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2 years ago

Which of the following is a reason the government can’t completely control the business cycle

Business

1 answer:

saveliy_v [14]2 years ago

6 0

The basic reason is the government can’t control interest rates is the business cycle. Changes in interest rates should be reflected in the business cycle.

What is business cycle?

The term "business cycle" is used by economists to describe the increase and decrease in economic activity over time.

The interest rate cycle is closely related to the business, trade, and economic cycles. Theoretically, changes in interest rates should be reflected in the economic cycle. But the government can’t completely control interest rates.

Governments attempt to control business cycles through spending, tax increases or decreases, and interest rate changes. In order to stifle inflation and slow down the economy, the government will raise interest rates.

As a result, option (b) the government can't control interest rates is correct.

Learn more about on business cycle, here:

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Two investment advisers are comparing performance. One averaged a 19% return and the other a 16% return. However, the beta of th

pentagon [3]

Answer (A):

Need more data to select the better adviser

Explanation: 

Adviser A averaged 19% return on the investment which is more than that of Adviser B who averaged 16% return on investment. However, adviser A has a beta of 1.5 which is also greater than that of Adviser B who has a beta of 1. This means that adviser A made a more riskier investment and hence a higher average return on investment. We need more data to tell which adviser performed better in relation to each other.

Answer (B):

Investment Adviser B

Explanation:

$R_{f}$ = T-bill rate = 6%

$R_{m}$ = Market return = 14%

$R_{m} - R_{f}$ = Market risk premium = 14% - 6% = 8%

$ER_{a}$ = Average Return by Adviser A =19%

$\beta _{a}$ = Beta of Adviser A = 1.5

$ER_{b}$ = Average Return by Adviser B =16%

$\beta _{b}$ = Beta of Adviser B = 1

CAPM Equation is $ER_{i} = R_{f} +\beta (R_{m} - R_{f} ) +\alpha$

For Adviser A

$ER_{i}$ = 6 + 1.5 (14 - 6) = 18%

The expected average return for the investment is 18% which means that Adviser A over performed the market by 1 %

For Adviser B

$ER_{i}$ = 6 + 1 (14 - 6) = 14%

The expected average return for the investment is 14% which means that the Adviser B over performed the market by 2 %

Clearly, Adviser B performed better than Adviser A.

Answer (C):

Adviser B

Explanation:

In this part, the $R_{f} = 3 %$ and $R_{m} = 15%$

All else remains the same

We make similar calculation as in part B

4 0

3 years ago

Sara purchased a life insurance policy as an investment from her neighbor, Angela. Angela, the original policy holder had paid p

Pavlova-9 [17]

Answer:

$16,500

Explanation:

She invested = $12,000

Total money spent to acquire the policy = ($16,500 + $5000) = $21,500

Total money invested on policy = $21500 + $12000

Total money invested on policy = $33500

Money that sara got after angela died = $50,000

Therefore, the taxable proceed will be = $50,000 - $33,500 = $16,500

6 0

3 years ago

Entries for Investment in Bonds, Interest, and Sale of Bonds Gonzalez Company acquired $200,000 of Walker Co., 6% bonds on May 1

drek231 [11]

Answer:

A. Dr Investment in Bonds 200,000

Cr Cash 200,000

B. Dr Cash 6,000

Cr Interest revenue 6,000

C. Dr Cash 67,900

Dr Loss on sale of bonds 2,100

D. Dr Interest receivable 1,300

Cr Interest revenue 1,300

Explanation:

A. Preparation of the Journal entry to record The initial acquisition of the bonds on May 1

Dr Investment in Bonds 200,000

Cr Cash 200,000

B. Preparation of the journal entry to Record The semiannual interest received on November 1 Nov

Dr Cash 6,000

[ 200,000 (100%-97%)

Cr Interest revenue 6,000

C. Preparation of the journal entry to Record The sale of the bonds on November 1.

Dr Cash 67,900

( 70,000 * 97%)

Dr Loss on sale of bonds 2,100

(70,000-67,900)

Cr Investment in Bonds 70,000

D. Preparation of the journal entry to Record

The accrual of $1,300 interest on December 31. Dec. 31

Dr Interest receivable 1,300

Cr Interest revenue 1,300

6 0

2 years ago

Compute 2018 taxable income in each of the following independent situations.

KATRIN_1 [288]

Answer:

a. Drew and Meg are married and filing a married joint return. The standard deduction of a married joint return is $24,400 but it is lower

AGI $125,000

Less: Itemized deduction $27,000

Taxable income $98,000

b. Sybil's filing status is head of household. The Standard deduction for head of household is $18,000 in 2018 which is higher than itemized deductions of $8,000.

AGI $80,000

Less: Itemized deduction $18,000

Taxable income $62,000

c. Scott is a surviving spouse. The standard deduction will be equal to that of married filling joint return which is $24,400

AGI $75,000

Less: Itemized deduction $24,400

Taxable income $50,600

d. Amelia is an abandoned spouse. She can file as head of household. The standard deduction for the year 2018 is $18,000 which is higher than itemized deductions of $10,650.

AGI $58,000

Less: Itemized deduction $18,000

Taxable income $40,000

e. Dale is divorced and filing status is head of household. The standard deduction for the year 2018 is $18,000 which is higher than itemized deductions of $9,900

AGI $64,000

Less: Itemized deduction $18,000

Taxable income $46,000

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2 years ago

What does controlling involve?

miskamm [114]

Biological control is a bioeffector-method of controlling pests such as insects, mites, weeds and plant diseases, using other living organisms.
Biological pest control relies on natural mechanisms including predation, parasitism, or herbivory, but typically also involves an active human management role.

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2 years ago

Which of the following is a reason the government can’t completely control the business cycle￼

Which of the following is a reason the government can’t completely control the business cycle