Fiscal Policy

1. Suppose the economy is in recession. The government decides to run a deficit to fund a jobs program. Find equilibrium GDP using the following data:
C = 50 + .7(Y – T)

I = 40

G = 35

T = 20

Xn = -10

2. Now suppose a Balanced Budget Amendment to the Constitution was passed, requiring the government to balance its budget. As a result, government spending is cut in order to balance the budget. Calculate the new level of GDP. Check your answer by using the multiplier method (multiplier x change in spending). What effect will balancing the budget have on GDP and on the recession?

Answers

Answer 1

Based on the economic data given, and the fact that the government is running a deficit, the equilibrium GDP will be 336.67.

If government spending is cut to balance the budget, the new level of GDP will be 321.67.

The effect of balancing the budget will be a decrease in GDP and a slower recovery from the recesssion.

What is the equilibrium GDP?

This is given by the variable "Y" so we can find the equilibrium GDP by solving for it:
C = 50 + .7(Y – T)

Y = C + I + G - XN

C = Y - I - G + XN

Solving gives:

Y - I - G + XN =  50 + .7(Y – T)

Y - 40 - 35 + 10 = 50 + 0.7Y - 14

Y - 0.7Y = 50 + 40 + 35 - 10 - 14

0.3Y = 101

Y = 101/0.3

= 336.67

What is the new GDP if government spending is cut?

Government spending will have to be cut to a size that would make it equal to taxes so government spending becomes 20.

New GDP becomes:

= C + I + G - XN

= ( 50 + .7(Y – T)) + 40 + 20 - 10

= 271.67 + 40 + 20 - 10

= 321.67

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Related Questions

Which of the following illustrates the function of the financial market?

Answers

1. Which of the following is an example of capital loss?

a. An investor sells a bond on the secondary market below the price she paid for it.

2. Nasdaq, the American Stock Exchange, and the OTC market collectively form the

c. stock market

3. Does a low interest rate encourage people to borrow or to save? Explain.

c. A low interest rate encourages people to borrow because interest rates are paid to savers by borrowers, so a low interest rate means a low opportunity cost for borrowing.

4. Define autonomous consumption.

d. Autonomous consumption is the amount that a person must spend on basic needs (such as food and housing) regardless of his or her income.

5. A student borrowed $40,000 for college and, over the course of the loan, repaid $55,000. What was the principal of the loan?

d. $40,000

Hope this helps! :)

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Answers

Answer:

A) cheque

B) Bank statement

C) Receipt

D) Invoice

Which of the following is NOT a role of banks?
Question 1 options:
Pool savings of many to make large loans
Charge depositors interest on their savings
Spread the risk of loans among many lenders
Evaluate loan applicants

2. Banks banks do all of the following with the money you deposit except:
Question 2 options:
Keep it in the vault for safety
Loan is out to borrowers
Offer a safe place to store your money
Payless interest on deposits than they charge borrowers

Answers

The function that is not a role for bank is C. Spread the risk of loans among many lenders

What is a bank?

A bank simply means a financial institution that keeps money for their customers. Banks pool savings of many to make large loans and harge depositors interest on their savings.

Also, banks do all of the following with the money you deposit except keep it in the vault for safety.

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Fill in the blank.

A _______ offers some protection for your personal finances.

A _______ is the best choice when you want full creative control over your business.

A company belongs to its _______.

An advantage of a ________ is that management specialists run the company.

_______ can provide reliable and valuable legal advice

Answers

Answer:

close corporation

sole proprietorship

stockholders

corporation

small business administration

Explanation:

PF

Answer:

close corporation

sole proprietorship

stockholders

corporation

small business administration

Explanation:

in an organization , who should be concerned with HRM

Answers

Hrm stands for human resources management and it is up to supervisors, managers and directors be active in hrm.

Faulk Corporation uses a process costing system for its two production departments: Mixing and Baking. The company provided the following manufacturing cost information for the month of June.

Beginning work in process $ 500 $ 1,000
Costs transferred in ? ?
Costs incurred in May 5,000 9,000
Ending work in process 1,500 3,000

a. Record the transfer of costs from the Mixing Department to the Baking Department in June.
b. Record the transfer of costs from the Baking Department to Finished Goods Inventory in June.

Answers

the answer would be A

Which one of the following statements concerning the random walk hypothesis is​ correct?
Question content area bottom
Part 1
A.
Stock prices in general follow repetitive patterns but the actions of individual investors are random in nature.
B.
Random price movements indicate that investors can earn abnormal profits on a routine basis.
C.
Stock prices respond to new information.
D.
Stock price movements are predictable but only over short periods of time.

Answers

Answer:

The answer C) Stock prices respond to new information

Explanation:

Randon walk hypothesis is a financial theory stating that stock market prices evolve on random basis. Stock prices cannot be predicted. It is consistent with efficient market hypothesis.

Which type of savings institution offers a range of services to its customers including savings accounts, checking accounts, and money market accounts, and also makes loans and investments and buys government bonds?

O A. Credit union
O B. Savings and loan institution
O C. Savings bank
O D. Commercial bank​

Answers

Answer:

commcommercial bank

Explanation:

Took the test

You work as a cashier at the local Grocery Store and make $ 9.00 per hour. You worked 6 hours on
Monday, Tuesday, Wednesday, and Thursday. What is your gross salary?


Can anyone help me with this pleaseee?

Answers

Answer:

$216.00

Explanation:

1 day = 6hrs

4 days = 24hrs

1hr = $9.00

24hrs = ?

24×9.00/1

= $ 216.00

One reason why, in the lust four decades, the number of new auto makers in the world has been very small compared to the past is that :_________ a) the automobile cannot be improved upon in any way by new producers b) new auto makers cannot obtain necessary inputs to produce new cars c) governments restrict who can produce automobiles d) new producers cannot match the economies of scale of existing auto makers

Answers

Answer:

DD

Explanation:

The best way to calculate simple interest is to:
O A. divide the interest rate by the length of the loan and then subtract
the monthly payment.
O B. multiply the amount borrowed by the compound interest rate.
O C. multiply the amount borrowed by the interest rate and by the
length of the loan.
O D. subtract the compounded interest from the amount borrowed.

Answers

Answer:

The answer is C

Explanation:

It's C because the formula for simple interest is PRT/100 in which the amount borrowed is the P, the R is the interest rate and the T is the length of the loan you multiply all that and divide by 100 which was however not mentioned in the statement but rest assured that is the correct answer

A company's ________________________ may play a role in pricing. Which answer completes the blank in the sentence?

Question 3 options:

revenue


stock value


target market


sales

Answers

The answer that would best complete the blank is "revenue" as it would play a key role in pricing.

What is Revenue?

This refers to the total amount of income that is gotten from the sale of goods in a marketplace.

Hence, we can see that when pricing a company based on its value, the revenue of the company would be important as it may play an important role in pricing.

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Individuals join groups for two primary reasons: to enjoy the company of others and to accomplish goals unattainable by themselves. True False

Answers

The given statement about the reasons why individuals join groups is True.

What is a Group?

This refers to the collection of individuals in unison to achieve a set goal or to expand their interests, leveraging on the network of other members.

Hence, we can see that the given statement that Individuals join groups for two primary reasons: to enjoy the company of others and to accomplish goals unattainable by themselves is true.

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Discuss briefly the statement about the meaning of forecasting .

Answers

Answer:

Anticipating is a procedure that involves verifiable information as contributions to make informed gauges that are prescient in deciding the heading of future patterns. Organizations use guaging to decide how to distribute their financial plans or plan for expected costs for a forthcoming timeframe.

Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.Businesses utilize forecasting to determine how to allocate their budgets or plan for anticipated expenses for an upcoming period of time. This is typically based on the projected demand for the goods and services offered.

Which expense has to be incurred at the time of Production?
a)fixed
b)variable

Answers

Both but fixed goes first so a is correct

Both Jarek and Kalene produce scarves and rings. However, Kalene is better at producing both goods. In this case, trade could :___________
a) benefit both Kalene and Jarek. b) benefit Kalene, but not Jarek, c) benefit Jarek, but not Kalene.
d) " benefit neither Kalene nor Jarek.

Answers

Answer:

The answer is Benfit both kalene and jarek

Explanation:

It can help them both out in ways.

-Justin:)

0r2
Question 3
You've been saving and currently have $20,000 in a savings account earning 1.5% APR. What is the value after 10
years?.
You've been saving and currently have $20,000 in a savings account earning 1.5% APR. What is the value after 10
years?

Answers

Answer:

I believe for this particular equation you just want to use the equation for simple interest: I = P * r * t

Explantion:

I = Interest

P = principal

r = rate

t = time

change the rate: 1.5% into a decimal: 1.5/100 = .015 and plug in the values

I = 20,000 * (.015*10)

I = 20,000 * .15

I = 3000

add the interest to the principal to get the value after 10 years

20,000 + 3000 = 23,000

giving you $23,000 after 10 years.

Question 2
What is the definition of financial bootstrapping?

Answers

Answer:

Bootstrapping is the process of building a business from scratch without attracting investment or with minimal external capital. It is a way to finance small businesses.

hope it helps...!!

#14 Diagnosis reference numbers are entered on the CMS-1500 claim to:

a. report mortality data
b. justify medical necessity
c. analyze quality of services provided
d. report morbidity data

Answers

Answer:

analyse quality of service provided .

Explanation:

The Diagonsis reference number is useful thingIt is used to determine the importance of service provided and the relationship with providers. It starts from primary diagnosis

Option C

Performance reports with more than one cost driver typically have more accurate variances than those based on one cost driver.
a) true
b) false

Answers

Answer:

true

Explanation:

I got it right lol

how are emailed cover letters different from paper cover letters? why is there a diffrence?​

Answers

Answer: The email app is shaped as if the app is a mail paper but different because it’s an APP, when you open it’s a list and it shows the profile picture of the person who emailed.

Explanation: The is simply because it’s the internet.

Answer: its D (formal cover letter)

Explanation:

on edge

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICA
Medicare taxes are 1.45% of gross pay, For BMX, Its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid
to its employee.
of 3
Gross Pay through
August 31
$ 6,400
2,000
131,400
Gross Pay for
September
$ 800
2,100
8,000
b.
C.

Answers

BMX’s amounts for the taxes for September is:FICA - Social Security $49.60; FICA - Medicare $11.60; FUTA  $3.60; SUTA $32.40.

BMX’s amounts for each of the four taxes

a. FICA - Social Security  = $800 x 6.2% = $49.60

FICA - Medicare  = $800 x 1.45% = $11.60

FUTA  =$600 x 0.6% = $3.60

($7,000 - $6,400=$600)

SUTA = $600 x 5.4% = $32.40

($7,000 - $6,400=$600)

b. FICA - Social Security  = $2,100 x 6.2% = $130.20

FICA - Medicare  = $2,100 x 1.45% = $30.45

FUTA  = $2,100 x 0.6% = $12.60

SUTA = $2,100  x 5.4% = $113.40

c. FICA - Social Security =$6,300 x 6.2% =$390.60

($137,700 - $131,400)

FICA - Medicare =$8,000 x 1.45% =$116.00

FUTA  =$0 x 0.6% =$0

SUTA = $0 x 5.4%=$0

Inconclusion the BMX’s amounts for the taxes for September is:FICA - Social Security $49.60; FICA - Medicare $11.60; FUTA  $3.60; SUTA $32.40.

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Consider a competitive labor market. Using the model of how income is determined in a labor market, describe the effects on wages and number of individuals employed of an increase in the productivity of labor in that market. What will happen and why? In your answer, be sure that you describe why the supply and demand curves are shaped as they are.

What would happen to wages and number of individuals employed in that market if new law required all businesses in that market and other markets to provide their employees a better health insurance policy? Why? Use your analysis to explain who actually pays the costs of health insurance premiums in competitive labor markets.

Answers

If there is an increase in labor productivity, there will be an increase in wages and an increase in individuals employed.

If better insurance policies are mandated by the government then wages and the number of people employed will both decrease.

This shows that the entity that actually pays the costs of health insurance premiums is employers.

What happens when labor productivity rises?

When there is an increase in labor productivity, employers will demand more employees in order to produce more. This will shift the labor demand curve to the right.

The new intersection of the demand curve with the supply curve will see an increase in the wage rate and in the quantity of those employed in the labor market.

What happens if better insurance policies are imposed?

If the government mandates that employers should provide better insurance policies, it means that employers will start paying more in insurance premium contributions.

This increased cost of labor will lead to employers demanding less employees which will lead to a decrease in the wage rate and in the number of those employed.

This shows that employers are mostly the ones who pay for health insurance premiums which is why an increase in these premiums will increase the cost of labor for them.

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Gus was recently laid off, and he is struggling to pay his bills and make ends meet. Gus is meeting with a staffing agency later in the week. As he prepares for the meeting, what should Gus say about his former company

Answers

Answer:

“I was able to learn from this experience. I now know what not to do in my next job.”

Explanation:

“I was able to learn from this experience. I now know what not to do in my next job.”

Martha Crooks runs a second-hand furniture store from a shop which she rents. She does not
keep complete accounting records but is able to provide you with the following information
about her financial position at January 1 2016: inventory of furniture $3,210; Trade accounts
receivable $2,643; Trade accounts payable $1,598; Truck $5,100; Fixtures and Fittings $4,200,
Truck expenses owing $432.

She also provided a summary of her bank account for the year ended December 2016.
$ $
Balance b/d at Jan 1 2015 2,420 Payments of trade payables 22,177

Cheques received from trade receivables $44,846
Cash sales $3,921

Electricity $1.090
Telephone $360
Rent $ 2000
Advertising & Promotion $1430
Fixtures and Fittings $2550
Insurance $946
Truck expenses $ 2116
Drawings $16,743
Balance at Dec 31 2016 $1775

All cash and cheques received were paid into the bank account immediately.
Additional information:
1. Depreciation is to be written-off the trucks at 20% and off the Fixtures and Fitting at
10 %, calculated on the book values at Jan 1, 2016 plus additions during the year.
2. At Dec 31 2016, truck expenses owing were $291, and insurance paid in advance was
$177

3. Included in the amount paid for Fixtures and fittings were:
A table bought for $300, which Crooks resold during the year at cost, some wooden
shelving (cost $250), which Crooks used in building an extension to her house,
Other balances at 31 December 31 2016 were:

$
Trade accounts receivable 4,021
Trade accounts payable 2,445
Inventory of furniture 4,063

Required:
A. Prepare the following for the year ended 31 December 2016
i. Statement of Affairs (8 marks)
ii. Accounts payable and Accounts receivable accounts (14 marks)
iii. Income Statement (21 marks)
iv. Balance sheet

Answers

A. The preparation of the following financial statements and accounts for the year ended 31 December 2016 for Martha Crooks is as follows:

i. Statement of Affairs

Capital, Beginning              $15,543

Net income                          $18,710

Drawings                           ($16,993)

Capital, Martha Crooks     $17,260

Total liabilities + Capital  $19,996

ii. Accounts payable account:

Beginning balance $1,598

Payments of trade payables 22,177

Ending balance 2,445

Purchases = $23,024

Accounts receivable account:

Beginning balance $2,643

Cheques received from trade receivables $44,846

Ending balance 4,021

Credit Sales = $46,224

iii. Income Statement

Sales Revenue                              $50,145

Cost of goods sold                          22,171

Gross profit                                   $27,974

Expenses:

Truck expenses                $1,975

Electricity                          $1,090

Telephone                          $360

Rent                                 $2,000

Advertising & Promotion $1,430

Depreciation on Fixtures  $620

Depreciation on Trucks  $1,020

Insurance expense            $769 $9,264

Net income                                 $18,710

iv. Balance sheetAssets:

Cash balance                             $1,775

Trade accounts receivable      $4,021

Prepaid insurance                        $177

Inventory of furniture              $4,063

Truck                                         $5,100

Less Depreciation                  ($1,020)

Fixtures and Fittings               $6,200

Less Depreciation                    ($620)

Suspense                                   $320

Total assets                          $19,996

Liabilities:

Trade accounts payable       $2,445

Truck expenses owing             $291

Total liabilities                      $2,736


Capital, Beginning              $15,543

Net income                          $18,710

Drawings                           ($16,993)

Capital, Martha Crooks     $17,260

Total liabilities + Capital  $19,996

Data and Calculations:

January 1, 2016 balances:

Cash balance $2,420

Trade accounts receivable $2,643

Inventory of furniture $3,210

Truck $5,100

Fixtures and Fittings $4,200

Trade accounts payable $1,598

Truck expenses owing $432

Sales:

Cash sales       $3,921

Credit sales  $46,224

Total sales = $50,145

Trade accounts receivable $2,643

Cheques received from trade receivables $44,846

Trade accounts receivable 4,021

Credit Sales = $46,224 ($44,846 + $4,021 - $2,643)

Purchases:

Trade accounts payable $1,598

Payments of trade payables 22,177

Trade accounts payable 2,445

Purchases = $23,024 ($22,177 + $2,445 - $1,598)

Cost of goods sold:

Inventory of furniture $3,210

Purchases $23,024

Less ending inventory ($4,063)

Cost of goods sold = $22,171

Truck Expenses:

Truck expenses owing $432

Truck expenses payment $2,116

Unpaid truck expenses $291

Truck expenses = $1,975

Truck expenses $1,975

Electricity $1,090

Telephone $360

Rent $2,000

Advertising & Promotion $1,430

Insurance expense $769

Insurance Expenses:

Insurance payment $946

Advance payment    $177

Insurance expense = $769

Drawings = $16,993 ($16,743 +$250)

Fixtures and Fittings $6,200 ($4,200 + $2,550 - $300 - $250)

Beginning Balance Sheet

On January 1, 2016:

Cash balance                        $2,420

Trade accounts receivable  $2,643

Inventory of furniture            $3,210

Truck                                     $5,100

Fixtures and Fittings           $4,200

Total assets                       $17,573

Liabilities:

Trade accounts payable   $1,598

Truck expenses owing        $432

Total liabilities                 $2,030


Capital, Martha Crooks  $15,543

Total liabilities + Capital $17,573

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Although they may be subtle, when considering forces for change, job dissatisfaction, absenteeism, and low productivity represent:___________ a) human resources concerns. b) managers' behavior. c) technological advancements. d) demographic characteristics.

Answers

The factors of absenteeism, low productivity, and job dissatisfaction when considering forces of change are collectively known as A. Human resource concerns.

What are human resource concerns?

These are all the related factors that affect the labor and workforce of an organization.

Some examples include job dissatisfaction, and low productivity. There are also issues of absenteeism amongst staff. These factors need to be considered when trying to instill change in the workforce.

In conclusion, option A is correct.

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Heath Company uses 10,000 units of a part in its production process. The costs to make a part are: direct material, $12; direct labor, $25; variable overhead, $13; and applied fixed overhead, $30. Heath has received a quote of $55 from a potential supplier for this part. If Heath buys the part, 70 percent of the applied fixed overhead would continue. Heath Company would be better off by Select one: a. $160,000 to manufacture the part b. $40,000 to buy the part c. $150,000 to buy the part d. $50,000 to manufacture the part.

Answers

Answer: 40,000 to buy the part

Explanation:

Cost to buy : $55/ 10,000= 550,000


Cost to manufacture: (12+25+13+9)=59


The difference: $4/10,000= 40,000

All of the following are criterion for team success when using collaboration IS except ______.
a) Completing the work on time
b) Satisfying experience
c) Completing the work within budget
d) Non- meaningful experience
e) Growth in team capability

Answers

The answer to your question is option C- Completing the work within the budget

All of the following are criteria for team success when using collaboration IS except Completing the work on time.

The answer is option A.

What factors improve teamwork and success?

Collaboration, cooperation, and opposition work collectively enhance teamwork, and as we improve in one place, it is able to result in blessings in any other, developing momentum so that it will lead us to optimal overall performance.

The six elements are role clarity, belief, activity pride, commitment to the company, motivation, and empowerment. If you observe any person in your group, you may describe your relationship with her or him by looking at: position readability: How clean it's far to this character what behaviors and tasks you assume.

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What do you think are the most important trends that will influence marketing in domestic and international markets?

Answers

The most important international and domestic marketing trends are growing emerging markets, innovation, informed buyers, and business competition.

What are the influential trends in domestic and international marketing?

1. Growing marketing trends:

As they get closer to the developed world's living standards, developing countries will witness the most economic growth.

Consider selling into one of these emerging markets if you want your company to flourish quickly.

Language, financial stability, the economy, and local cultural characteristics can all have an impact on which markets you should invest in.

2. Speed of Innovation

As more new businesses emerge, the rate of innovation accelerates, resulting in new products and improved versions of old favorites.

Western corporations can no longer expect to be at the forefront of technological progress by default, and this trend will only accelerate as more enterprises in developing countries obtain the skills necessary to innovate successfully.

3. More Informed Buyers

Customers everywhere may buy things created anywhere in the world and get information about what to buy thanks to more intensive and faster communications.

Businesses will lose pricing power if pricing and quality information become available across all markets, particularly the ability to set different prices in different marketplaces.

4. Increased Business Competition

Western corporations will face growing rivalry as more businesses enter international markets.

Because developing-market companies frequently have lower labor costs, Western corporations must stay up with faster and more effective innovation, as well as a high degree of automation.

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Suppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama. This is an example of foreign investment in the United States. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. Providing tax breaks and patents for firms that pursue research and development in health and sciences Increasing taxes on income from savings Imposing restrictions on foreign ownership of domestic capital Protecting property rights and enforcing contracts In less developed countries, what does the term brain drain refer to? Rapid population growth that lowers the stock of capital per worker The emigration of highly skilled workers to rich countries Rapid population growth that increases the burden on the educational system Lower productivity due to a malnourished workforce

Answers

If Yamahonda does this, it is an example of foreign direct investment in the United States.

The goals that are consistent with increasing productivity and growth are:Protecting property rights and enforcing contracts  In less developed countriesproviding tax breaks and patents for firms that pursue research and development in health and sciences.

What is brain drain?The emigration of highly skilled workers to rich countries.

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