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qaws [65]
2 years ago
9

"Budget deficits should be avoided, even if the economy is below potential, because they reduce saving and lead to lower growth.

" Does this policy directive follow from the short-run or the long-run framework? Short-run framework. The short-run framework directs one to avoid deficits; in the long-run framework deficits are useful if the economy is significantly below potential. Neither. Deficits are offset by an increase in private saving and do not lead to lower growth in the long-run or the short-run framework. Long-run framework. The long-run framework directs one to avoid deficits; in the short-run framework deficits are useful if the economy is significantly below potential. Both. Deficits reduce saving and lead to lower growth in the long-run and the short-run framework.
Business
1 answer:
bixtya [17]2 years ago
5 0

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>

<u />

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Consider the single factor APT. Portfolio A has a beta of 1.3 and an expected return of 21%. Portfolio B has a beta of .7 and an
svetoff [14.1K]

Answer:

Portfolio A and Portfolio B

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

The Market rate of return - Risk-free rate of return) = Market risk premium

Let us assume the market risk premium be X

For Portfolio A:

21% = 8% + 1.3 × X

13% = 1.3  × X

So, the X = 10%

For Portfolio B:

17% = 8% + 0.7 × X

9% = 0.7  × X

So, the X = 12.86%

Based on the market risk premium calculations, we can conclude that Portfolio A should be in short position while Portfolio B should be in long position as portfolio B has higher market risk premium than B

3 0
3 years ago
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Explanation:

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2 years ago
Zach is a salesperson at a large medical supply company. the company wants zach to learn to manage multiple departments, so it o
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Answer: Payment for Knowledge

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Due to the continuous updates and improvement  in the world technology relating to  businesses,  Most Organisations are willing to pay for training   thier employees  off the job so to cope up with those changes, improve the  working conditions, and enhance their knowledge.

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3 years ago
Fetzer Company declared a $0.55 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8
Firlakuza [10]

Answer:

Please see journals below

Explanation:

Retained earnings Dr $104,000

Common dividend payable Cr $104,000

Common dividend payable Dr $104,000

Cash Cr. $104,000

Retained earnings Dr $100,100

Common dividends payable Cr $100,100

Common dividends payable Dr $100,100

Cash Cr $100,100

Retained earnings Dr $110,000

Common dividends payable Cr $110,000

Working

Dividends payable

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= $104,000

Common dividend payable

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= $100,100

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Assoli18 [71]
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3 years ago
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