Answer:
A) Does not change the money supply.
Explanation:
Demand deposits change the monetary base, because the monetary base equals currency plus demand deposits.
However, in itself, a demand deposit does not change the money supply. For the change in the money supply to occur, the bank must loan out some of the money in the deposit.
Answer:
B. Cost of goods sold will be too low by $5,000.
Explanation:
Overstatement in closing inventory has two effects. First in income statement, that the cost of goods sold is decreased by the same amount that is overstated. Second is overstatement of Inventory value in the asset section of balance sheet. According to the given scenario The effect of this event should be as cost of goods sold will be too low by $5,000.
Answer:
Incremental cost= $61,875
Explanation:
Giving the following information:
Gelb Company currently manufactures 49,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $75,000 per year, and allocated fixed costs are $70,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit
We need to determine whether it is more convenient to produce the component or outsource it. We will only consider the relevant costs, therefore the fixed costs will not be taken into account.
Make in house:
Cost= 49,500*5.15= $254,925
Buy:
Cost= 49,500*3.90= $193,050
Incremental cost= 254,925 - 193,050= $61,875
Answer:
The correct answer is What Goods and Services should be produced.
Explanation:
The problem ‘what to produce’ can be divided into two related questions. First, which goods are to be produced and which not; and second, in what quantities those goods, which the economy has decided to produce, are to be produced. If productive resources were unlimited we could produce as many numbers of goods as we liked and, therefore, the question “What goods to be produced and what not” would not have arisen. But because resources are in fact scarce relative to human wants, an economy must choose among different alternative collections of goods and services that it should produce.
If the Society decides to produce particular goods in a larger quantity, it will have to withdraw resources from the production of some other goods. Further, an economy has to decide how much resources should be allocated for the production of consumer goods and how much for capital goods. In other words, an economy has to decide the respective quantities of consumer goods and capital goods to be produced.
The choice between consumer goods and capital goods involves the choice between the present and the future. If the society decides to produce more capital goods, some resources will have to be taken away from the production of consumer goods and. therefore, the production of consumer goods would have to be cut down. But greater amount of capital goods would make possible the production of larger quantities of consumer goods in the future. Thus, we see that some current consumption has to be sacrificed for the sake of more consumption in the future.
The answer for this statement is TRUE
