Answer: District court
Explanation:
In this scenario, since the neighbor have to be sued in a Texas court so as to be compensated for the loss that was incurred, the district court can handle this.
It should be noted that most district courts are usually courts that handle small cases such as this like domestic related cases or probably cases involving little crimes.
In this case, the district court can handle the lawsuit because the neighbor must be sued in a Texas court to be reimbursed for the loss. It should be noted that most district courts handle tiny cases like these, such as domestic violence situations or likely instances involving minor offenses.
So, the District Court is the correct court I can sue my neighbor in.
About District Court in Texas:
Texas district courts are the state's general jurisdiction trial courts. The Legislature determines the geographical region served by each court, but each county must have at least one district court. Several counties may be served by a single district court in sparsely populated portions of the state, whereas an urban country may be served by multiple district courts. In felony criminal cases, divorce cases, cases involving title to land, election contest cases, and civil issues involving a sum of money or damages of $200 or more, district courts have initial jurisdiction.
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In general, which forecasting time frame best identifies seasonal effects ?
a. Short-term forecasts
b. Quick-time forecasts
c. Long range forecasts
d. Medium term forecasts
e. Rapid change forecasts
To have the potential to become sources of competitive advantage, resources and capabilities must be non-substitutable, valuable, __________, and __________. a. unique; easy to imitate b. easy to implement; unique c. easy to imitate; difficult to implement
Answer: rare; costly to imitate
Explanation:
To have the potential to become sources of competitive advantage, resources and capabilities must be non-substitutable, valuable, rare and costly to imitate.
Competitive advantage simply has to do with the factors or the resources that are available to a particular company that allows the company to produce products that are cheaper and.bettee than its counterparts. This helps the company make more sale and more revenue.
The resources must not be one that can be easily copied by others. It must also be valuable and rare.
Answer: A. Unique; Easy to imitate
Explanation: To have the potential to become sources of competitive advantage, resources and capabilities must be non-substitutable, valuable, unique, and easy to imitate.
Fill in the blanks to complete the following sentence about labor force and unemployment, assuming country X has the following statistics:total population 16 years old or older = 50,000,000 full-time students = 4,200,000 not employed and not currently searching for jobs = 6,000,000 not employed but currently searching for jobs=2,336,000 currently employed = 29,664,000 Drag words below to fill in the blank(s) in the passage. Country X has a labor force of______, a labor force participation rate of_____, and an unemployment rate of_____.
Answer:
Country X has a labor force of 32,000,000, a labor force participation rate of 64%, and an unemployment rate of 7.3%.
Labor force:
= Unemployed people + Employed
Unemployed people here are those looking for jobs.
= 2,336,000 + 29,64,000
= 32,000,000 people
Labor force participation rate:
= Labor Force / Population of working age
= 32,000,000/50,000,000
= 64%
Unemployment rate:
= Unemployed / Labor force
= 2,336,000/ 32,000,000
= 7.3%
Country X has a labor force of 32 million, a labor force participation rate of 64 %, and an unemployment rate of 7.3%.
Labor Force:
They are those people in the country that can work.
Labor force = Unemployed people + Employed
Unemployed people are those looking for jobs.
Labour force = 2,336,000 + 29,64,000
Labor force = 32,000,000 people
Labor Force Participation Rate:
The percentage of labor force in working age in the country.
[tex]\bold {Labor\ force\ participation\ rate =\dfrac {Labor\ Force} {Population\ of\ working\ age}}\\\bold {=\dfrac { 32,000,000}{50,000,000}\times 100 = 64}[/tex]
= 64%
Unemployment rate:
It is the percentage of employed people to the population of the country.
[tex]\bold {Unemployment\ rate= \dfrac {Unemployed} { Labor\ force}}\\\\\bold = {\dfrac {2,336,000}{ 32,000,000}\times 100}\\\\= 7.3%[/tex]
= 7.3%
Therefore, The unemployment rate in the country is 7.3%.
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Which company is most exposed to the ups and downs of the aircraft engine industry? a) General Electric b) MTU Aero Engines c) United Tech Corp d) Rolls-Royce
Research the challenges associated with payments across international borders and prepare a brief summary of your findings. Do most e-commerce companies conduct business internationally
Answer:
The main challenge associated with payments across international borders is the challenge of currency rates. Because currencies vary across countries, sometimes a payment can be either hugely benefitial or hugely detrimental for a company, depending on how expensive or cheap its domestic currency is compared to the foreign currency.
Another challenge is related to international legislation, banking systems, red tape, and so on. Banking laws in some countries are more favorable to firms than in others, for example, by charging less financial expenses or comissions.
Greg has a traditional health insurance plan with a $500 deductible, 80/20 coinsurance, and a $2000 out of pocket max. His total health care bill is $8,760. How much will he end up paying?
Answer: $2,000
Explanation:
Greg will pay the $500 deductible first.
Amount left is;
= 8,760 - 500
= $8,260
This will be shared by the insurance company and by Greg 80/20.
= 8,260 * 20%
= $1,652
Add this to the first amount he paid;
= 1,652 + 500
= $2,152
This is above Greg's out of pocket limit of $2,000 so Greg will pay his limit of $2,000.
1.5 marks
Q.No:5
The gap between two annual general meeting
cannot exceed
A) 6 months
6
B) 12 months
C) 15 months
D) 18 months
Answer:
C) 15 months
Explanation:
As per the law, a company with two or more shareholders must hold an Annual AGM every year. The AGM for a new company must be held within the first nines months after the financial year.
The AGM for an existing company must be held not later than six months after the end of a financial year. However, the law has set 15 months as the maximum gap of time allowed between two general meetings.
A manager is asked to initiate activities that will support environmental scanning. Which activity should be used by this manager for this purpose?
A. Reviewing production
B. Monitoring competitors
C. Setting the advertising budget
D. Implementing a new program
Answer:
B)monitoring competitors
Explanation:
Competitors monitoring can be regarded as SWOT analysis of the organization competitors, it helps in the awareness of moves that can be taken by the firm compititors such as as the marketing strategies, stock as well as as pricing policy. It should be noted that for a manager to initiate activities that will support environmental scanning. Monitoring competitors activity should be used by this manager for this purpose.
On January 2, 2005 Garr Company acquired machinery at a cost of $320,000. This machinery was being depreciated by the double-declining-balance method over an estimated useful life of eight years, with no residual value. At the beginning of 2007 it was decided to change to the straight-line method of depreciation. Ignoring income tax considerations, the retrospective effect of this accounting change is:__________.
Answer:
The depreciation charge will be lower in 2007 using straight line method compared to the one produced by double-declining-balance method
Explanation:
Double-declining-balance method
Depreciation Expense = 2 × SLDP × BVSLDP
Therefore,
SLDP = 100 ÷ number of useful life
= 100 ÷ 8
= 12.5 %
Calculation of Depreciation Expenses (DE)
2005
DE = 2 × 12.5 % × $320,000
= $80,000
2006
DE = 2 × 12.5 % × ($320,000 - $80,000)
= $60,000
2007
DE = 2 × 12.5% × ($320,000 - $80,000 - $60,000)
= $45,000
Using Straight line Method for 2007 Depreciation Expense
Accumulated Depreciation (2005 to 2006) = $80,000 + $60,000
= $ 140,000
Depreciable Amount = Cost - Accumulated Depreciation
= $320,000 - $140,000
= $180,000
DE = (Cost - Residual Value) ÷ Remaining Useful Life
= $180,000 ÷ 6
= $30,000
Conclusion :
Comparing 2007 Depreciation Expense using double-declining-balance method against straight-line method of depreciation we can see that straight-line method of depreciation produces lower results.
Problems and Applications Indicate how each of the following transactions affects US exports, imports, and net exports. Effect On... Transaction US exports U.S. Imports U.S. Net Export A French historian spends a semester touring museums and historic battlefields in the United States. Students in Paris flock to see the latest movie from Hollywood. Your auntie purchases a Panasonic camera. Your aunt buys a novel by a British author from a local bookstore. Your parents buy a bottle of French wine from a local wine store.
Answer:
Transactions Exports Imports Net Export
A French historian spends a Increase Unchanged Increase
semester touring museums
and historic battlefields in
the United States.
Students in Paris flock to see the Increase Unchanged Increase
latest movie from Hollywood.
Your auntie purchases a Unchanged Increase Decrease
Panasonic camera.
Your aunt buys a novel by a British Unchanged Increase Decrease
author from a local bookstore.
Your parents buy a bottle of French Unchanged Increase Decrease
wine from a local wine store.
Note:
The export means selling of domestic goods and services into foreign nations
The import means domestic purchases of goods and services from foreign nation
Net export means the difference between the total export and total import of a nation.
The effects of the following on Imports, Exports, and U.S. Exports:
A French historian spends a semester touring museums and historic battlefields in the United States.
Exports ⇒ IncreaseImports ⇒ Unchanged Net Exports ⇒ IncreaseExports increased because a foreigner was spending time and money on American made products. Net exports always increase when exports increase over imports.
__________________________________________________________
Students in Paris flock to see the latest movie from Hollywood.
Exports ⇒ IncreaseImports ⇒ Unchanged Net Exports ⇒ IncreaseExports increased because the movie was made by the United States.
__________________________________________________________
Your auntie purchases a Panasonic camera.
Exports ⇒ UnchangedImports ⇒ IncreaseNet Exports ⇒ DecreaseImports increased here because your auntie is American and bought things from a foreign country ( Japan). Net exports decrease when imports are more than exports.
__________________________________________________________
Your aunt buys a novel by a British author from a local bookstore.
Exports ⇒ UnchangedImports ⇒ IncreaseNet Exports ⇒ DecreaseImports increase because the product is made by foreigners (British).
__________________________________________________________
Your parents buy a bottle of French wine from a local wine store.
Exports ⇒ Unchanged Imports ⇒ IncreaseNet Exports ⇒ DecreaseImports increase because the wine is made by foreigners (French).
__________________________________________________________
In conclusion, imports decrease net exports and exports increase net exports.
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Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. Assume Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel.How many new shares Rearden needs to issue to pay for this deal?What is the exchange ratio?What will be the price per share of the combined corporation after the merger?What will be the price per share of the Rearden immediately after the announcement?What will be the price per share of the Associated Steel immediately after the announcement?
Answer and Explanation:
The computation is shown below
Current price = $15
Premium = $15 × 20% = $3
Offer price = $15 + $3 = $18
The value of associated steel = $18 × 4 million shares = $72
a. The number of new shares would be
= $72 ÷ $20
= 3.6
b. The exchange ratio is
= $18 ÷ $20
= 0.9
c. Price per share after the merger is
= ((20 × 10) + (15 × 4)) ÷ (10 + 3.6)
= $19.12
d. Price per share after the annoucement is $19.12
e. Price of associated steel is
= 19.12 × 0.90
= $17.21
A forklift is purchased for $17,000. The truck is expected to be of use to the company for 6 years, after which it will be sold for $3,500. Calculate the depreciation charge and book value for each when a double declining balance (DDB) method is used.
Answer:
The depreciation charges and book value for each year are as follows:
Year Depreciation charges ($) End year book value ($)
1 5,668 11,332
2 3,778 7,554
3 2,519 5,036
4 1,679 3,357
5 1,119 2,238
6 (1,262) 3,500
Explanation:
Note: See the attached excel file for the calculation of depreciation charge and book value for each of the 6 years assuming double-declining balance (DDB) method.
A double-declining-balance refers to a depreciation method that depreciates an asset twice the rate of the straight line depreciation method.
In the attached excel file, the depreciation rate used is calculated as follows:
Straight line depreciation rate = 1 / Number of years of operating
activities = 1 / 6 = 0.1667, or 16.67%
Double-declining depreciation rate = Straight line depreciation rate * 2
= 16.67% * 2 = 33.34%
The 33.34% double-declining depreciation rate is therefore used in the attached excel file table.
Note:
The depreciation charge is negative, i.e. -$1,262, the residual value of $3,500 which is greater than the beginning book value in Year 6 of $2,238 has to be considered. Therefore, the Year 6 depreciation expenses is calculated as follows:
Year 6 depreciation expenses = Beginning book value in Year 6 - Residual value = $2,238 - $3,500 = -$1,262
Suppose you have the following information on Sam's budget. Sam has a yearly budget of $2000 to spend on consuming concert tickets or books.
The price of one ticket is $25.
The price of one book is $10.
Use this information to complete the table below. For Bundle A assume Sam spends all his income on concert tickets. For Bundle B assume Sam spends 75% of this income on tickets and the remaining 25% on books. For Bundle C assume Sam spends 25% of this income on tickets and the remaining 75% on books. For Bundle D assume Sam spends 100% of his income on books.
Bundles A B C D
Concert Tickets
Books
Answer:
Bundles A B C D
Concert Tickets 80 60 20 0
Books 0 50 150 200
Explanation:
Since each concert ticket costs $25,
if Sam spends $2,000 on concert tickets, he will purchase 80 ticketsif he spends $1,500 on concert tickets, he will purchase 60 ticketsif he spends $500 on concert tickets, he will purchase 20 ticketsSince each concert ticket costs $10,
if Sam spends $2,000 on books, he will purchase 200 booksif he spends $1,500 on books, he will purchase 150 booksif he spends $500 on books, he will purchase 50 booksA thorough evaluation of how well a project's actual performance matches the projections made when the project was proposed is called a
Answer:
post-audit
Explanation:
Post audit process can be regarded as
the analysis of result of capital budgeting investment. When this result of the audit are use in making budgeting decisions in future capital, and this side decision making process.
It should be noted that thorough evaluation of how well a project's actual performance matches the projections made when the project was proposed is called a post-audit.
While preparing its year 3 financial statements, Dek Corp. discovered computational errors in its year 2 and year 1 depreciation expense. These errors resulted in overstatement of each year’s income by $25,000, net of income taxes. The following amounts were reported in the previously issued financial statements:
Year 2 Year 1
Retained earnings, 1/1 $700,000 $500,000
Net income 150,000 200,000
Retained earnings, 12/31 $850,000 $700,000
Dek’s year 3 income is correctly reported at $180,000. Which of the following amounts should be adjusted to retained earnings and presented for net income in Dek’s year 3 and year 2 comparative financial statements?
Year Retained earnings Net income
year 2 -- 150,000
year 3 ($50,000) 180,000
year 2 ($50,000) $150,000
year 3 -- 180,000
year 2 ($50,000) $125,000
year 3 -- 180,000
year 2 -- $125,000
year 3 -- 180,000
Answer:
Dek Corp.
The amounts should be adjusted to retained earnings and presented for net income in Dek’s year 3 and year 2 comparative financial statements are:
Year Retained earnings Net income
year 2 ($50,000) $150,000
year 3 -- 180,000
Explanation:
a) Data and Calculations:
Years 1 and 2 net income overstated by $25,000 each.
Year 2 Year 1
Retained earnings, 1/1 $700,000 $500,000
Net income 150,000 200,000
Retained earnings, 12/31 $850,000 $700,000
b) With the above amounts, the retained earnings of Year 2 are adjusted by a negative $50,000 value, representing the overstated net income for years 1 and 2. This will reduce Year 2's ending retained earnings to $800,000 ($850,000 - $50,000). The second amount will simply state the net income for year 3 as it is.
Briefly describe the differences among international bond, bank and equity markets. Would you support an MNC that favors financing through bonds issues or would you rather support one
Answer:
Answer to this question is explained below in detail.
Explanation:
This question is not complete. This has two parts a) and b). Part a) is complete and b) is incomplete. I have written down the complete question and will try to answer completely.
a) Briefly describe the differences among international bond, bank and equity markets.
b) Would you support an MNC that favors financing through bonds issues or would you rather support one that favors financing through stock issues?
Solution:
a) We are asked to differentiate between international bond, bank and equity markets.
All three terms are related to raising funds, lending or borrowing to raise the capital for some government or for any company.
Let's start with International Bonds first.
International Bonds : In this globalized world, a company can raise its capital through getting debt in the form of international bonds from international institutions over the assets value of the company. For example: XYZ company has a asset value of 10 million dollars, so it can get international bonds accordingly.
International Equity markets: Again due to interlinked world, companies and institutions all over the world can invest their funds in any company around the globe. And through equity markets companies can sell their shares to raise its capital depending upon the asset value of the company.
International Banks: International banks are international institutions which raise capital in particular country and have branches all over the world. It can lend funds to companies on particular interest rates. Furthermore, all those bonds are generated in these banks as well.
b) Supporting an MNC that favors financing through bonds issues or through equity markets or stock issues will depend on the debt/equity ratio of the company. If it is low, company should go for debt or bond issues. If it is high then it should opt for stock issues.
The variable overhead spending variance, the fixed overhead spending variance, and the variable overhead efficiency variance can be combined to find the:__________
Answer:
Controllable variance
Explanation:
The controllable variance is the combination of the variable overhead, fixed overhead spending variance and together with this, the variable overhead efficiency variance is also involved
Hence, as per the given situation, the controllable variance is to be considered
Therefore the above represents the answer
Assume that a company announces unexpectedly high earnings in a particular quarter. In an efficient market one might expect _____________.
a. an abnormal price change immediately after the announcement
b. an abnormal price increase immediately before the announcement
c. an abnormal price decrease immediately after the announcement
d. no abnormal price change immediately before or after the announcement
Answer: a. an abnormal price change immediately after the announcement
Explanation:
In an efficient market, information is disseminated to participants at the same time which means that there isn't a chance for arbitrage. In such a market therefore, the prices of shares will reflect the information in the market.
In the above scenario, if the company shares such news, the share price of the company will react by changing in an abnormal way in other to match this unexpected news.
During the current year, OutlyTech Corp. expected to sell 22,500 telephone switches. Fixed costs for the year were expected to be $12,142,500, the unit sales price was budgeted at $3,250, and unit variable costs were budgeted at $1,400. OutlyTech's margin of safety ratio (MOS %) is
Answer:
70.83%
Explanation:
The computation of the margin of safety percentage is as follows:
Margin of safety percenatge is
= Margin of safety ÷ Total sales unit
where,
margin of safety units
= Total sales units - break even sales unit
The break even sales unit
= Fixed cost ÷ contribution margin per unit
= $12,142,500 ÷ ($3,250 - $1,400)
= 6,564 units
Now the margin of safety unit is
= 22,500 units- 6,564 units
= 15,936 units
So, the margin of safety percentage is
= 15,936 units ÷ 22,500 units
= 70.83%
The margin of safety ratio is 70.82%.
What is the margin of safety ratio?The margin of safety calculates how much sales can fall before the breakeven point is reached.
The margin of safety ratio = (current sales level - breakeven sale) / current sales level
Breakeven sales = fixed cost / (price per unit variable cost)
$12,142,500 / (3250 - 1400) = 6,563.51
The margin of safety ratio = (22500 - 6,563.51) / 22,500 = 70.82%
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Using the following information, compute the cost of direct materials used. Raw materials inventory, January 1$ 25000 Raw materials inventory, December 3155000 Work in process, January 127000 Work in process, December 3118000 Finished goods, January 160000 Finished goods, December 3148000 Raw materials purchases2000000 Direct labor890000 Factory utilities225000 Indirect labor75000 Factory depreciation500000 Operating expenses630000
Answer:
The cost of direct materials used is $1,970,000.
Explanation:
The cost of direct materials used can be computed using the following equation:
Cost of direct materials used = Raw materials inventory, January 1 + Raw materials purchases - Raw materials inventory, December 31 ............ (1)
Where;
Raw materials inventory, January 1 = $25000
Raw materials inventory, December 31 = $55000
Raw materials purchases = $2000000
Substituting the values into equation (1), we have:
Cost of direct materials used = $25000 + $2000000 - $55000 = $1,970,000
Therefore, the cost of direct materials used is $1,970,000.
Expansionary fiscal policy that creates a budget deficit can lead to crowding out. This crowding out effect is exhibited by A. increased taxes and increased investment. B. increased government expenditures and decreased interest rates. C. increased government expenditures and decreased investment. D. decreased government expenditures and decreased investment.
Answer: C. increased government expenditures and decreased investment.
Explanation:
Crowding out refers to a scenario where the Government borrows so much from loanable fund sources that there is little left for the private sector to borrow which leads to higher interest rates that they would be unable to borrow at.
This is reflected by the government being able to spend the money they borrowed leading to increased government expenditure but investment spending will decrease because the private sector was unable to secure loans to do so.
When a company prepares financial statements using standard costing, which items are reported at standard cost
Answer: Inventories and cost of goods sold.
Explanation:
Standard costing is used in accounting and it simply has to do with the substitution of the cost that's expected for a product with an actual cost when preparing financial statements.
The difference that's then between the actual costs and expected costs are then recorded as variance. It should also be noted that when a company prepares financial statements using standard costing, the items that are reported at standard cost will be Inventories and the cost of goods sold.
Profit on sale of fixed assets is used to creat
Answer:
profit and loss account
Explanation:
The turnover ratio of total working capital shows the success of working capital management. It is in fact a ratio that expresses how many times on average, during one year, working capital was used to pay the total expenses of the company.
A combination of data from the balance sheet and income statement is obtained, more specifically, it is the ratio of total business spread and average working capital of the company
True or False: Japan generally runs a significant trade surplus because of low Japanese demand for foreign goods.
It is false that Japan runs significant trade surplus because of its low demand for foreign goods.
Among the various reasons, Japan is a high country saving rate relative to investment that cause a significant trade surplus.
A higher saving rate generally corresponds to trade surplus and Japan socio-political and economical conditions reveals that people have a high propensity to save.
Other factor like high life expectancy rate, tax incentives for income and frequent environmental hazards contributed to the high rate of saving in Japan.
With the high rate of savings relative to domestic investment, Japan invest more funds in other countries (net capital outflow increases) and this is matched with high net exports leading to a trade surplus.
Therefore, It is false that Japan runs significant trade surplus because of its low demand for foreign goods.
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Suppose a small open economy has a floating exchange rate and the government reduces spending. What will happen to real income in the short run?
Answer:
Less government spending will make the currency value of the small country to fall compared to other currencies, because less government spending means less printing of money, and a slower growth of the money means less inflation, and a cheaper currency.
This will make the exports of the small open economy attractive, leading to an increase in this component of aggregate demand. Such scenario will result in a rise of real income in the short run.
According to Keynes, the remedy for a recessionary gap was straightforward. The solution was to: A. increase aggregate supply. B. increase aggregate demand. C. control big business. D. decrease government involvement.
Answer:
B. increase aggregate demand
Explanation:
A recession is a period characterised by reduced demand for goods and services. There is excess supply and prices of products tend to fall.
As a result of a decline in economic activity and price of goods, unemployment increases.
According to Keynes since the cause of a recession is reduced demand, the solution are strategies targeted at increasing aggregate demand.
When this happens people spend more and businesses will be able to employ more people, resulting in increased economic growth
What do you think is the socio - economic impact of business to Consumers ?
Answer:
The answer is below
Explanation:
The socioeconomic impact of Business to Consumers can be vast, positive, and negative at the same time, it all depends on some variables including the marketing and advertisement strategies, history of the firm or industry sectors, etc.
Hence, the socio-economic impact of business on consumers are:
1. Products and services provided by businesses are utilized by the consumers
2. Good business practices encourage consumers to spend their income on the products and services provided.
3. Competition between businesses leads to manufacturers producing goods and services at cheaper rates possible to consumers
4. Business products and services influence the consumption rates and attitude of consumers such as dress sense, gadgets ownership, etc, among consumers.
The following graph shows the consumer price index (CPI) for a fictional country from 1980 to 1990. Consumer Price Index (CPI) 60 1980 1982 1984 1986 1988 1990 During which of these time periods was there a period of inflation?
A. 1986 to 1988
B. 1988 to 1990
C. 1982 to 1984
D. 1980 to 1982
The answer is C
Answer:
C. 1982 to 1984 is correct answer
The classical view of the economy holds that transitions to full employment are relatively quick.1. Under what condition(s) can an economy make a relatively quick and easy transition to full-employment level of output?2. The Keynesian view of the economy holds that transitions to full employment can be extremely slow. What condition(s) would keep an economy from moving back to full employment quickly and easily?
Answer:
1. Under what condition(s) can an economy make a relatively quick and easy transition to full-employment level of output?
Classical economics are great theoretically, but actual evidence from real life is always against them. The problem with wages and unemployment is that wages are sticky, no one likes a wage cut and employees will always fight against them. That results in drastic changes in the level of unemployment, since it is easier to fire employees than lower their salaries.
When a demand shock occurs, and the aggregate demand curve shifts to the right, the aggregate supply curve will also shift. At this point, suppliers will need to hire more employees and fast since they cannot keep up with the demand. The problem is that in real life, demand shocks are sudden only in theory, no one will wake up tomorrow having twice the money and willing to spend it all immediately.
Classical economics work on the long run, but the problem is that the long run is not a definite point in time. We might actually never live to see the long run occur.
2. What condition(s) would keep an economy from moving back to full employment quickly and easily?
Shifts in the aggregate demand curve never occur from one day to another, they are gradual and take time. In real life, unless you suddenly win the lottery, the amount of goods that you purchase is generally stable. It will increase or decrease over time but not abruptly. Since sudden demand shocks do not occur in real life, neither do sudden shifts in the employment level. That is why the government issues monthly unemployment data, and you analyze the trends over several months or even years.
The marginal propensity to consume (MPC) is:_______.A) 0.90.
B) 0.10.
C) 0.80.
D) 0.95.
E) 0.75.
Answer: E) 0.75
Explanation:
Marginal Propensity to Consume measures the amount that a person spends on consumption when their income increases.
It is calculated as;
= change in consumption/ change in income
Income went from $0 to $500 so change = $500
Consumption went from $300 to $675 so change is = $375
MPC = 375/500
= 0.75