This example shows that <u>economic boom periods can overheat and lead to speculative bubbles.</u>
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<h3><u>A Speculative Bubble: What Is It?</u></h3>
A speculative bubble is characterized by a rapid, dramatic price increase that is driven more by market momentum and mood than by underlying fundamentals.
Fundamentals like significant profit growth or hopes of future market dominance at first fuel the speculation, but these fundamentals are eventually overtaken by other factors that don't reflect the real value of the company or industry.
Prices rise when investors rush to buy, thinking that prices will rise further and that if they don't buy, an opportunity will pass them by.
Fundamentals eventually overtake momentum, the bubble bursts, the stock tanks, and prices fall back to their pre-bubble levels.
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Answer:
A budget deficit
Explanation:
A budget deficit arises when the governments spend more than it has collected. The government 's main source of revenue is taxes and levies it imposes on businesses and individuals. Its expenses include salaries for public employees, social welfare, and expenditures on public goods and infrastructure development projects.
A budget deficit contrasts a budget surplus, which occurs when a government intends to spend less than it has collected. Budget deficits result in government borrowing from either the domestic or foreign markets. A balanced budget is when the collected revenues match the planned expenditures.
In a commercial bank's t-account, reserves and outstanding loans are recorded as assets.
In economic accounting, "reserve" usually has a credit balance and may talk over with part of shareholders' fairness, a liability for envisioned claims, or contra-asset for uncollectible debts. A reserve can seem in any part of shareholders' fairness besides for contributed or simple proportion capital.
Reserves are a part of income or gain that has been allotted for a selected reason. Reserves are usually installed to shop for fixed property, pay bonuses, pay an anticipated prison settlement, pay for upkeep & protection and pay off debt.
Reserves – additionally called retained income – are portions of a commercial enterprise's profits that have been set aside to strengthen the enterprise's economic function.
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Answer:
The correct answer is D: $13
Explanation:
Giving the following information:
Cost per Unit Cost per Period:
Direct materials $ 6.20
Direct labor $ 2.80
Variable manufacturing overhead $ 1.45
Fixed manufacturing overhead $ 12,000
Sales commissions $ 1.00
Variable administrative expense $ 0.55
Fixed selling and administrative expense $ 4,000
Price= 25
Contribution margin= Price - variable costs
Variable costs= direct materials + direct labor + variable manufacturing overhead + sales commissions + variable administrative expense
Variavle costs= 6.20 + 2.80 + 1.45 + 1 + 0.55= $12
Contribution margin per unit= 25 - 12= $13
I think it’s the continual system
