Answer:
a.i $6B
ii. The government should decrease taxes by $7.5B to achieve $30B increase in the level of output.
b. Possible combination:
Increase government spending by $30B.
Decrease taxes by $30B.
Explanation:
Fiscal policy is a way by which a government adjusts its spending levels and tax rates to predict and influence a nation's economy. It is synonymous to monetary policy through which a central bank influences a nation's money supply into the economy. Fiscal policy is divided into two types namely:expansionary or contractionary fiscal policies.
a)
. Government spending multiplier is a direct increase in the level of output (GDP) as a result of one dollar change in government spending.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $30 billion?
Government spending multiplier:
To calculate government spending multiplier (Kg) using MPC:
(1-0.8)*30B
=$6B
The government should increase its spending by $6B in order to archives $30B increase in the level of output.
Tax Multiplier:
Calculate tax multiplier (Kt) by using MPC:
The government should decrease taxes by $7.5B to achieve $30B increase in the level of output.
b) Possible combination:
Increase government spending by $30B.
Decrease taxes by $30B.
Answer:
As a result of the technology change, the price of pollution will be same as price of pollution with pollution permits.
The quantity of pollution with corrective tax will be lower than quantity of pollution with pollution permits.
Explanation:
The pollution permits are issued to reduce pollution by firms. The companies will reduce the pollution and will only be able to emit pollution up to certain limit. The price of pollution with corrective tax will be same as the price of pollution with pollution permits.
The change in technology will effect an increase in the price of pollution due to the increased cost of production factoring in the social cost of pollution, hence shifting the supply curve upward. The quantity of pollution will decrease as firms adopt cheaper technologies for pollution reduction influenced by the corrective tax policy and pollution permits.
The subject of your question is concerned with corrective tax policy and pollution permits in the context of a market economy under the influence of advances in technology. Under the original conditions before the social costs of pollution are taken into account, the equilibrium was met at a pollution price of $15 with a quantity of 440. However, once the external cost of pollution has been factored in, the supply curve shifts upward, creating a new equilibrium at a price of $30 and a quantity of 410, indicating an increase in the cost of pollution and a decrease in its quantity.
These policy instruments (corrective tax and pollution permits) induce companies to invest in technologies that reduce pollution higher costs of pollution as a result of the corrective tax motivate firms to seek cheaper technologies for pollution reduction. Those with less costly ways of lessening pollution will do so to reduce their tax expense, while those who would incur large costs in doing so would opt to pay the tax. The option of pollution permits introduces a marketplace where firms can purchase the right to pollute, the cost of which is again a motivator for firms to reduce pollution. Consequently, the demand for pollution permits among firms will influence their pricing. Firms that can reduce pollution at lower costs will do so the most. With no change in demand for pollution permits or corrective tax policies, the price of pollution will change as a result of the conditions set by these policies, and the quantity will change according to the adoption of more efficient technology.
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The amount that James will have available for a down payment after the five years is $3648.
Down payment is the payment that is given in small divisions for a large amount of money. The cash upfront paid by the buyer in real estate transactions and other significant purchases is known as a down payment on a house.
For a home being used as a primary residence, down payments, which are typically a percentage of the purchase price.
To calculate the amount of available money for the down payment, we should first calculate the 4% of the amount of money which is $3,800
The interest rate is 4%
Calculate the interest rate of the money
4% of 3800 = 152
The amount is then subtracted by $3,800
3800 - 152 = 3648
Therefore, James will have $3648 available for the down payment after 5 years.
To learn more about the down payment, refer to the below link:
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1. Find 4% of 3800: 152
2. 3800-152
3. James will have $3648 available for the down payment after the 5 years.
Answer:
140 pounds of tuna
Explanation:
Lago
Abuta
Lago should produce tuna while Abuta should produce oat. If they specialize:
Lago trades 60 pounds of tuna in exchange for 60 units of oat, so it will have 140 pounds of tuna and 60 units of oat in total.
Answer:
A profit margin of 10% indicates that:
for every $1 in net sales, the company generates $0.10 in net income.
Explanation:
Company B's profit margin measures the degree to which the company makes extra money after deducting the expenses from the sales revenue. When expressed as a percentage, it indicates how many cents of profit has been generated for each dollar of sales.
A profit margin of 10% denotes that for every $1 in net sales, the company produces $0.10 in net income. It is calculated by dividing the net income by the net sales and multiplying the result by 100.
A profit margin of 10% indicates that for every $1 in net sales, the company generates $0.10 in net income. This is because the profit margin is calculated by dividing the net income by the net sales and then multiplying the result by 100 to get a percentage. In this case, a profit margin of 10% signifies that the company is able to generate 10 cents of profit from each dollar of sales.
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Labor-related Direct labor-hours $16,380 1,260 DLHs
Purchase orders Number of orders $1,920 640 orders
Product testing Number of tests $4,275 285 tests
Template etching Number of templates $805 35 templates
General factory Machine-hours $42,600 7,100 MHs
Required:
Compute the activity rate for each of the activity cost pools.
Answer:
a. Labor Cost Rate= 13 $ per DLH
b. Purchase orders Rate= $ 3 per order
c. Product testing Rate = $ 15 per test
d. Template etching Rate = $ 23 per template
e. General factory Rate= $ 6 per MHs
Explanation:
Data
Activity Activity Expected Overhead Expected
Cost Pool Measure Cost Activity
Labor-related Direct labor-hours $16,380 1,260 DLHs
Purchase orders Number of orders $1,920 640 orders
Product testing Number of tests $4,275 285 tests
Template etching Number of templates $805 35 templates
General factory Machine-hours $42,600 7,100 MHs
The activity rate can be obtained by dividing the total cost of each activity with the total cost of the driver allocated to it.
Calculations
Activity Rate = Expected Overhead Cost/ Expected Activity
a. Labor Cost Rate= $16,380 / 1,260 DLHs= 13 $ per DLH
b. Purchase orders Rate= $1,920/ 640 orders= $ 3 per order
c. Product testing Rate = $4,275 /285 tests= $ 15 per test
d. Template etching Rate = $805 /35 templates= $ 23 per template
e. General factory Rate= $42,600/ 7,100 MHs= $ 6 per MHs
Question Completion:
Record the adjusting entries.
Answer:
Adjusting Journal Entries:
Debit Depreciation Expense - Mountain Bikes $6,660
Credit Accumulated Depreciation - Mountain Bikes $6,660
To record depreciation expense for the period.
Debit Insurance Expense $
Credit Prepaid Insurance $
To record the insurance expense for the period.
Debit Rental Expense $
Credit Prepaid Rental $
To record the rental expense for the period.
Debit Office Supplies Expense $700
Credit Office Supplies $700
To record office supplies expense for the period.
Debit Interest Expense $
Credit Interest Expense Payable $
To record interest expense on the $44,000 loan.
Debit Racing Supplies Expense $1,990
Credit Racing Supplies $1,990
To record racing supplies expense for the period.
Debit Income Tax Expense $13,900
Credit Income Tax Payable $13,900
To record income tax expense payable.
Explanation:
Adjusting journal entries are recorded in order to present elements of financial statements based on the accrual basis and not whether cash was paid or received.
In this question, some data were not provided. This is why some figures were not disclosed for Insurance Expense, Rental Expense, and Interest Expense. But, the accounting treatments remain valid. Only the figures are missing.
The subject of this question is Accounting. The year-end adjusting entries involve various financial transactions that need to be adjusted to reflect the company's financial position and performance. Examples include recording depreciation, recognizing expired insurance and rental agreement portions, adjusting remaining supplies and interest expense, and calculating income taxes owed.
The subject of this question is Accounting.
These year-end adjusting entries relate to various financial transactions such as depreciation, insurance, rental agreement, office supplies, interest expense, and racing supplies. The adjustments need to be made to accurately reflect the company's financial position and performance for the year.
Some examples of these adjustments are:
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