If the FED want to stabilize output then FED has to decrease the money supply if the net exports were increased.
Given that there was a large increase in net exports.
We are required to advise the FED about the work he should do to stabilize the output.
The increase in exports shows that there had huge amount of money in the economy. So to stabilize the output FED has to decrease the output and to decrease the output FED has to decrease the money supply.
FED can decrease the money supply in various ways as under:
- Increase in interest rate.
- Selling of government securities.
There are many more ways to decrease the money supply. When the money supply decreases the people in the country may not be able to produce more goods and the production of goods decreases.
Hence if the FED want to stabilize output then FED has to decrease the money supply if the net exports were increased.
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The consumer protection administrative organizations battle to guarantee that people are dealt with decently, get the important data to settle on educated choices, are secured against item dangers and can utilize lawful response if necessary. Certain sorts of items draw in more direction because of their higher danger of customer damage or passing, for example, nourishment, meditates, kids' items, and cars.
The following are the five private organizations that ensure consumer rights:
<span>Consumer Financial Protection Bureau (CFPB)
</span><span>Consumer Product Safety Commission (CPSC)
</span><span>Federal Trade Commission (FTC)
</span><span>Food and Drug Administration (FDA)
</span><span>National Highway Traffic Safety Administration (NHTSA)</span>
According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
<h3>
Who is Adam smith?</h3>
Scottish economist and philosopher Adam Smith was a leading proponent of political economy and a pivotal figure in the Scottish Enlightenment. According to Adam Smith's economic theory, markets typically function most effectively when the government keeps out of the way. A result of Adam Smith's beliefs on capitalism, free markets, and supply and demand, he is referred to as the "father of economics." Smith supported the idea of taxing income, profits, sales, and labor.
The Law of Demand and Supply, the Law of Self Interest, and the Law of Competition are Adam Smith's three economic laws. According to these laws, sufficient commodities would be produced at the lowest cost to satisfy demand in a market economy, and better items would be produced at lower costs owing to competition.
Hence, According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
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For Drake Corporation Average Cost per Unit of Direct materials $6.70 Direct labor $3.10 Variable manufacturing overhead $1.75. One more unit will cost $11.55 ($6.70+3.10+1.75).
The total amount of product costs incurred to make 4,800 units will be calculated as:
Direct materials = 4800 x 6.70 = 32,160
Add: Direct labor= 4800 x 3.10 = 14880
Add: Variable manufacturing overhead = 4800 x 1.75 = 8400
Therefore, the Total product cost will be:
= 32160+ 14880 + 8400
= $55,440
Total product cost for 4800 units will be = $55,440
Average costs per unit units will be = $55,440/4800
=$11.55
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