Answer:
the long-run framework directs one to avoid deficits; in the short-run framework deficits are useful if the economy is significantly below potential.
Explanation:
"Budget deficits should be avoided, even if the economy is below potential, because they reduce saving and lead to lower growth." This policy directive follow the long-run framework directs one to avoid deficits; in the short-run framework deficits are useful if the economy is significantly below potential.
<u>The reason is that in the short-run, deficits offer economic solutions by being an antidote to recessions, hence they could be a strategy of recession management in the short run</u>
<u>However in the long-run, deficits are not advisable as they could lead to debts because the major way to manage such deficits is by external borrowings. </u>
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Answer:
The correct answer is: the planning fallacy.
Explanation:
The planning fallacy is the paradox referring to projecting the length it will take to accomplish an objective longer than what it could take. The mistaken assumption happens because individuals tend to compare the time it will take them to reach their objectives with the time it took others to achieve the same goals.
Answer:
All net income, less all dividends, since the company began operations.
Explanation:
Retained Earnings are the retained profits that the company keeps with itself, for meeting any case of emergency or for growing company and thus, meeting the growing expenses.
Each year when company earns profits and then, it distributes its profits in the form of dividends, the balance remaining after paying the dividends is added to retained earnings.
Thus, the entire balance of these kind of profits not paid anywhere else and also not utilized is called retained earnings.
Gross profits is defined as the total profit generated minus the costs of goods sold, that is, gross profit = sales - costs of goods sold.
From the question given,
Net sale = $ 100,000
Costs of goods sold = $ 70,000
Gross profit = $100,000 - $70,000 = $30,000.
Thus, the gross profit is $30,000.
Operating expenses is not directly involved in the production process that is why it is not used in the calculation of gross profit. But the operating cost will be involved in the calculation if we are asked to calculate the NET PROFIT.
Answer:
Increase, Increase
Explanation:
Normal goods experience a rise in demand if the consumer's income increases or economic conditions improve. Normal goods are sometimes referred to as necessary goods.
Jet fuel can be considered as input the cost of vocations. An increase in jet fuel will result in a rise in the cost of vacations. A rise in the cost of vacation leads to an increase in their equilibrium price.
If vacations are normal goods, an increase in people's income will increase their demand. Therefore, the equilibrium quantity of vacations will increase.
