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Lubov Fominskaja [6]
3 years ago
10

Suppose the economy is in long-run equilibrium. Then because of corporate scandal, in- ternational tensions, and loss of confide

nce in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. Which curve shifts and in which direction? (a) aggregate demand shifts right (b) aggregate demand shifts left (c) aggregate supply shifts right (d) aggregate supply shifts left
Business
1 answer:
dsp733 years ago
7 0

Answer:

The answer is: b

Explanation:

In long-run equilibrium, the long run aggregate demand curve and aggregate supply curve intersect where the marginal revenue (revenue derived from selling an additional unit) and marginal cost (cost incurred from producing) an additional unit) are equal.  In the long-run equilibrium, this intersection occurs at the lowest point of the long-run average total cost curve (curve depicting the average cost per unit of production).

Holding all else constant, short run changes in the economy would not change the potential output levels. The long-run aggregate supply curve would remain fixed at the potential level of output. However, these changes: international tensions, corporate scandals and loss of confidence in policymakers would cause shifts in the aggregate demand curve since demand would be adversely affected.

Consumer confidence is the perspective or outlook that consumers have on the state of the economy. The destabilising factors given in this scenario would raise the levels of uncertainty and perceived risk, reducing the confidence levels of consumers and ultimately resulting in reduced demand. In long-run equilibrium, when demand is reduced, it is indicated by a leftward shift in the aggregate demand curve.

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Forey, Inc. competes against many other firms in a highly competitive industry. Over the last decade, several firms have entered
crimeas [40]

Answer:

The market that characterizes the industry in which Forey competes is a market where competition is at its greatest possible level and it is a perfectly competitive market and the reason is because its returns decrease with the entering of new firms, also four-firm concentration ratio and Herfindahl Hirschman index are both quite small, so no one has significant market power to set or even influence the market price. In the short-run Forey Inc’s profit will decrease as more and more new firms enter the market and in the long-run Forey Inc will receive only normal (zero) economic profit.

4 0
3 years ago
Exam hide or show questions question content area revenue and expense account are permanent accounts. true false
klio [65]

Because they are always converted to an income summary throughout the closing process, revenue and expense accounts are known as nominal accounts.

so the statement is false

Revenue Definition:

Revenue in financial accounting refers to an inflow of funds, typically from sales or services provided by commercial activity. It is also known as sales or business turnover. In other terms, revenue refers to the amount of money that a company or organization receives. For instance, certain businesses may receive income from royalties, interest, or copyright fees. While for some businesses, money may come from the services they provide to clients. Donations from groups, corporations, and people are referred to as revenue for non-profit organizations.

Operating Revenue Examples:

  • Sales.
  • Fees or Commission Earned.
  • Service Revenues.

Expenses Definition:

A money outflow is known as an expense or expenditure in financial accounting. As an illustration, a tenant's expenses can include rent. Parents' expenses could include the cost of their children's tuition. Expenses for a business include things like electricity bills, bank fees, sales expenses, phone bills, repairs, and services.

List of expenses in accounts frequently observed when preparing financial statements:

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Learn more about Revenue and expense accounts here

brainly.com/question/16749768

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3 0
1 year ago
What is the percentage decrease in revenue
Romashka-Z-Leto [24]

Answer:

c) 82.33 is the percentage decrease in revenue from tourist to Florida

6 0
2 years ago
he director of capital budgeting for See-Saw Inc., manufacturers of playground equipment, is considering a plan to expand produc
kicyunya [14]

Answer and Explanation:

The computation is shown below:

Debt = D ÷ (E + D)

= 0.8 ÷ (1 + 0.8)

= 0.4444

Now

Weight of equity = 1 - Debt

= 1 - 0.4444

= 0.5556

As per Dividend discount model

Price = Dividend in 1 year ÷ (cost of equity - growth rate)

40 = $2 ÷ (Cost of equity - 0.06)

Cost of equity = 11%

Cost of debt

K = N

Let us assume the par value be $1,000

Bond Price =∑ [(Annual Coupon) ÷ (1 + YTM)^k] + Par value ÷ (1 + YTM)^N

k=1

K =25

$804 =∑ [(7 × $1000 ÷ 100)/(1 + YTM ÷ 100)^k] + $1000 ÷ (1 + YTM ÷ 100)^25

k=1

YTM = 9

After tax cost of debt = cost of debt × (1 - tax rate)

= 9 × (1 - 0.21)

= 7.11

WACC = after tax cost of debt × W(D) + cost of equity ×W(E)

= 7.11 × 0.4444 + 11 × 0.5556

= 9.27%

As we can see that the WACC is lower than the return so it should be undertake the expansion

5 0
2 years ago
Costs incurred regardless of the number of units of a product that are produced or sold are called:
Tema [17]

<span>C. Fixed Costs. Fixed costs are incurred regardless of the number of units of a product are produced or sold on a given period. Fixed costs are expenses incurred and remain unchanged within a relevant period. These costs are fixed in relation to the quantity of production for a certain period.</span>

4 0
3 years ago
Read 2 more answers
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