Answer:
b. 23.8%
Explanation:
For computing the percentage difference, we have to compute the Pre-tax income of both corporations and the partnership
For corporations:
Pre-tax income = (1 - corporate tax rate) × (1 - personal tax rate)
= (1 - 0.34) × (1 - 0.30)
= 0.66 × 0.70
= 0.462 or 46.2%
For partnership:
Pre-tax income = (1 - personal tax rate)
= (1 - 0.30)
= 0.70 or 70%
So, the difference would be
= 70% - 46.2%
= 23.8%
Answer:
affect nominal but not real variables. This view that money is ultimately neutral is consistent with classical theory.
Explanation:
This idea is held by classical economists (not by most economists) since they believe in the quantitative theory of money:
MV = PQ
- M = quantity of money
- V = velocity of money
- P = price level
- Q = quantity of goods
Classical theory was abandoned 90 years ago (according to classical theory, recessions were not possible and couldn't exist, but then the Great Depression came and the impossible became true). Neo-classical or monetarists appeared in the 1960s, and lately, neo-neo-classical appeared with George W. Bush. The problem with the quantitative theory is that it needs the following things to be true in order to hold, and empirical evidence over the last 90 years showed that none of them are true:
- the velocity of money has to be constant (AND IT IS NOT CONSTANT)
- real output is independent on money supply (NOT TRUE)
- causation goes from money to prices (MODERN ECONOMISTS BELIEVE IT IS THE OTHER WAY)
To get the formula for the principal, we will use the
formula for the interest and derived it from there:
I = Prt is the equation then it will be P = I /rt since we
are looking for the principal.
P = I /rt
= $500 / (0.145 x 240/360)
= $500 / 0.0967
= $5170.63
To check:
I = Prt
= $5170.3 x 0.145 x 240/360
= $499.8 or $500
Answer:
b. all development cost are expensed as incurred
Answer:
Private Savings + (Imports – Exports) = Investment + (Government Spending – Tax)
Explanation:
This relationship expressed in the equation above is a macro economy equation which is correct and implies that the quantity supplied of financial capital is equal to the quantity demanded of financial capital.
Supply of financial capital is represented by "Private Savings + (Imports – Exports)", while the demand for financial capital is represented by "Investment + (Government Spending – Tax)".
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