Answer:
The inflation rate is different using the two methods as the rate of inflation calculated by the CPI holds basket of goods and services constant while the GDP deflator allows it to change.
Explanation:
i. Value of market basket of the good in 2020 = ($50*2) + ($5*6) = $130
Value of market basket of the good in 2021 = ($70*2) + ($6*6) = $176
CPI in 2020 = ($130 / $130) * 100 = 100
CPI in 2021 = ($176 / $130) * 100 = 135.38
Thus, The percentage change in overall price level is = [(135.38 - 100) / 100) * 100 = 35.38%
ii. Nominal GDP in 2020 = ($50 * 20) + ($5 * 60) = $1300
Nominal GDP in 2021 = ($70 * 21) + ($6 * 80) = $1950
Real GDP in 2020 = ($50 * 20) + ($5 * 60) = $1300
Real GDP in 2021 = ($50 * 21) + ($5 * 80) = $1450
GDP deflator in 2020 = (Nominal GDP in 2107 / Nominal GDP in 2107) * 100 = ($1300 / $1300) * 100 = 100
GDP deflator in 2021 = (Nominal GDP in 2108 / Nominal GDP in 2108) * 100 = ($1950 / $1450) * 100 = 134.48
Thus, the percentage change in overall price level is = [(134.48 - 100) / 100) * 100 = 34.48%
Contract.
A contract is a legally binding agreement that controls the rights and responsibilities of the parties who agree to it.
Answer:
c. cease production immediately, because it is incurring a loss.
Explanation:
When a business engages in production it looks to make profit. That is for the production price to be higher than cost incurred in producing the good.
However when the price is lower than the average variable cost as is indicated in the scenario then the firm needs to shut down production in the short term.
Factors that will adversely affect a firm in the short term are price, average total cost, and average variable cost.
Once price is less than average total cost or average variable cost it is better to stop production.
As they are incurring an economic loss
Answer:
Han Dynasty
Explanation:
Han Dynasty art is an art that originated from China.
Han Dynasty art refers to a type of artwork that comprises of lacquerware productions, paintings on paper, jade carving, calligraphy, and silk weaving using materials such as stones, glazed and unglazed ceramics, bronze, wood, jade, etc. to create beautiful art piece.
Han Dynasty art and inventions like paper still influence the world today because they are widely accepted and beautiful.
Answer:
1. When searching for unrecorded liabilities, the auditors consider transactions recorded <u>after</u> year end.
<em>Auditors consider transactions recorded after year end to determine if it was supposed to be recorded in the current period. </em>
2. Accounts payable <u>confirmation</u> can be mailed to vendors from whom substantial purchases have been made.
<em>As a way to keep a document trail, creditors from whom substantial goods were bought from can be mailed a confirmation. </em>
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider <u>ratios</u>.
<em>Ratios such as the Payables turnover can be used to evaluate the reasonableness of Accounts payable. </em>
4. When auditors find unrecorded liabilities, before adjusting they must consider <u>materiality</u>.
<em>
They must consider if the adjustment is material or significant enough to record. </em>
5 Auditiors need to consider <u>shipping terms</u> terms for determining ownership and whether a liability should be recorded.
<em>Shipping terms need to be considered because they can tell who owns goods in transit and therefore if a liability is needed for them. Shipping terms such as FOB Shipping point mean that the business incurs the liability as soon as the seller ships the goods. </em>
