Answer:
a. Increase in Net Exports, Increase in AD, real GDP will stay same
b. Excess Demand
c. Appropriate Contractionary Fiscal Policy : decrease tax & or increase government expenditure
d. Actions smooth business cycle by brining actual real GDP towards full employment
Explanation:
Aggregate Demand is the total value of goods & services all the sectors of an economy are planning to buy during a given period of time
Aggregate Demand [AD] = Consumption [C] + Investment [I] + Government Expenditure [G] + Net Exports [NX = Exports (X) - Imports (M)]
Aggregate Demand > Aggregate Supply at full employment level is Excess Demand. Aggregate Demand < Aggregate Supply at full employment level is Deficit Demand
Decrease in Investment leads to fall in Aggregate Demand. It creates Deficit Demand & decreases real GDP. It can be corrected through demand expansionary fiscal policy of decreasing taxes & increasing govt. expenditure.
Increase in exports leads to increase in net exports & in turn increase in aggregate demand. This causes Excess demand problem & real GDP will remain same (economy already at full equilibrium, GDP cant be increased more). Appropriate Fiscal Policy [Contractionary Fiscal Policy] includes decreasing taxes & or increasing govt. purchase.
These actions will smooth out business cycle by bringing actual real GDP back to full employment level.
Answer:
The correct answer is option B.
Explanation:
This downward fluctuation in the economy of Georgiania is an example of a Recession. Recession can be defined as a downward movement in the economic activities which continues for a long period.
Recession causes a decline in aggregate demand and consumption. It reduces investment and production. This further causes widespread unemployment in the economy.
For instance in Georgiania, an embargo on tea caused a reduction in net exports. This caused a leftward shift in the aggregate demand curve. This caused consumption and income to decline. This will further cause a reduction in confidence.
As demand falls investment will decline as well causing unemployment. With the reduction in employment, income will also fall causing a further reduction in demand.
Expansionary monetary and fiscal policies are required to tackle the recession.
Answer:
Occurs when a company issues bonds with a contract rate less than the market rate.
Explanation:
As we know that
The premium on bond payable arise when the company issued the amount more than the face value amount this result in high interest rate as compared with the market interest rate
While on the other hand, the discount on note payable arise when the issued amount is less than the face value that results in low interest rate as compared with the market interest rate
Hence, the first option is correct
Answer:
$174,240
Explanation:
Beginning inventory = $162,700
Purchases = $458,700
Sales revenue = $638,800
Cost of goods sold = sales × ( 1 - Gross profit )
= sales × ( 1 - Gross profit )
= $638,800 × ( 1 - 0.30 )
= $638,800 × 0.70
= $447,160
Now,
Estimated ending inventory destroyed in fire
= Beginning inventory + purchases - Cost of goods sold
= $162,700 + $458,700 - $447,160
= $174,240