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3 years ago

What is the reason it's better to underestimate your income instead of overestimating when creating your budget?

Business

1 answer:

Alik [6]3 years ago

6 0

Answer:

Underestimating your income is a conservative and healthy measure that can avoid financial problems.

Explanation:

Underestimating your income is a conservative and healthy measure, such as it is overestimating your expenses.

Specially when your income is variable iit can be hard to predict. You will be safer both if your income lowers or your unpredictable expenses increase.

There are many unpredictable situations that could put you in a difficult situation: a disease, a natural disaster, the need to help a family member or friend in trouble. If any of these unfortunate circumstances arises and your budget is too tight, you could see yourself in financial trouble.

But, if you if all is smooth you will have in a happy situation, you will have a surplus which can use for savings, for an important purchase, or for vacations.

It is better to be cautious than to regret later!

You might be interested in

With a downward-sloping demand curve, average revenue is equal to price A. because the firm must lower its price to sell addit

tia_tia [17]

Answer:

D. Actually, average revenue is always equal to price, whether demand is downward sloping or no

Explanation:

This is because Average revenue is the amount of revenue that is obtained by selling an addition unit of output. This additional revenue is always = Price as proven by the equation below,

Total Revenue = Price * Quantity

Thus, AR = Total Revenue / Quantity

Input elements of the Total revenue we get,

AR = Price * Quantity / Quantity

AR = Price

Hope that helps.

3 0

3 years ago

If real GDP is $500 billion, full employment GDP is $300 billion, and the marginal propensity to consume is 0.9, then Congress s

melomori [17]

Answer:

tax increased = $22.22 billion

so correct option is 3. increase taxes by $22.22 billion.

Explanation:

given data

real GDP = $500 billion

employment GDP = $300 billion

marginal propensity = 0.9

solution

we know here that Inflationary gap will be

Inflationary gap = Real GDP - Full-employment GDP

Inflationary gap = $(500 - 300) billion

Inflationary gap = $200 billion

and tax Multiplier is

Tax Multiplier = $\frac{- marginal propensity}{1 - 0.9}$

Tax Multiplier = -9

here negative sign means that decrease real GDP by $9

so tax should be increased by $1

so we can say that decrease real GDP by $200 billion

and tax should be increased = $\frac{200 billion}{9}$

tax increased = $22.22 billion

so correct option is 3. increase taxes by $22.22 billion.

3 0

3 years ago

Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthl

ElenaW [278]

Answer:

Karim Corp

Cash Budget

July August September

Cash inflows: $20,000 $26,000 $40,000

Cash outflows: ($28,000) ($30,000) ($22,000)

Monthly cash flow: ($8,000) ($4,000) $18,000

Monthly interests: $0 ($76) ($116.76)

Initial cash balance: $8,400 $8,000 $8,000

Ending cash balance: $400 $3,924 $25,883.24

Required bank loan: $7,600 $4,076 $0

Payment of bank loan: $0 $0 ($11,676)

Total $8,000 $8,000 $14,207.24

Explanation:

A cash budget is the estimation of the business's future cash flows including estimated revenues and expenses.

4 0

3 years ago

An insured dies within the time limit of an Increasing Term Rider and the beneficiary receives the face amount plus the value of

raketka [301]

Answer:

The correct answer is B

Explanation:

Return of premium rider is the kind of policy where the add on that returns, the premiums paid if the insured person or outlives the terms and the conditions of the policy.

So, in this case, Insured person dies within the time period, and the beneficiary received the face amount and in addition all the premiums paid. It is the return of premium which is linked with the policy.

5 0

3 years ago

Any object or objects that a group of people use to buy and sell goods and services is called: Group of answer choices capital a

Ivan

When people are able to use a certain object or objects to buy and sell goods and services, this is called Money.

<h3>What is money?</h3>

Simply put, money is a medium of exchange that allows people to exchange goods and services such that both parities to a transactions feel they got a fair deal.

This means that money can be anything ranging from hard currency, to other goods and services. For instance, if you used an apple to buy another apple, the first apple is money.

In conclusion, an object that allows people to trade for other goods and services is called Money.

Find out more on the purposes of money at brainly.com/question/3182649

#SPJ1

6 0

1 year ago