Answer:
D. Return to the original output and price level.
Explanation:
In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.
The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.
In order to understand both short-run economic fluctuations and how the economy move from short to long run, we need the aggregate supply and aggregate demand model.
Aggregate supply (AS) refers to the total quantity of output (goods and services) that firms are willing to produce and sell at a given price in an economy at a particular period of time.
An aggregate supply curve gives the relationship between the aggregate price level for goods or services and the quantity of aggregate output supplied in an economy at a specific period of time.
Generally, an economy will return to its original level of output (production) and price level when the short-run aggregate supply curve falls (decreases) and no changes in monetary and fiscal policies are implemented. Fiscal policy refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as aggregate demand (AD), aggregate supply (AS), inflation, and employment within a country.
Answer: There will be a shift in the demand curve to the right.
Explanation:
A booming economy is a peak phase in the business cycle when there is rapid economic expansion which results into higher GDP, higher inflation rate, lower unemployment and rising asset prices.
When investors in the stock market expects a booming economy and an increase in the prices of stocks, the demand curve will shift outwards that is, the demand curve will shift to the right. This means that investors will buy more stocks because they are expecting a price increase.
This is graphically shown below
Explanation:
Data provided in the question
Change in the inventory = $1,030,000
i.e Opening inventory = $1,030,000
Income tax rate = 35%
So, the cumulative effect in the year 2018 is
Opening inventory $1,030,000
Less: income tax rate i.e 35% -$360,500
Balance $699,500
This balance would be addition to the beginning balance of the retained earning statement
Answer:
selling price= $5
Explanation:
Giving the following information:
She figures out that her fixed costs will be $7,500 and her unit variable costs are $2 per raft. She plans to rent all 2,500 rafts she has on hand.
<u>To calculate the break-even selling price, we need to use the following formula:</u>
Break-even point in units= fixed costs/ contribution margin per unit
2,500= 7,500 / (selling price - 2)
2,500selling price - 5,000= 7,500
selling price= 12,500/2,500
selling price= $5