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Shtirlitz [24]
3 years ago
15

Explain whether each of the following will cause a shift of the AD curve or a movement along the AD curve. a. Firms become more

optimistic and increase their spending on machinery and equipment. b. The federal government increases taxes in an attempt to reduce a budget deficit. c. The U.S. economy experiences 4 percent inflation.
Business
1 answer:
Aleks04 [339]3 years ago
7 0

Answer:

a. AD curve will shift to the right

b. AD curve will shift to the left

c. Movement along the AD curve.

Explanation:

a. When firms become more optimistic and increase their spending on machineries,this brings about changes in investment and it will cause a shift to the right in the aggregate demand curve.

b. When The federal government increases taxes in an attempt to reduce a budget deficit. This will cause a change in consumption as people will have less money to spend since disposable income has been reduced, and it will cause the aggregate demand curve to shift inwards to the left.

c. A 4 percent in US inflation will bring about a change in price level and there will be a movement along the aggregate demand curve.

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Equity method journal entries (price greater than book value) An investor purchases a 25% interest in an investee company, and t
Crazy boy [7]

Answer:

See answer an explanation below.

Explanation:

The journal entries will look as follows:

<u>General Journal </u>

<u>Description                                          Debit ($)             Credit ($)          </u>

Equity investment                               145,000

Cash                                                                                  145,000

<em><u>(To record purchase of investment.)                                                      </u></em>

Cash                                                      25,000

Income from equity investment (w.1)                              25,000

<em><u>(To record equity income.)                                                                       </u></em>

Cash                                                     20,000

Equity investment                                                            20,000

<u><em>(To record receipt of cash dividend.)                                                      </em></u>

Income from equity investment           2,000

Equity investment (w.2)                                                     2,000

<em><u>(To record patent amortization expense.)                                             </u></em>

Cash                                                   180,000

Gain on sale of equity invest. (w.4)                                 32,000

Equity investment (w.3)                                                  148,000

<u><em>(To record sale of investment.)                                                              </em></u>

Workings

w.1: Income from equity investment = Investee's net income * Percentage of interest = $100,000 * 25% = $25,000

w.2: Equity investment = (Patent value / Remaining useful life) * Percentage of interest = ($80,000 / 10) * 25% = $8,000 * 25% = $2,000

w.3: Equity investment = $145,000 + $25,000 - $20,000 - $2,000 = $148,000

w.4: Gain on sale of equity investment = Sales proceed - w.3 = $180,000 - $148,000 = $32,000

4 0
3 years ago
A _____ grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale o
Anna007 [38]

Answer:

patent

Explanation:

A patent is a type of intellectual property that is classified as an intangible asset. It provides the patent holder protection for any invention that he/she has developed and registered with the proper government authorities. Patents usually last between 14 to 20 years and during that time the patent holder has the exclusive right to manufacture, use or sell his invention.

7 0
3 years ago
"a promise to your mother to refrain from going to bed later than 11:00 p.m. on a school night is what type of consideration?"
zimovet [89]
Statement: <span>"a promise to your mother to refrain from going to bed later than 11:00 p.m. on a school night

</span>The type of consideration: <span>A benefit to the promisor

Promisor is the person who makes a promise. A person promises to refrain to not got to the bed later than 11:00 pm at school night is for the long term benefit of the person who is making the and not who is asking for the promise.</span>
6 0
3 years ago
A _______ lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of
Sveta_85 [38]

A step lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of the agreement.

4 0
3 years ago
Read 2 more answers
As applied to mortgage loans, which of the following statements is FALSE? By increasing the number of payments per year you incr
Ann [662]

Answer:

The statement that is false about mortgage loans is Advertised rates are annual percentage rates.

Explanation:

Mortgage loan refers to a loan that uses real estate as collateral to receive cash upfront to be redeemed after the loan repayment is completed. if the loan is not remitted as at when due , the lender lays claim to the real estate property.

By increasing the number of payments per year you increase your effective borrowing rate.

When you use a spreadsheet to calculate your interest rates, it uses the periodic interest rate, not the annual percentage rate.

You can find a monthly payment by dividing the annual payment by 12.

However, advertised interest rate are not the same as your loan's annual percentage rate (APR) because other charges like mortgage insurance, closing costs, discount points and loan origination fees apply.

5 0
3 years ago
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