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Anna71 [15]
3 years ago
10

Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy

to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?
Business
1 answer:
Stels [109]3 years ago
8 0

Answer:

The Earned Income credit

Explanation:

Many economists choose the earned income credit (EIC) over the increase in minimum wage because it avoids deadweight losses. Deadweight losses results when supply are demand are not in equilibrium (Market Inefficiency). Increases in minimum wages invariably leads to increase in prices of market goods which are overpriced. This leads to market Inefficiency.

So in trying to help low income earners, many economists choose the EIC over just increasing minimum wage.

The earned Income Credit helps certain tax payers with low incomes from work in a particular tax year. It reduces the amount of tax owed and may result in a refund to the tax payers if the amount of credit is greater than the amount of tax owed.

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You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account an
Nikolay [14]

Answer:

Ans. Assuming that the withdrawal period is 300 months (25 years), you can withdraw every month $15,547.96

Explanation:

Hi, first, we have to take to future value (30 years in the future) the invested capital (both the stock account and the bond account). From there, we will consider the sum of both future values as the present value of the annuity that you are about to receive for the next 25 years (300 months). But before we do all that, we need to convert the return rates (compounded monthly) into effective monthly rates, for that we just go ahead and divide each one by 12, as follows

r(Stock) = 0.105/12= 0.00875

r(Bond)= 0.061/12 = 0.00508

r(Combined Account)= 0.069/12=0.00575

Now we are ready, first, let´s find the future value of the stock account.

FV(stock)=\frac{750((1+0.00875)^{360}-1) }{0.00875} =1,887,300.74}

Now, let´s find out how much will it be in 30 years, investing $325 per month, at the end of the month, at 0.508% effective monthly.

FV(Bond)=\frac{325((1+0.00508)^{360}-1) }{0.00508} =332,526.95

And then we add them up and we get:

FV(stock)+FV(bond)=1,887,300.74+332,526.95=2,219,827.69

Ok, now let´s find the annuity (monthly withdraw) taking into account that we are going to make 300 withdraws at a rate of 0.575% effective monthly,

[tex]2,219,827.69=A(142.7729593)

\frac{2,219,827.69}{142.7729593} =A

A=15,547.96\frac{A((1+0.00575)^{300}-1) }{0.00575(1+0.00575)^{300} }[/tex]

Best of luck.

5 0
3 years ago
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $70. Limit Buy
harkovskaia [24]

Answer:

<u><em>$69.80</em></u>

Explanation:

Note, a market order is an order designed to execute an order immediately by <em>matching the best available price</em> on the sell order list.

When we look carefully at the sell order book, we observe that the only sell order containing the specified quantity of 120 units of shares at a price close to the market price is <u>$69.80.</u> Even though there are other cheaper orders are available, their order quantity does <em>not </em>match the market buy order for the 120 shares and thus would not be filled.

7 0
3 years ago
At the end of the fiscal year, the usual adjusting entry to update Prepaid Rent for the portion of the benefit that was used up
TEA [102]

Answer:

d. net income for the year will be overstated.

Explanation:

The prepaid rent account is used to record the amount paid in advance for rent. Once the amount is paid, the entries required are

Debit Prepaid rent

Credit Cash account

On subsequent use of the rent, the required entries are

Debit Rent expense

Credit Prepaid rent

As such where at the end of the fiscal year, the usual adjusting entry to update Prepaid Rent for the portion of the benefit that was used up / expired was accidentally omitted, net income for the year will be overstated as the rent expense that would have been posted to reduce it would have been omitted.

6 0
3 years ago
When we say that a firm is a price taker, we are indicating that the Group of answer choices firm takes the price established in
Zina [86]

Answer:

firm can change output levels without having any significant effect on price.

Explanation:

In the case when we say that the firm is a price taker that means the firm has the power to change the level of an output but this does not have any kind of impact on the price. They accepted the price for the prevailing market and each unit could be sold at the similar market price. It could impact the market price also they enjoy the pricing power

Therefore the above statement should be considered

5 0
3 years ago
According to rational expectations, stock prices are actually... a. the discounted value of all future cash flows associated wit
Stells [14]

Answer:

a. the discounted value of all future cash flows associated with the stock.

Explanation:

Stock prices can be seen as an estimated future value of the security. When investors buy shares they look at the performance of the business and buy shares based on this future analysis.

Also the issuer values the shares based on their future forecast of financial performance. For example when a share is issued for $1,000,000 the business would have estimated performance will justify the share price in the future.

7 0
4 years ago
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