In this market, the equilibrium hourly wage is $ , and the equilibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a .
Answer:
The equilibrium hourly wage is the wage where the curve of supply of labor intersects with that of the demand for labor. The same goes for the equilibrium quantity of labor.
The equilibrium hourly wage is $10, and the equilibrium quantity of labor is 450 thousand workers.
If a Senator introduces a minimum hourly wage, this is considered a Price Floor.
Price floors are prices that that the government mandates that one cannot charge below for a good or service. If there is a price floor on cake for instance, a person is not allowed to charge less than that price floor for cake. The Senator's bill is therefore saying that people should not be paid less than $6 an hour.
Following is information from Skechers USA, Inc. for fiscal 2016 (in thousands).
Total 2016 revenue $3,563,311
Total revenue growth rate 5.0%
Terminal revenue growth rate 2%
Net operating profit margin (NOPM) 8.2%
Net operating asset turnover (NOAT)3.42
Projected 2017 total revenue would be:
A. $3,634,577 thousand.
B. $3,855,503 thousand.
C. $3,324,568 thousand.
D. $3,741,477 thousand.
E. None of the above.
Answer:
D. $3,741,477 thousand
Explanation:
Calculation to determine what total revenue would be:
Total value=$3,563,311 million ×(1+.05)
Total value=$3,563,311 million × 1.05
Total value = $3,741,477 thousand
Therefore total revenue would be:$3,741,477 thousand
Investors require an after-tax rate of return of 10% on their stock investments. Assume that the tax rate on dividends is 30% while capital gains escape taxation. A firm will pay a $2 per share dividend 1 year from now, after which the firm's stock is expected to sell at a price of $30.
Required:
a. Find the current price of the stock.
b. Find the expected before-tax rate of return for a 1-year holding period.
c. Now suppose that the dividend will be $3 per share. If the expected after-tax rate of return is still 10%, and investors still expect the stock to sell at $20 in 1 year, at what price must the stock now sell?
d. What is the before-tax of return? Why is it now higher than in part (b)?
Answer:
a. $28.5
b. 12.28%
c. $29.18
d. 13.09%
Explanation:
a. let current price = p
p*1.10 = 2(1-0.3)+30
= 1.4+30/1.10
= 31.4/1.10
= 28.5
the current price of the stock is approximately 28.5 dollars
b. (30+2 /28.5)-1
= 32/28.5 - 1
= 0.1228
= 12.28%
expected before tax rate is 12.28%
c. 3(1-0.3)+30 / 1.10
= 3*0.7+30/1.10
= $29.18
d. before tax rate of return
= (3$ + 30-29.18)/29.18
= 0.1309
= 13.09%
it is now higher here given that given that a greater dividend causes more tax burden.
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $475,000, have a fifteen-year useful life, and have a total salvage value of $47,500. The company estimates that annual revenues and expenses associated with the games would be as follows: Revenues $ 240,000 Less operating expenses: Commissions to amusement houses $ 70,000 Insurance 45,000 Depreciation 28,500 Maintenance 30,000 173,500 Net operating income $ 66,500 Required: 1a. Compute the payback period associated with the new electronic games. 1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
Answer:
a. 5 years
b. Yes they will because the payback period is 5 years.
Explanation:
a. Payback period
First calculate the annual cash inflow:
= Net income + Depreciation
= 66,500 + 28,500
= $95,000
The investment cost was $475,000
Payback period = Investment cost / Annual cash inflow
= 475,000 / 95,000
= 5 years
b. The company will purchase the games because they have a payback period of 5 years.
In recent decades there have been fewer trade blocs established to promote regional economic integration. True False
Answer: False
Explanation:
Trade bloc refers to an intergovernmental agreement, whereby the barriers to trade are eliminated among the countries that are involved.
The statement that "in recent decades there have been fewer trade blocs established to promote regional economic integration" is false.
There has been an increase in trade blocs in recent decades such as Brazil, Russia, India, China, and South Africa(BRICS), North American Free Trade Agreement(NAFTA), Association of Southeast Asian Nations( ASEAN).
They all promote economic development.
Daniel derives utility from only two goods, cake (QC) and donuts (Qd). The marginal utility that Daniel receives from cake (MUc) and donuts (MUd) are given as follows:
MUc = Qd MUd = Qc
Daniel has an income of $240 and the price of cake (Pc) and donuts (Pd) are both $3.
1) What is Daniel's budget constraint?
A) 240 = 3Pc + 3Pd.
B) 240 = 3Qc + 3Qd.
C) 240 = (Pc)(Qc).
D) 240 = (Qc)(Qd).
2) Holding Daniel's income and constant at $240 and $3 respectively, what is Daniel's demand curve for cake?
A. Qc = 120/Pc.
B. Qc = 240/(3 + Pc).
C. Qc = 240/Pc.
D. Qc = 240 - Pc.
E. None of the above.
Answer:
1) What is Daniel's budget constraint?
B) 240 = 3Qc + 3Qd.Total budget = 240
Each cake or donut costs 3 each
2) Holding Daniel's income and constant at $240 and $3 respectively, what is Daniel's demand curve for cake?
E. None of the above.240 = 3c + 3d
3c = 240 - 3d
c = 80 - d
Bob agreed to tutor Lola in Spanish for two (2) hours and Lola agreed to pay $25.00 per hour for the tutoring services. Bob tutored Lola and she paid Bob $50.00. This means that the parties have been _____.
Answer: discharged by performance
Explanation:
When parties to a contract are discharged from their duties as per the contract, it means that they are no longer party to the agreement. When this is done by performance, it means that the discharge was done because both parties have fulfilled the demands of the contract.
Bob agreed to tutor Lola for two hours and Lola agreed to pay Bob $50 for that. Bob then tutored her for the two hours and was paid the amount. The parties have therefore fulfilled their obligations to each other and so the contract has been satisfied.
Suppose velocity is constant, but real GDP is not independent of the money supply. If this is the case, a 10 percent increase in the money supply will:
Answer: d. have an unpredictable effect on inflation.
Explanation:
Changes in money supply affect inflation with an increase in money supply causing inflation to rise and a decrease calling inflation to fall. Real GDP is supposed to be independent of the money supply as it is not meant to be affected by inflation.
If a situation arises where real GDP is not actually independent of the money supply then that means that it is not independent of inflation either. Should the money supply therefore rise, the effect on the prices of goods and services (real GDP) in the economy will be unpredictable as it might go either way.
You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.25 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?
Answer:
The answer is "1.75"
Explanation:
The portfolio is equally weighted with three parts, which each weighs 33,33%. The risk-free asset (Rf) is available worldwide and beta 0 is given for the market portfolio.
[tex]Return \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Beta \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Probability (Pi)\\\\\text{Risk free Return (Rf)} \ \ \ \ \ \ \ \ \ \ \ 0 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\Stock 1\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1.25 \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\Stock 2\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ ? \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 33.33\%\\\\[/tex]
[tex]\text{Portfolio Beta = (Pi Rf * Beta Rf) + (Pi Stock1 * Beta Stock1) + (Pi Stock2 * Beta Stock2)}\\\\1 = (33.33\% \times 0) + (33.33\% \times 1.25) + (33.33\% \times x)\\\\1 = 0 + 0.416625 + 0.3333x\\\\1 - 0.416625 = 0.3333x\\\\0.583375 = 0.3333x\\\\x =\frac{0.583375}{0.3333}\\\\x = 1.75[/tex]
The following data relate to a company that produces and sells a travel guide that is updated monthly: Each book sells for $20.00. The company sold 8,000 books in June and 10,000 books in July. The unit contribution margin per book is:
Answer:
10.30
Explanation:
20
8000
160 000 June
10000
200 000 July
20 - 3.20 -4 - .50 -2 = 10.30
costs:Printing and binding...............................$3.20 per copyBookstore discounts................................$4.00 per copySalespersons’ commissions....................$0.50 per copyAuthor’s royalties...................................$2.00
The SRT partnership agreement specifies that partnership net income be allocated as follows in the following order: Partner S Partner R Partner TSalary allowance $20,000 $25,000 $15,000Interest on avg. capital balance 10% 10% 10%Remainder 30% 30% 40%Average capital balances for the current year were $60,000 for S, $50,000 for R, and $40,000 for T.Refer to the information given. Assuming no restrictions and current year net income of $45,000, what amount should be allocated to each partner? Partner S Partner R Partner TA) $17,000 $21,000 $7,000B) ($9,000) ($9,000) ($12,000)C) $13,500 $13,500 $18,000D) $22,500 $22,500 $0
Solution :
Note 1
calculation of remaining income after distribution of salary and interest on capital.
Total Net Income $ 45,000
Less : Salary allowance $ 60,000
($20,000 + $25,000 + $15,00)
Less : Interest on capital $ 15,000
($ 6,000 + $ 5,000 + $ 4,000)
Remaining income / (loss) to be allocated $ 30,000
Since the remaining income is negative, i.e. it loss to the SR partnership, so such Loss will also be allocated to the partners. Since in a partnership, Partners are required to share profits as well as losses. Hence, such loss will be deducted from the other shares.
Scheduled of amount allocated to each partner
Partners S Partner R Partner T
a). Salary allowance allocated $ 20,000 $ 25,000 $ 15,000
b). Interest on average capital $ 6000 $ 5000 $ 4000
balance allocated.
c). Remaining income allocated $ 9000 $ 9000 $ 12,000
Total allocation (a + b - c) : $ 17,000 $ 21,000 $ 7,000
Under variable costing, fixed manufacturing overhead is: Multiple Choice applied directly to Work-in-Process Inventory. expensed immediately when incurred. never expensed. treated in the same manner as variable manufacturing overhead.
Answer: expensed immediately when incurred.
Explanation:
Under variable costing, only variable costs can be apportioned to the product as product costs. This means that fixed costs have to be expensed immediately they are incurred so that they do not feature in the product costs.
It is not a widely used principle as both U.S. GAAP and IFRS don't allow for its use in financial statements. They prefer absorption costing where fixed costs are apportioned to the products created.
The Lime Corporation has obtained the following sales forecast data:
July August September October
Cash sales $ 80,000 $ 70,000 $ 50,000 $ 60,000
Credit sales $ 240,000 $ 220,000 $ 180,000 $ 200,000
The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted cash receipts for October would be:_________
a. $188.000
b. $248,000
c. $226,000
d. $278,000
e. none of above
Answer:
b. $248,000
Explanation:
The computation of the cash receipts for October would be
Particulars October
Cash sales $60000
August credit Sales $22000 (10% of $220,000)
September Credit Sales $126000 (70% of $180,000)
October credit Sales $40000 (20% of $200,000)
Budgeted cash receipt $248000
Hence, the correct option is b.
The responsibility report for a revenue center would compare:___.
A. actual revenues to budgeted revenues.
B. actual revenues and costs to budgeted revenues and costs.
C. actual profits to budgeted profits.
D. actual costs to budgeted costs.
Answer:
A. actual revenues to budgeted revenues.
Explanation:
Revenue center deals with quantity sold and sales prices. Therefore it keeps track of differences between Actual (Quantity x Price) and Budgeted (Quantity x Price).Thus, The responsibility report for a revenue center would compare: A. actual revenues to budgeted revenues.
packaging materials for processed
Answer:
Types of packaging material used in food
Plastics. Plastics are organic polymeric materials that can be molded into the desired shape. ...
Metals (steel, tin, aluminum) The main use of these metals is the preservation of canned foods and beverages. ...
Glass. ...
Wood, cardboard and papers. ...
Advances in packaging techniques.
Onslow Co. purchases a used machine for $178,000 cash on January 2 and readies it for use the next day at a $2,840 cost. On January 3, it is installed on a required operating platform costing $1,160, and it is further readied for operations. The company predicts the machine will be used for six years and have a $14,000 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.
Required:
1. Prepare journal entries to record the machine’s purchase and the costs to ready and install it.
Cash is paid for all costs incurred.
2. Prepare journal entries to record depreciation of the machine at December 31 of (a) its first year in operations and (b) the year of its disposal.
Prepare journal entries to record the machine’s disposal under each of the following separate assumptions: (a) it is sold for $15,000 cash; (b) it is sold for $50,000 cash; and (c) it is destroyed in a fire and the insurance company pays $30,000 cash to settle the loss claim.
Answer:
Onslow Co.
Journal Entries:
1. Jan. 2: Debit Equipment $178,000
Credit Cash $178,000
To record the cash payment for equipment purchase.
2. Jan. 3: Debit Equipment $4,000
Credit Cash $4,000
To record the cash payment for readying the equipment for use.
3. Dec. 31: Debit Depreciation Expense $28,000
Credit Accumulated Depreciation $28,000
To record depreciation expense for the first year.
4. Dec. 31, Year 5: Debit Equipment Disposal$178,000
Credit Equipment $178,000
To transfer the equipment account to the Equipment Disposal account.
Debit Accumulated Depreciation $140,000
Credit Equipment Disposal $140,000
To transfer accumulated depreciation to the Equipment Disposal account.
a) Debit Cash $15,000
Credit Equipment Disposal $15,000
To record the cash proceeds from sale of equipment.
Debit Loss on Sale of Equipment $23,000
Credit Equipment Disposal $23,000
To record the loss on Equipment Disposal.
b) Debit Cash $50,000
Credit Equipment Disposal $50,000
To record the cash proceeds from sale of equipment.
Debit Sale of Equipment $12,000
Credit Gain on Sale of Equipment $12,000
To record the gain on Equipment Disposal.
c) Debit Cash $30,000
Credit Equipment Disposal $30,000
To record the cash proceeds from insurance company.
Debit Loss on Disposal $8,000
Credit Equipment Disposal $8,000
To record the loss on Equipment Disposal.
Explanation:
a) Data and Calculations:
January 2: Cost of used machine = $178,000
January 3: Readying costs = $4,000 ($2,840 + $1,160)
Estimated useful life = 6 years
Estimated salvage value = $14,000
Depreciable amount = $168,000 ($182,000 - $14,000)
Depreciation method = straight-line method
Annual depreciation expense = $28,000 ($168,000/6)
Accumulated depreciation at December 31, Year 5 = $140,000 ($28,000*5)
Disposal date = December 31, Year 5
Journal Entries Analysis:
1. Jan. 2: Equipment $178,000 Cash $178,000
2. Jan. 3: Equipment $4,000 Cash $4,000
3. Dec. 31: Depreciation Expense $28,000 Accumulated Depreciation $28,000
4. Dec. 31, Year 5: Equipment Disposal $178,000 Equipment $178,000
Accumulated Depreciation $140,000 Equipment Disposal $140,000
a) Cash $15,000 Equipment Disposal $15,000
Loss on Sale of Equipment $23,000 Equipment Disposal $23,000
b) Cash $50,000 Equipment Disposal $50,000
Equipment Disposal $12,000 Gain on Sale of Equipment $12,000
c) Cash $30,000 Equipment Disposal $30,000
Loss on Disposal $8,000 Equipment Disposal $8,000
Lãi suất tiền gửi và cho vay của Việt nam hiện tại là bao nhiêu?
Answer:
?????
Explanation:
The Cavy Company accumulated
560 hours of direct labor on Job 345
800 hours of direct labor on Job 777
The direct labor incurred at a rate of:
$20 per direct labor hour for Job 345
$21 per direct labor hour for Job 777
Journalize the entry and record the flow of labor costs in production.
Answer:
Date Journal Entry Debit Credit
Work in Process $28,000
((560*$20) + (800*$21)
Wages payable $28,000
(To record the flow of labor costs in production)
A French family flies from Paris, France to New York City where they have a brief layover before flying to Montreal, Canada. While in New York the family has a $25 dollar lunch at a hot dog stand near Time Square. How does this lunch contribute to U.S. GDP?
a. U.S. GDP remains unchanged, but French GDP increases by 22 Euros ($25 U.S.).
b. GDP decreases by $25
c. GDP increases by $25
d. GDP does not change since the family is not from the U.S.
Answer:
C
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Consumption spending includes spending by households on goods and services. Consumption spending includes :
spending on durables - e.g. buying a laptop
spending on nondurables - e.g. buying clothes, food
spending on services - e.g. payment of hospital bill
the purchase of a textbook by a student is an example of consumption spending on durable goods
Investment - It includes purchases of goods and services made by businesses in the production of goods and services
Government spending - It includes government consumption expenditure and gross investment. The purchase of a new limousine for the president is an example of consumption expenditure
Net export = export - import
the purchase of hotdog constitutes consumption of non durable goods and this would increase US GDP by $25
Charles Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit Percent of Sales
Selling Price $190 100%
Variable Expenses 38 20%
Contribution Margin 152 80%
Fixed expenses are $87,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $28. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month:
Direct materials $86,000
Direct labor $43,500
Variable manufacturing overhead $21,800
Fixed manufacturing overhead 33,100
Total manufacturing overhead $54,900
Variable selling expense $15,400
Fixed selling expense 24,800
Total selling expense $40,200
Variable administrative expense $5,700
Fixed administrative expense 28,400
Total administrative expense $34,100
Required:
a. What is the total product cost?
b. What is the total period cost?
Answer:
Results are below.
Explanation:
The product costs are all the expenses incurred in production being direct and indirect:
Direct materials= 86,000
Direct labor= 43,500
Variable manufacturing overhead= 21,800
Fixed manufacturing overhead= 33,100
Total product cost= $184,400
The period costs are all the expenses not involved in production (selling and administrative):
Variable selling expense= 15,400
Fixed selling expense= 24,800
Variable administrative expense= 5,700
Fixed administrative expense= 28,400
Total period cost= $74,300
Stock Rit Rmt ai Beta
A 10.6 15Â Â Â 0 0.8
Z Â 9.8 8 0 1.1
Rit = return for stock i during period t
Rmt = return for the aggregate market during period t
What is the abnormal rate of return for Stock Z during period t using only the aggregate market return (ignore differential systematic risk)?
a. 3.40
b. 4.40
c. 1.80
d. -4.40
E.
-1.70
Answer:
1.8 option c
Explanation:
this question has a very simple solution
the following definitions
Rit = return for stock i during period t
Rmt = return for the aggregate market during period t
The abnormal rate of return for stock z is = Rit - Rmt
Rit = 9.8
Rmt = 8
9.8 - 8 = 1.8
therefore the abnormal rte of return for stock z is = 1.8, which is option c
During the year, Wright Company sells 500 remote-control airplanes for $120 each. The company has the following inventory purchase transactions for the year. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 40 $ 68 $ 2,720 May. 5 Purchase 270 71 19,170 Nov. 3 Purchase 220 76 16,720 530 $ 38,610 Calculate ending inventory and cost of goods sold for the year, assuming the company uses specific identification. Actual sales by the company include its entire beginning inventory, 250 units of inventory from the May 5 purchase, and 210 units from the November 3 purchase.
Answer:
Wright Company
Cost of goods sold = $36,430
Ending inventory = $2,180
Explanation:
a) Data and Calculations:
Date Transaction Number of Units Unit Cost Total Cost
Jan. 1 Beginning inventory 40 $ 68 $ 2,720
May. 5 Purchase 270 71 19,170
Nov. 3 Purchase 220 76 16,720
Total available for sale 530 $ 38,610
Specific identification of Sales of 500 units:
Cost of goods sold:
Jan. 1 Beginning inventory 40 $ 68 $ 2,720
May. 5 Purchase 250 71 17,750
Nov. 3 Purchase 210 76 15,960
Total 500 $36,430
Cost of goods sold = $36,430
Ending inventory:
May. 5 Purchase 20 71 $1,420
Nov. 3 Purchase 10 76 760
Total 30 $2,180
Ending inventory = $2,180
MacKenzie Company sold $400 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 2.0% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made. The journal entry to record this sale transaction would be:
Answer:
Date Account Title Debit Credit
XX-XX-XXXX Cash $392
Credit card service charge $ 8
Sales $400
Working
Cash :
= 400 * (1 - 2% service charge)
= $392
Credit card service charge:
= 400 * 2%
= $8
Profit margin is synonymous with the term _______ and tells whether or not total profit will be positive.
Answer: Average profit
Explanation:
Both average profit and profit margin show the percentage of profit that a company can expect to receive from $1 worth of sales. It is calculated by dividing the profits by the sales figure,
If sales are $10 and profits are $3, the profit margin would be:
= 3/10
= 30%
This means that for every $1 of sales, there is $0.30 in profit. This method shows us whether the total profit will be negative or positive by showing us individual product profit.
Asteria earned a $27,000 salary as an employee in 2020. How much should her employer have withheld from her paycheck for FICA taxes
Answer:
$2,070
Explanation:
Calculation to determine How much should her employer have withheld from her paycheck for FICA taxes
Social security tax 6.2%
Medicare tax which is 1.45%
Social security tax = $27,000 x 6.2%
Social security tax = $1,674
Medicare tax = $27,000 x 1.45%
Medicare tax =$391.5
FICA taxes Paycheck withheld= - $1,674 + $391.5
FICA taxes Paycheck withheld=$2,065.5
FICA taxes Paycheck withheld=$2,070 (Approximately)
Therefore How much should her employer have withheld from her paycheck for FICA taxes will be $2,070
Aug. 1 Madison Harris, the owner, invested $10,250 cash and $44,075 of photography equipment in the company.
2 The company paid $3,900 cash for an insurance policy covering the next 24 months.
5 The company purchased office supplies for $1,948 cash.
20 The company received $3,050 cash in photography fees earned.
31 The company paid $866 cash for August utilities.
Prepare general journal entries for the above transactions.
Answer and Explanation:
The journal entries are shown below:
(i) On August 1,
Cash A/c Dr. $10,250
photography equipment A/c Dr. $44,075
To common stock $54,325
(Being the issuance of common stock for cash and photography equipment is recorded)
(ii) On August 2,
Prepaid insurance A/c Dr. $3,900
To cash $3,900
(Being the cash paid in advance for insurance is recorded)
(iii) On August 5,
Office supplies A/c Dr. $1,948
To cash $1,948
(Being the cash paid for office supplies is recorded)
(iv) On August 20,
Cash A/c Dr. $3,050
To photography fees earned $3,050
(Being the photography fees earned is recorded)
(v) On August 31,
Utilities A/c Dr. $866
To cash A/c $866
(Being the cash paid for utilities)
Around the world oil is priced consistently in United States dollars. In economic terms this is an example of:
Answer: unit of account
Explanation:
The unit of account is function of money which refers to the standard monetary unit of measurement of a good or service.
Since oil is priced consistently in United States dollars around the world, this means that dollars is the standard monetary unit of measurement and is therefore, the unit of account.
For each of the following events, explain the short-run and long-run effects on output and the price level, assuming open economy and that policymakers take no action.
a. The stock market declines sharply, reducing consumers’ wealth.
b. The federal government increases spending on national defense.
c. A technological improvement raises productivity.
d. A recession overseas causes foreigners to buy fewer U.S. goods.
Answer:
High prices of products as well as increases poverty.
Explanation:
The stock market declines sharply, reducing consumers’ wealth that leads to high prices of products as well as increases poverty. The federal government increases spending on national defense that decreases the foreign reserves and money for other fields of the country. A technological improvement raises productivity which increases the economy of the country as well as standard of living. A recession overseas causes foreigners to buy fewer U.S. goods that leads to lower income of the country and purchasing power of the country. Due to this, there is less money for other fields and institutions.
Answer:
b. The federal government increases spending on national defense.
Explanation:
Hope this helps
The cost of capital for a firm with a 60/40 debt/equity split, 4.86% cost of debt, 15% cost of equity, and a 35% tax rate would be:______.
Answer: 7.9%
Explanation:
The weighted cost of capital for a firm shows the cost of capital from all sources that fund the business including stock and long term liabilities.
Formula is:
= (Weight of equity * cost of equity) + (Weight of debt * (cost of debt * (1 - tax rate) ))
= (0.4 * 0.15) + ( 0.6 * ( 0.0486 * ( 1 - 35%)))
= 0.06 + 0.018954
= 7.895%
= 7.9%