-up car and wears frumpy clothes may have a hard time getting clients. Potential clients may conclude from his appearance that he is poor, and if he is poor, he probably is not very good. If this is true for a lawyer, dressing in expensive and stylish clothing is a way of:
a. signaling quality.
b. changing a nonexcludable good into an excludable good.
c. changing a nonrival good into a rival good.
d. internalizing externalities.
Answer:
A) Signaling quality.
Explanation:
People perceive lawyers who dress poorly, or in cheap clothes, as people who do not make a lot of money with their potentially lucrative profession. The objective validity of this perception is fallacious, but it still has real life consquences that legal professionals should avoid.
By simply dressing in expensive clothes, a lawyer signals that he or she is a quality lawyer because buying expensive clothes require large sums of money that can be earned through a quality work in the legal profession. (for example, winning difficult cases can be very profitable).