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ElenaW [278]
3 years ago
5

Ken purchases a box of cereal for $2.89, cheese for $5.04, lettuce for $1.93, and milk for $1.99. he has $15 with him. which est

imate is most reasonable?
Business
1 answer:
nirvana33 [79]3 years ago
3 0
It's an estimate of $13
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Define the term fiscal policy.
12345 [234]

Answer:

a). Fiscal policy: fiscal policy ca be defined as the act by the government to use it's expenditure and taxation to control the economy. Government spending usually includes the purchase of goods while taxation is usually a compulsory charge by a government to finance their spending. As we can see, how much the government spends depends on the level of taxation. Fiscal policy are therefor rules and guidelines that utilize spending and taxation to manage the economy.

b). Two ways in which fiscal policy can be used by Caribbean government to increase the level of employment and output in their economies are:

1. Reduction of taxes

2. Increasing government spending

c).  The reasons why some fiscal measures may not work in the small open economies in the Caribbean are:

1. Fiscal expansion by increasing government spending leads to the crowding out effect by the private sector.

2. Fiscal expansion can lead to increased levels of disposable income, increasing the demand for goods and services. This causes an increase in price leading to inflation.

3. Fiscal contractionary policies, which are rarely used include reducing government spending and increasing taxes. This reduces the supply of money in the economy, thus causing a budget surplus. This if not controlled, causes deflation that reduces the levels of output and employment.

d). The crowding out effect is caused by increased government spending in the public sector to the point that the private sector is driven down or in some instances are totally done away with.Crowding out effect can be avoided by offering investment subsidies. Thus the private sector can grow since the cost of investment is manageable.

Explanation:

a). Fiscal policy: fiscal policy ca be defined as the act by the government to use it's expenditure and taxation to control the economy. Government spending usually includes the purchase of goods while taxation is usually a compulsory charge by a government to finance their spending. As we can see, how much the government spends depends on the level of taxation. Fiscal policy are therefor rules and guidelines that utilize spending and taxation to manage the economy.

b). Most Caribbean countries on average are middle-income economies. Their economy largely relies on tourism, agriculture, oil and natural gas produce. With the upper middle-income Caribbean countries relying heavily on oil and natural gas export.  Most of the Caribbean countries are developing countries with economic characteristics like; high levels of unemployment and low levels of output. There are two ways in which fiscal policy can be used by Caribbean government to increase the level of employment and output in their economies. They are;

1. Reduction of business taxes. A reduction in business tax encourages investment in the economy. More investment in the company means more employment opportunities in the economy. Since tax cuts, increases disposable income by a considerable amount, this means that more income is available for production of goods and services. This causes an increase in output.

2. Increasing government spending: this can be done by offering grants to local and state governments to encourage spending on finished goods and services. By doing this, more businesses produce more since the demand is high. An increased demand requires high levels of output to satisfy the demand. Simultaneously, a larger work force is needed to meet the high levels of output required thus raises the level of employment.

c). A small open economy is an economy that takes part in international trade but due to the fact that it is small, their influence causes little or no considerable effect the international prices, rates of interest or even world income. Some of the reasons why fiscal measures cannot work in a small open economy in the Caribbean are;

1. Fiscal expansion by increasing government spending leads to the crowding out effect by the private sector.

2. Fiscal expansion can lead to increased levels of disposable income, increasing the demand for goods and services. This causes an increase in price leading to inflation.

3. Fiscal contractionary policies, which are rarely used include reducing government spending and increasing taxes. This reduces the supply of money in the economy, thus causing a budget surplus. This if not controlled, causes deflation that reduces the levels of output and employment.

d). The crowding out effect is caused by increased government spending in the public sector to the point that the private sector is driven down or in some instances are totally done away with.Crowding out effect can be avoided by offering investment subsidies. Thus the private sector can grow since the cost of investment is manageable.

3 0
3 years ago
reonna Corporation leases equipment from Falls Company on January 1, 2020. The lease agreement does not transfer ownership, cont
ioda

Answer:

$35,000

Explanation:

Since this is an operating lease (short lease term, no transfer of ownership, and low present value of lease payments), the lessor has to record a depreciation expense, but the lessee only considers lease payments as operating costs (no depreciation expense or lease liability should be recognized).

Depreciation expense per year under the straight line method = asset cost / useful life = $280,000 / 8 years = $35,000

4 0
3 years ago
Presented below is information related to Concord Corporation: Common Stock, $1 par $3410000 Paid-in Capital in Excess of Par―Co
Pavlova-9 [17]

Answer:

$7,738,000

Explanation:

The computation of total stockholders' equity is shown below:-

= $3,410,000 + $560,000 + $2,090,000 + $388,000 + $1,440,000 - $150,000

= $7,888,000 - $150,000

= $7,738,000

Therefore for computing the total stockholders' equity we simply add all values except treasury stock and deduct the treasury stock.

5 0
3 years ago
Suppose that an increase in production costs decreases the supply of wheat, such that less wheat is supplied at each price level
Elan Coil [88]
<h2>Answer</h2>

Increases

<h3>Explanation</h3>

When an increase in the production cost is experienced, there are high chances that the supply will be affected significantly. With increased costs, in this scenario, less wheat is supplied, rending the wheat supply curve to shift inwards. An inward shift of the wheat supply curve will result in decreased supply and since less supply has to met more demand, so price will rise, thus an increased equilibrium price is attained.

4 0
3 years ago
What are the 3 advantages to a diversified portfolio?
Gala2k [10]

Answer:

1. Minimizing Risk,  2. Generate profits 3. Preservation of Capital:

Explanation:

<u>1. Minimizing Risk</u>

Every investment opportunity has its share of risk. Having a diversified portfolio shield from unforeseen market events.  If one class of investments perform poorly, other groups may do well, thereby reducing the loss impact.

<u>2. Generate Profits  </u>

Diversification means investors will be relying on several investment tools for returns. Some markets may not respond as the investor expects. Should some markets not do well, an investor will be assured of profits from the rest.

<u>3. Preservation of Capital</u>

The main aim of investing is to make profits, preserving capital is as equally important.  Every investor must be careful not to lose all his capital. Having a diversified portfolio helps protect wealth.

3 0
3 years ago
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