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3 years ago

The amount by which federal spending exceeds revenue in a given year is known as ap gov multiple choice

1 answer:

3 0

The amount by which federal spending exceeds revenue in a given year is known as budget deficit. Having a budget deficit means that the government spent more money than they made in a current year. When this happens the government owes money to others because they had to borrow from accounts to pay off debt.

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Hubert lives in San Francisco and runs a business that sells boats. In an average year, he receives $842,000 from selling boats.

aev [14]

Answer:

Explicit costs are normal costs of operating a business.

Implicit costs are opportunity costs meaning that they are the benefits foregone by engaging in a certain course of action.

The wholesale cost for the pianos that Hubert pays the manufacturer ⇒ EXPLICIT COST.

The salary Hubert could earn if he worked as an accountant ⇒ IMPLICIT COST.

The wages and utility bills that Hubert pays ⇒ EXPLICIT COST

The rental income Hubert could receive if he chose to rent out his showroom. ⇒ IMPLICIT COSTS

Accounting Profit = Revenue - Explicit costs

= 842,000 - 452,000 - 301,000

= $89,000

Economic Profit = Revenue - Explicit costs - Implicit costs

= 842,000 - 452,000 - 301,000 - 38,000 - 48,000

= $3,000

If Hubert's goal is to maximize his economic profit, he should stay in the piano business because the economic profit he would earn as an accountant would be -$3,000.

Economic profit as accountant = Salary + rental income - accounting profit from piano

= 48,000 + 38,000 - 89,000

= -$3,000

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3 years ago

Railway Cabooses just paid its annual dividend of $3.10 per share. The company has been reducing the dividends by 10.9 percent e

Vlada [557]

Answer: Po = Do(1+g)/Ke-g

Po = $3.10(1-0.109)/0.13 - (-0.109)

Po = $3.10(0.891)/0.13+0.109

Po = $3.10(0.891)/0.239

Po = $11.56

Explanation: The current market price of the stock equals the current dividend paid multiplied by 1+g divided by the excess of cost of equity over growth rate. The growth rate is negative in this case, thus, the growth rate would be deducted from 1. Moreso, the growth rate will be added to cost of equity since it is negative. Thus, the amount that the investor will be willing to pay is $11.56.

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3 years ago

The expression "conglomerate discount" means: Group of answer choices The ability of a widely diversified firm to exploit econom

NISA [10]

Answer:

The stock market tends to value diversified companies at less than their break-up value.

Explanation:

Conglomerate discount is only applicable to large, highly diversified business entities and it basically arises as a result of business analysts having difficulty finding an appropriate way to value group of businesses with complex financial statements.

Simply stated, the expression "conglomerate discount" means that the stock market tends to value diversified companies at less than their break-up value.

Hence, when a vast array of businesses aren't performing optimally as the overall conglomerate or there are issues with respect to its core values and financial statements, business analyst may have to apply the conglomerate discount concept.

In order to calculate the conglomerate discount, business experts add up various estimations of the intrinsic values associated with the respective subsidiary firms in a conglomerate and lastly, the market capitalization of the conglomerate is subtracted from that sum. Intrinsic value refers to a measure of the underlying value of a firm and its cash inflow.

Also, it's worthy of note that the sum of the various estimations is typically greater than the conglomerate stock values.

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3 years ago

If the federal reserve conducts an open-market purchase, bank reserves _____ and the money supply _____

Contact [7]

If the federal reserve conducts an open market purchase, bank reserve DECREASE and the money supply INCREASE. The federal reserve has the responsibility to control the amount of money available in the economy. When the federal reserve make a purchase, their reserve will decrease, the money supply in the economy will increase, interest rates will fall and investment spending will increase.

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3 years ago

If the economy is producing a level of output $45 billion above full-employment real GDP, the most viable option to shift the ou

lakkis [162]

Answer: c. tax increase of some amount less than $45 billion

Explanation:

Increasing taxes will have the effect of reducing the Consumption in the Economy as it will reduce the disposable income that people have to spend on goods and services. It is therefore an option to bring the Economy back down to fill employment.

However, when the Taxes are increased, they should be increased by an amount less than the $45 billion because Taxes have a Multiplier effect meaning that an increase in taxes will slow down the economy more than the increase itself. This is why it should be an amount less than 45 billion especially having taken the Multiplier into account so that a good estimate of the amount needed will be ascertained.

5 0

3 years ago