Answer:
The west should pursue policies that encourage economic growth and stability. Their options include:
1. Pursuing sound monetary policies that promote economic growth and stability.
2. Adopting pro-growth fiscal policies that help to increase government revenue and reduce government spending.
3. Promoting free trade and investment that allow for the efficient allocation of resources and the maximization of economic growth.
4. Pursuing policies that increase the flexibility of their economies and allow for a quick response to changing economic conditions.
5. Encouraging entrepreneurship and innovation that lead to new products and services and create jobs and economic growth.
A public good is an example of a good or product that individuals can consume or use without reducing its total availability for others. Goods like national security, sewer systems, public parks, among others, are considered as public goods. Many can benefit from it and it is considered by economists as goods that are "non-rivalrous" or "non-exclusive." <span>
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Answer: D
Explanation: A capital budgeting project is usually evaluated on its own merits. That is, capital budgeting decisions are treated separately from capital structure decisions. In reality, these decisions may be highly interwoven. This interweaving is most apt to result in firms accepting some negative NPV all-equity projects because changing the capital structure adds enough positive leverage tax shield value to create a positive NPV.An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company’s market value while minimizing its cost of capital.
In theory, debt financing offers the lowest cost of capital due to its tax deductibility. However, too much debt increases the financial risk to shareholders and the return on equity that they require. Thus, companies have to find the optimal point at which the marginal benefit of debt equals the marginal cost. As it can be difficult to pinpoint the optimal structure, managers usually attempt to operate within a range of values. They also have to take into account the signals their financing decisions send to the market.
A company with good prospects will try to raise capital using debt rather than equity, to avoid dilution and sending any negative signals to the market. Announcements made about a company taking debt are typically seen as positive news, which is known as debt signaling. If a company raises too much capital during a given time period, the costs of debt, preferred stock, and common equity will begin to rise, and as this occurs, the marginal cost of capital will also rise.
To gauge how risky a company is, potential equity investors look at the debt/equity ratio. They also compare the amount of leverage other businesses in the same industry are using on the assumption that these companies are operating with an optimal capital structure—to see if the company is employing an unusual amount of debt within its capital structure.
Answer:
b. On the production possibility frontier.
Explanation:
The production possibility frontier is a curve showing various combinations of the maximum production volumes of several goods (goods or services) that can be created under conditions of full employment using all resources available in the economy. Different release combinations reflect different uses of limited resources. For example, labor can be used in the production of various goods. The use of a unit of labor in the production of one good leads to the impossibility of its use in the production of any other good. Therefore, an increase in output in one sector of the economy leads to opportunity costs in the form of a decrease in output in another sector. In different sectors of the economy, resources can be used with different efficiency, therefore, the curve of production opportunities reflects a complex nonlinear relationship between different combinations of output. The intensity of resource use depends on the presence of other factors of production. For example, labor productivity depends on the availability of capital, as well as on the level of technology. The issue is also influenced by the law of diminishing marginal returns: with an increase in a resource and an unchanged number of other resources, the marginal return will decrease. The production capability curve is part of the optimal resource allocation task.
In autarky, when there happens the utility maximization the consumption point which is also equilibrium condition case, will be on the production possibility frontier. Because the consumption point will satisfy the problem and be the solution to make the equilibrium.
Answer:
$111,000
Explanation:
net income for Skysong during 2022:
total revenues $748,000
<u>- total expenses ($637,000)</u>
net income $111,000
Net income is not affected by new common stocks being issued, since no interests is paid.
It affects dividends because without net income dividends cannot be distributed, but dividends do not affect net income,
Retained earnings are increased by net income after taxes (= $111,000 x 79% = $87,690) - distributed dividends $36,000 = $51,690
