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3 years ago

Explain the “Crowding out” effect and state how this effect can be avoided.

Business

1 answer:

r-ruslan [8.4K]3 years ago

3 0

<h2>The Crowding Out Effect: </h2>

A condition in which hiked up interest rates contribute to a decrease in private investment expenditure such that it hinders the initial increase of total investment spending is called crowding out effect.
This can be avoided by reducing the involvement of the government in the functioning of the free market.
Moreover, this effect can also be avoided by eliminating the fluctuations in interest rates that matter to the market such as that on loans.

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Companies report prior period adjustments, net of any income tax effects in the:

ehidna [41]

Companies report prior period adjustments, net of any income tax effects in the single-step income statement.
A single step income statement is one of two commonly used formats for the income statement or profit and loss statement. It uses only one subtraction to arrive at net income. On the other hand, a multi-step statement reveals the company's gross profit, which is the difference between its sales revenue and its cost of goods sold, and operating profit, which is the difference between its gross profit and its operating expenses.

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4 years ago

Robert sold his Lebec Corporation stock to his sister Karen for $8,000. Robert's cost basis in the stock was $15,000. Karen late

lara [203]

Answer:

$7,500

Explanation:

A few points must be considered in order to calculate ther realized gain.

1. Although Robert's stock in Lebec Corporation was $15,000 at cost, it was sold to Karen (his sister and related party) for $8000. Since it is related party transaction, the loss of $7000 ($15,000-$8,000) cannot be reported as a loss.

2. Karen's basis for the stock is $8000 (the amount she bought it from her brother).

3. Karen sold the stock to Dana for $15,500. The realized gain since Dana is not related is $15,500-$8,000= $7,500. This becomes the realized gain since it is an unrelated party transaction.

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3 years ago

Liquidating Partnerships—Deficiency Prior to liquidating their partnership, Wakefield and Barns had capital accounts of $105,000

sammy [17]

Answer:

Liquidating Partnerships

a. The amount of Barn's deficiency is:

= $5,000.

b. The amount distributed to Wakefield, assuming that Barns is unable to satisfy the deficiency is:

= $40,000.

Explanation:

a) Data and Calculations:

Sharing of profits and losses = 1:1

Wakefield Barns Total

Capital account balances $105,000 $55,000 $160,000

Proceeds from partnership assets = 40,000

Loss from sale of partnership assets = 120,000

Sharing of loss equally -60,000 -60,000 -120,000

Capital account balances $45,000 ($5,000)

Distribution to Wakefield 40,000

Barn's capital account deficiency $5,000

b) When Barn is not able to satisfy his capital deficiency after the equal sharing of the loss from the sale of the partnership assets, the amount distributed to Wakefield is reduced by Barn's deficiency. Therefore, Wakefield will be paid cash of $40,000 since there are no liabilities.

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3 years ago

To an economist, utility refers to the______________.a. usefulness of a good or service.b. satisfaction that results from the co

frozen [14]

Answer:

The correct answer is letter "B": satisfaction that results from the consumption of a good.

Explanation:

Utility is referred to as the satisfaction or joy an individual perceives by consuming a good or service. The more the individual consumes that good the higher the satisfaction until a point where the joy starts to diminish and is eventually null. The concept of utility assumes individuals make rational decisions to maximize their benefits.

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3 years ago

Judith Thompson is the manager of the student center cafeteria. She is introducing pizza as a menu item. The pizza is ordered fr

dolphi86 [110]

Answer:

The optimal number of pizza that Judith should order is 184.

Explanation:

Judith is introducing pizza in the cafeteria menu.

She is expecting a weekly demand of 10 pizzas.

The cafeteria is open 45 weeks a year.

The ordering cost of pizza for Judith is $15 and the holding cost is $0.40.

The annual demand for pizza