An increase in savings by consumers is seen as a(n):_________. a. decrease in investment spending in the economy increase in government spending in the economy.
b. decrease in exports in the economy.
c. increase in imports in the economy.
d. leakage in spending in the economy.

Answers

Answer 1

Answer:

d. leakage in spending in the economy.

Explanation:

In the economy firms spend money on labour, input, and business expansion. While in the personal household there is spending on food, rent, and other expenses.

When money is taken out of this cycle and not used for a particular purpose then it is considered to be a leakage.

Leakages include taxes savings and imports.

Savings occurs when an individual has excess income and decides to reserve some for a future use. This fund does not have a particular use in the economy so it is considered to be a leakage.

Answer 2

Answer:

D. Leakage in spending in the economy.

Explanation:

It is observed that if consumers have a rise in their wages, they tend to benefit and this helps the economic situation of the said country or nation as seen in some economies of the world lately. Also alteration in interest rates can have different consumer effects which ranges from spending habits depending on a number of factors to other habits that may end up boosting the economy also current rate levels, expected future rate changes, confidence of the consumer, and the overall health of the economy.

Related Questions

Coburn (beginning capital, $55,000) and Webb (beginning capital $95,000) are partners. During 2017, the partnership earned net income of $71,000, and Coburn made drawings of $17,000 while Webb made drawings of $25,000. Assume the partnership income-sharing agreement calls for income to be divided 30% to Coburn and 70% to Webb. Prepare the journal entry to record the allocation of net income.
ABC will purchase a machine that will cost $2,575,000. Required modifications will cost $375,000. ABC will need to invest $75,000 for additional inventory. The machine has an IRS approved useful life of 7 years; it is presumed to have no salvage value. ABC plans to depreciate the machine by using the straight-line method. The machine is expected to increase ABC's sales revenues by $1,890,000 per year; operating costs excluding depreciation are estimated at $454,600 per year. Assume that the firm's tax rate is 40%. What is the annual operating cash flow?
What are 3 benefits of the Pay down credit card feature in Quickbooks Online?A. It allows users to electronically pay their credit card balances from within QuickBooks OnlineB. It prevents miscategorization of credit card payment transactionsC. It helps users identify which credit cards have interest rates that are too highD. It provides easy-to-understand language for non-accountant usersE. It prevents common errors that affect the company's financial statementsF. It compares your client's credit card balances side by side
The Murdock Corporation reported the following balance sheet data for 2018 and 2017: 2018 2017 Cash $ 90,695 $ 30,155 Available-for-sale debt securities (not cash equivalents) 21,500 97,000 Accounts receivable 92,000 79,050 Inventory 177,000 155,800 Prepaid insurance 2,580 3,200 Land, buildings, and equipment 1,274,000 1,137,000 Accumulated depreciation (622,000 ) (584,000 ) Total assets $ 1,035,775 $ 918,205 Accounts payable $ 87,140 $ 160,670 Salaries payable 24,800 30,500 Notes payable (current) 35,800 87,000 Bonds payable 212,000 0 Common stock 300,000 300,000 Retained earnings 376,035 340,035 Total liabilities and shareholders' equity $ 1,035,775 $ 918,205 Additional information for 2018: (1.) Sold available-for-sale debt securities costing $75,500 for $81,200. (2.) Equipment costing $20,000 with a book value of $6,200 was sold for $7,800. (3.) Issued 6% bonds payable at face value, $212,000. (4.) Purchased new equipment for $157,000 cash. (5.) Paid cash dividends of $26,000. (6.) Net income was $62,000.Prepare a statement of cash flows for 2018 in good form using the indirect method for cash flows from operating activities.
Which firm is likely to see its profits reduced the most in a recession: an automobile producer, a manufacturer of boots and shoes, or a janitorial service? Which is likely to see its profits reduced the least? Explain.

Project A has a predicted payback period of 2.5 and Project B has a predicted payback period of 5. Based on this information we can conclude that Select one: A. more information should be gathered before deciding on which project, if either, is desirable. B. Project A is preferred to Project B. C. Project B provides twice the return of Project A. D. Project B is preferred to Project A, but it is not necessarily twice as profitable.

Answers

Answer:

A. more information should be gathered before deciding on which project, if either, is desirable.

Explanation:

The lower Payback Period is not sufficient information to decide which project is more profitable. The payback period indicates when in the life of a project the initial investment principal cash flow is achieved.

But to decide about a certain project it is better to know the interest yield, it is also important to get the life of the project and other information.

For example:

a.- 250 investment 100 per year payback in 2.5-year life 3 years

b.- 500 investment 100 per year payback in 5-year life 20 years

While A payback occurs before project B is better

Use the following classification to determine which category each of the following goods falls into. Goods Private Good Club Good Common Resource Public Good Museums that require admission fees Public swimming pools with free admission during summer Metered parking at a municipal parking lot Flood control Public basketball courts

Answers

Answer:

swimming pool is public good. basketball court public good. museums with admission fee are club good, metered parking public good. flood control public good

Explanation:

TB MC Qu. 3-209 Chavez Corporation reported the ... Chavez Corporation reported the following data for the month of July: Inventories: Beginning Ending Raw materials $ 41,000 $ 37,000 Work in process $ 23,000 $ 31,000 Finished goods $ 39,000 $ 54,000 Additional information: Raw materials purchases $ 73,000 Direct labor cost $ 98,000 Manufacturing overhead cost incurred $ 66,000 Indirect materials included in manufacturing overhead cost incurred $ 10,800 Manufacturing overhead cost applied to Work in Process $ 65,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for July is:

Answers

Answer:

The cost of goods manufactured for July is $ 232,000

Explanation:

Raw Materials Inventories Utilized In Production

Beginning Raw materials $ 41,000

Add Purchases $ 73,000

Less Ending Raw materials ($ 37,000)

Used in Production $ 77,000

Cost of goods manufactured

Raw Materials $ 77,000

Direct labor cost $ 98,000

Manufacturing overhead $ 65,000

Total Cost of Manufacturing $ 240,000

Add Opening Work in process $ 23,000

Less Ending Work in process ($ 31,000)

Cost of goods manufactured $ 232,000

Not that Manufacturing overhead are included to the amount Applied in the Manufacturing Cost

You have a portfolio which is composed by a risky asset with an expected rate of return of 15% and a standard deviation of 20% and a risk free asset with a rate of return of 10%. What portion of your portfolio should be invested in the risky asset if you want your portfolio to have a standard deviation of 8%?

Answers

Answer:

Weight of risky asset = 0.4 or 40%

Explanation:

The standard deviation(SD) of a portfolio with one risky asset and one risk free asset can be calculated by multiplying the weightage of investment in the risky asset by the standard deviation of the risky asset as the risk free asset's standard deviation is zero. The formula to calculate the standard deviation of such a portfolio is,

Portfolio SD = weight of risky asset * Standard deviation of risky asset

Plugging in the values for portfolio SD and standard deviation of risky asset, we can calculate the weight of risky asset in the portfolio to be,

0.08 = weight of risky asset * 0.2

0.08 / 0.2 = weight of risky asset

Weight of risky asset = 0.4 or 40%

On July 23 of the current year, Dakota Mining Co. pays $6,165,600 for land estimated to contain 8,808,000 tons of recoverable ore. It installs machinery costing $1,849,680 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 488,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.Required:
Prepare entries to record the following:_______.
(a)To record the purchase of the land.
(b)To record the cost and installation of machinery.
(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.
(d)To record the first five months' depreciation on the machinery.

Answers

Answer:

a) July 23, 202x, purchase of land parcel (for mining purposes)

Dr Land and ore deposits 6,165,600

Cr Cash 6,165,600

b) July 25, 202x, purchase and installation of mining machinery

Dr Machinery 1,849,680

Cr Cash 1,849,680

c) December 31, 202x, depleting expense of ore deposits

Dr Depleting expense 341,917

Cr Accumulated depletion: land and ore deposits 341,917

depleting expense = ($6,165,600 / 8,808,000 tons) x 488,500 tons = $341,917

d) December 31, 202x, depreciation expense of machinery

Dr Depreciation expense 102,585

Cr Accumulated depreciation: machinery 102,585

depreciation expense = ($1,849,680 / 8,808,000 tons) x 488,500 tons = $102,585

Gilberto Company currently manufactures 65,000 units per year of one of its crucial parts. Variable costs are $1.95 per unit, fixed costs related to making this part are $75,000 per year, and allocated fixed costs are $62,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.25 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 65,000 and buying 65,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier?

Answers

Answer:

Incremental cost of buying the component = $69,500

Therefore the component shall be make in the company and shall not be bought from outside.

Explanation:

Provided the cost in case of manufacturing

65,000 units

Variable Cost = $1.95 $*$ 65,000 = $126,750

Fixed Cost = $75,000

Total cost of making the product = $126,750 + $75,000 = $201,750

Total cost in case of buying the product

Price to be paid = $3.25 $*$ 65,000 = $211,250

Also the fixed cost of $60,000 will be incurred in any manner and is not avoidable.

In that case total cost of buying the product = $211,250 + $60,000 = $271,250

Incremental cost of buying the component = $271,250 - $201,750 = $69,500

Therefore the component shall be make in the company and shall not be bought from outside.

Final answer:

If Gilberto Company purchases the part externally, it will incur an extra cost of $12,750. Therefore, it is more cost-effective for the company to continue manufacturing the part in-house.

Explanation:

The first step is to calculate the total cost of producing 65,000 units in-house and the total cost of buying 65,000 units externally.

For in-house production: The cost is the sum of variable costs, fixed costs, and allocated costs, yielding: (65,000 units * $1.95/unit) + $75,000 + $62,000 = $198,500

For external purchasing: the total cost is simply 65,000 units * $3.25/unit = $211,250.

We subtract the in-house cost from the external purchasing cost to obtain the incremental cost: $211,250 - $198,500 = $12,750. Therefore, it costs an incremental $12,750 to buy 65,000 units externally compared to making them in-house. Considering the cost-effectiveness, Gilberto Company should continue to manufacture the parts in-house rather than buying them from the external supplier.