Answer: The answers to the question are provided below.
Explanation:
The basic objective of the monetary policy is to achieve economic growth, full employment, and price stability in an economy. The major strengths of the monetary policy are its flexibility and speed when compared to fiscal policy. Monetary policy is faster to implement and brings about desired changes faster.
Monetary policy is easier to conduct than fiscal policy because:
• Monetary policy is implemented by independent monetary authorities. Therefore, unpopular decisions such as the increase of interest rates to decrease inflationary pressure can be used.
• Fiscal Policy is the use of taxation and government spending to control economic activities but it is difficult to get a department that is willing to have its spending cut in order to help the economy.
• Increasing taxes will always be unpopular among individuals and firms and increasin corporations and income tax may lead to supply side effects. For example, increasing income tax may lead to the reduction in the incentives to work.
Fiscal and monetary policies are both effective. In a deep recession and a liquidity trap, the fiscal policy can be more effective than the monetary policy because the government creates job, pays for new investment schemes, rather than relying on the use of monetary policy to indirectly motivate businesses to invest. Likewise, the monetary policy is also more flexible and faster.
Answer:
Flexible budget cost materials and supplies= $2,720
Explanation:
In the flexible budget, we need to multiply the standard quantities by the actual activity.
<u>Standard cost formula:</u>
materials and supplies= 1,950 + 14*x
x= number of vehicles
<u>For 55 vehicles:</u>
Flexible budget cost= 1,950 + 14*55
Flexible budget cost= $2,720
The process of determining the probability that potential customers will not pay is called <u>"credit analysis".</u>
Credit analysis is a sort of analysis an investor or bond portfolio chief performs on organizations or other obligation issuing substances to gauge the element's capacity to meet its obligation commitments. The credit investigation looks to recognize the suitable dimension of default chance related with putting resources into that specific substance.
The result of the credit analysis will figure out what hazard rating to appoint the obligation guarantor or borrower. The hazard rating, thus, decides if to stretch out credit or advance cash to the obtaining substance and provided that this is true, the sum to loan.
Answer:
Planned Aggregate Expenditure equals <u>290 + 0.75Y</u> and the short run equilibrium output equals <u>1,160</u>.
Explanation:
Autonomous spending basically covers essential needs, e.g. housing expenses, food, clothing, etc., and is not affected by the marginal propensity to consume (MPC).
so consumption must equal: C = 100 + 0.75 (Y income - 40 taxes)
PAE = C + I + G + X = 100 + 0.75(Y - 40) + 50 + 150 + 20
PAE = 100 + 0.75Y - 30 + 50 + 150 + 20 = 290 + 0.75Y
Short run equilibrium exists when Y = PAE:
Y = 290 + 0.75Y
Y - 0.75Y = 290
0.25Y = 290
Y = 290 / 0.25 = 1,160
