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Tcecarenko [31]
3 years ago
6

Suppose the economy is at a position below its institutional production possibilities frontier. To improve this situation, Keyne

sian economists might propose that government __________ taxes, which will cause the aggregate demand curve to shift to the __________ and Real GDP will __________.
Business
1 answer:
Cloud [144]3 years ago
7 0

Answer:

Keynesian economists might propose that government <em>reduces </em>taxes, which will cause the aggregate demand curve to shift to the <em>right </em>and Real GDP will <em>increases</em>.

Explanation:

Keynesian economics is demand-sided.

If the economy is producing at full capacity, increased demand will only cause inflation as goods and services cannot be increased although people are willing to pay more (real GDP the same)

However, if the economy is below capacity, the problem is that there is not enough demand to drive production (additional goods and services produced will not be bought). Keynesians would advocate reducing taxes to stimulate demand.

When taxes are reduced, goods become cheaper. People are willing to buy more at similar prices (that producers charge), causing the aggregate demand curve to shift to the <em>right. </em>As economy is below capacity, suppliers are able to responded by supplying more goods and services (supplier curve shift to the right) and Real output (GDP) would increase.

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The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,450,000, and the December 31, 2016, balance sh
baherus [9]

Answer:

The firm's cash flow to creditors during 2016 was -$131,000.

Explanation:

Cash flow to creditors

= Interest expense - (Ending LT Debt - Beginning LT Debt)

= $99,000 - ($1,680,000 - $1,450,000)

= -$131,000

Therefore, The firm's cash flow to creditors during 2016 was -$131,000.

7 0
3 years ago
5
gtnhenbr [62]

Answer:

option c it will have negative consequences..

5 0
2 years ago
What is your reaction to Harriet's suggestion of using the cost of debt only?
Ahat [919]

Answer:

No, it is a bad idea to use only the cost of debt

Explanation:

Only using the cost of debt, is not a good idea because too much amount of borrowing could lose the confidence of the investors and it could lead to the uncertainty in the future cash flows.

Suppliers might be worried regarding the financial situation and lead to the supply disruption. Though, the debt might save the tax expenses, which could lead to the negative cash flow.

When the company does not have adequate amount of cash at hand, it could cause many disruptions of financial. WACC (Weighted Average Cost of Capital) rates need to be used as the capital costs as it weigh the used capital cost and the used debt.

8 0
3 years ago
A company sells 800 units at $16 each, has variable costs of $12 per unit, and fixed costs of $1,200. Income is $
Inessa05 [86]

Assuming a company sells 800 units at $16 each, has variable costs of $12 per unit. The after-tax income is $1,200.

<h3>After-tax income</h3>

Using this formula

After-tax income=(Selling units×Selling price)-[(Variable costs×Selling price)+Fixed costs]×(1- tax rate)

Let plug in the formula

After-tax income=(800 units× $16 each)-[(800 units × $12 each)+$1200]×(1-.40)

After-tax income=$12,800-($9,600+$1,200)×0.60

After-tax income=$12,800-$10,800×0.60

After-tax income=$2,000×0.60

After-tax income=$1,200

Inconclusion the after-tax income is $1,200.

Learn more about after-tax income here:brainly.com/question/1775528

5 0
2 years ago
When individuals acquire, process, and act on relevant economic information promptly in their own self-interest and investigate
notsponge [240]

Answer: rational

Explanation:

Rational expectations is a way by which individuals make their decisions based on their past experience, self interest, human rationality and the information that they have.

Therefore, when individuals acquire, process, and act on relevant economic information promptly in their own self-interest and investigate its impact on others, they are said to have rational expectations.

3 0
3 years ago
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