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.
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In the given question GP ratio will be 53.4%
Here Net sales= 296000 $
Cost of goods sold= 138000 $
average inventory= 50000 $
Gross profit= Net sales- Cost of goods sold
=296000-138000
=158000
Formula for calculating Gross profit ratio is:
Gross profit/ Net sales *100
= 158000/296000*100
=53.4%
Gross profit ratio is a financial ratio which measures the performance and efficiency of a business by dividing its gross profit by the total net sales. The gross profit ratio can also be expressed in the form of percentage by multiplying the result by 100.
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Answer:
The Adjustment Entry for accrual of Interest Expense will be as follows:
Dr. Cr.
Interest Expense $840
Interest accrued Payable $840
Explanation:
Interest per day = $28
Interest expense for the Month = $28 x 30 = $840
$840 of Interest expense will be accrued at the end of the month and it should be adjusted accordingly.
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Based on the information given, Martha is incorrect. Sam's quantity demand has decreased.
<h3>
What is demand?</h3>
Demand means the quantity of a good and services that consumers are willing and able to buy at various prices during a given period of time
In this case, Martha is incorrect. This is because Sam's quantity demanded has decreased, and his demand has not changed.
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