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Vesnalui [34]
3 years ago
13

What happens to consumption and investment spending when the Federal Reserve decreases the money supply

Business
1 answer:
Illusion [34]3 years ago
3 0

Answer: Consumption and investment spending decrease or falls.

Explanation:

When the Federal Reserve decreases the money supply, this will lead to a fall in the consumption and investment spending. This is a contractionary policy by the government which is typically used to curb inflation.

Since there's reduction in money supply, there'll be less money in circulation and hence, decrease in consumption and investment expenditure.

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Gabriella strongly prefers a specific brand of gourmet coffee. Since there is only one store in her area that sells her brand, s
omeli [17]

Answer:

A. True

Explanation:

For her it is a specialty good because it not sold everywhere, therefore she makes the extra effort.

7 0
3 years ago
Identify which of the factors below are better short-range predictors and which are better long-range predictors of movements in
alina1380 [7]

Answer:

Short range predictors:

c. Nominal interest rate differential

d. Psychological effects

e. Investor expectations

f. Bandwagon effect

Long range predictors:

a. Relative monetary growth

b. Relative inflation rates

Explanation:

Nominal rate, the real rate, and inflation. long term predictors of an economic theory in which a relationship between inflation, nominal interest rate and real interest rate is identified. It defines that real interest rate is equal to inflation minus nominal interest rate.

Bandwagon effect is a short range predictor because it is effect of uptake when people follow others. They take decisions what other do and its their belief that other people have taken the right decision so we too. This is just a short term hop based on beliefs regardless of any underlying evidence.

8 0
3 years ago
Income statement data for Huffman Pharmaceuticals are provided below. Income Statements 12/31/201712/31/2016 Sales Revenue$598,0
koban [17]

Answer:

Huffman Pharmaceuticals

The percentage that should be assigned to Gross Profit, using trend analysis, is:

= 42%.

Explanation:

a) Data and Calculations:

Income Statements           12/31/2017         12/31/2016

Sales Revenue                  $598,000          $724,000

Cost of Goods Sold             337,000            427,000

Gross Profit                          261,000            297,000

Operating Expenses            137,000             146,000

Operating Income               124,000              151,000

Other Income (Expense)      60,000              23,000

Income before Tax              184,000             174,000

Income Tax Expense             71,000              76,000

Net Income                         $113,000           $98,000

Income Statements           12/31/2017         12/31/2016

Sales Revenue                  $598,000          $724,000

Cost of Goods Sold             337,000            427,000

Gross Profit                          261,000            297,000

Ratio of Gross profit to

 Sales Revenue

2017 = $261,000/$598,000 * 100 = 43.65% =  44%

2016 = $297,000/$724,000 * 100 = 41%

Average Gross profit ratio for the two years = 42.5% (44 + 41)/2.

b) Huffman's trend analysis is the use of its past financial performance indices to predict its future financial performances.  Past performances are expressed in percentages, forming the basis for predicting and comparing future performances of an entity.

6 0
2 years ago
Computing Income Taxes
Anastaziya [24]

Answer:

The​ corporation's tax liability is $ 228,820.

Explanation:

To calculate tax liability we first have to find net profit. Detail calculation is given below.

<u><em>Net profit Calculation</em></u>

Sales                                                                                 $ 3,130,000

cost of goods sold and the operating expenses          ($ 2,080,000)

Interest expense                                                              ( $ 377,000)

Net profit                                                                           $ 673,000

<u><em>Tax liability Calculation</em></u>

Income fall under Tax bracket of  34%  ($75,001 to ​$10,000,0000 for corporate tax. No additional surtax will be charged as income do not fall under its net.

Tax liabilty = 673,000 * 34% = $ 228,820

​

5 0
3 years ago
Locke Inc has a machine that installs tires. The machine is now in need of repair. The machine originally cost $10,000 and the r
Phoenix [80]

Answer: William should replace the machine with a new one because over that 2 year span he will be losing less money, if he were to repair he would lose more money.

Explanation:

5 0
2 years ago
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