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Maslowich
3 years ago
5

Consider an economy with only two groups of​ people: Wage earners and Goods sellers. If the price level increases by​ 20% while

the nominal wages remains the​ same, A. income will be redistributed from goods sellers to wage earners. B. income will be redistributed from wage earners to goods sellers. C. no income redistribution will occur as nominal wages are same as before. D. real wages will not be affected as nominal wages remained the same.
Business
1 answer:
lubasha [3.4K]3 years ago
7 0

Answer:

Income will be redistributed from wage earners to goods sellers.

Explanation:

In this instance there are only 2 parties in the economy, the wage earners (buyers) and the seller's.

When there is a price increase by 20% the sellers gain more because they are getting 20% higher on their previous sales.

On the other hand the buyers or wage earners now have to pay more with a constant wage for goods. Their purchasing power is reduced.

So income is being redistributed from the wage earners to the sellers in this economy.

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2018
patriot [66]

Answer:

Journal Entries

2018

Feb. 1 Debit 6% Note Receivable (Candace Smith) $12,000

Credit Cash $12,000

To record receipt of a one-year, 6% note.

Apr. 6 Debit 12% Note Receivable (Park Pro) $6,000

Credit Sales Revenue $6,000

To record receiving a 90-day, 12% note.

Apr. 30 Debit Interest Receivable $230

Credit Interest Revenue $230

To accrue interest revenue for both notes.

Explanation:

a) Data and Analysis:

2018

Feb. 1 6% Note Receivable (Candace Smith) $12,000 Cash $12,000

a one-year, 6% note.

Apr. 6 12% Note Receivable (Park Pro) $6,000 Sales Revenue $6,000, receiving a 90-day, 12% note

Apr. 30 Interest Receivable $230 Interest Revenue $230

($12,000 * 6% * 3/12) + ($6,000 * 12% * 25/360)

= $180 + $50

= $230

4 0
2 years ago
“EBIT is generally considered to be independent of financial leverage, because EBIT is the result of a firm’s operating effectiv
Arturiano [62]

Answer:

The answer is below

Explanation:

EBIT is known as an accounting measure to determine the profit level of a firm. It is an acronym of Earnings Before Interest and Taxes.

EBIT is generally considered to be independent of financial leverage because EBIT is the result of a firm’s operating effectiveness.

This is true because, EBIT is based on the firm's level of sales and cost of operation, of which financial leverage has no effects on it.

However, with excessive debt levels, EBIT might be influenced by financial leverage.

This implies that even though the financial leverage of a firm has no direct influence on EBIT, in a situation whereby a firm is operating at huge deficits, every aspect of the film will be concerned. This will include staff, customers, investors, and operational activities, thereby affecting the firm's sales and cost of operation. As a result, this will ultimately affect the firm's EBIT.

6 0
3 years ago
When does information become a liability for an organization?
jeyben [28]
A liability is a debt to an oraganization/business. Once the information brings the company down -holds them back- it becomes a liability. It's like if you have an accounts payable your creditors would have full rights to your money upon company liquidation. That means your company will earn less revenue. A liability is something you owe.
7 0
3 years ago
How is the value of a product determined?
svetoff [14.1K]

Answer:

One approach is to use the simple equation Value = Benefits / Cost. The plus side to this approach is that it is concrete and quantifiable. You can measure the profit consistently throughout the life of the product, charting changes in value over time.

5 0
3 years ago
Stock prices tend to ignore unexpected changes in dividend payments. Companies prefer to cut dividend payments rather than borro
Shkiper50 [21]

Answer: B. Maintaining a steady dividend is a key goal of most dividend-paying companies.

Explanation:

Companies that pay dividends prefer in general, to maintain a steady dividend overtime. This does not necessarily mean that they will pay the same amount of dividend but rather that they will pay out dividends as within a certain percentage range of the net income.

Companies do not prefer to cut dividends so as not to send the wrong message so A is wrong. Share repurchases reduces agency costs so C is wrong. Short term fluctuations in cash flow are not the key favor in determining dividend policy as the company might still pay out the same regardless so this is wrong as well. Option B is the best answer.

7 0
3 years ago
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