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schepotkina [342]
3 years ago
14

Consider a business cycle theory that combines the classical âIS-LM model with the assumption that temporary changes in governme

nt purchases are the main source of cyclical fluctuations. According to thisâ theory, what happens after a temporary increase in government purchases to each of the followingâ variables?
a. Employment
b. The real wage
c. Average labor productivity
d. Investment
e. The price level
Business
1 answer:
docker41 [41]3 years ago
5 0

Answer: The answer is given below

Explanation:

The IS-LM model, simply is an acronym which represents "investment-savings" and the "liquidity preference of money supply". The model indicates the interaction between market for economic goods and the loanable funds market which is also called the money market.

The variables are explained below:

a. Employment: A rise in the spending expenditure will result into an increase in the current or future taxes which will have an effect on the workers by making them poorer and therefore making them offer their services to the labor market. This will lead to a rise in labor supply.

b. The real wage: Due to the increase in labor supply, the real wage will reduce because the supply of labor will be more than the demand.

c. Average labor productivity: The marginal productivity of labor or production function is not influenced by fiscal policy changes.

d. Investment: There will be a leftward upward shift of the LM curve. Due to increase in price of goods and services, and the fall in real money supply, the interest rate will rise therefore making investment to reduce.

e. The price level: Demand for output is more than the full employment level of output. This will bring about increase in price.

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Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years o
Gre4nikov [31]

<u>Solution and Explanation:</u>

1 Breakeven point = Fixed cost/contribution per unit  

480000+360000 /(57-43)= 60000 Units

2. a  

                                                year 1        year 2           year 3

unit product cost                               41                    41                      41  

Direct material                              25  

Direct Labour                                       12  

Variable manufactoring overhead 4  

Variable costing unit product cost 41  

2. b <u> Variable expenses</u>    

Variable cost of goods sold      24,60,000        30,75,000      16,40,000  

Variable selling and administrative  1,20,000   1,50,000        80,000  

Total variable expenses         25,80,000   32,25,000        17,20,000  

Contributon margin                  8,40,000 -3,75,000 19,85,000  

Fixed expenses    

Fixed manufactoring overhead  4,80,000       4,80,000       4,80,000  

Fixed selling and administrative 3,60,000      3,60,000       3,60,000

Total Fixed Expenses                 8,40,000       8,40,000       8,40,000  

Net operating income                                       -12,15,000  11,45,000 Note                                            Year 1            year 2            year 3

Unit sold                                               60000      50000          65000  

Unit price                                         57                   57                  57  Sales                                            3420000 2850000 3705000  

Variable cost of goods sold    

Unit                                                          60000     75000         40000  

Unit cost                                                          41              41    41  

Total                                              2460000 3075000 1640000  Variable selling and administrative    

Unit                                                               60000 75000 40000  

Unit cost                                                                   2      2                2  Total                                                          120000 150000 80000

3      

a unit product cost                    year 1 year 2 year 3  

         Direct material                                           25              25      25  

Direct Labour                                                      12       12     12  

Variable manufactoring overhead              4                 4        4  

Fixed manufactoring over head                       8          6.4        12  

Variable costing unit product cost                  49           47.4 53  

Note    

Fixed manufactoring over head    

480000 divided by 60000                                       8.00    

480000 divided by75000                                       6.40    

480000 divided by 40000                                     12.00    

<u>b Hass company</u>    

Absorbtion costing income statement    

          Year 1                         year 2             year 3

Sales                            34,20,000        28,50,000        37,05,000  Cost of goods sold      29,40,000        23,70,000        33,05,000  Gross margin                      4,80,000           4,80,000           4,00,000  selling and admin exp       4,80,000           4,60,000           4,90,000  Net operating income               -                20,000             -90,000  Note    

Cost of goods sold    

Year 1 60000 multiply with 49 = 2940000  

Year 2 50000 multiply with47.4=  2370000  

Year 3 25000 * 47.4+40000 * 53=  3305000  

selling and administrative expenses    

Year 1 60000 * 2+360000 = 480000  

Year 2 50000 * 2+360000 = 460000  

Year 3 65000 * 2+360000 = 490000  

     

     

4 0
3 years ago
"Profit-sharing plans provide a more direct incentive in small firms than in large firms. are practically impossible to use succ
dusya [7]

Answer:

Provides a more direct incentive in small firms than in large firms.

Explanation:

Profit sharing plan can be defined as a contribution plan in which the management of a company shares part of its profit with the employees. This could motivate and inspire the employees to work efficiently towards the growth of the organisation.

Profit sharing plan gives the employees a sense of ownership, this would inspire them to work harder to ensure the success of the organisation.

7 0
3 years ago
Read 2 more answers
​Rachel's Beach Shoppe charges tourists to use their credit cards to purchase merchandise at the vacation store. On​ Monday, Rac
olga2289 [7]

Answer:

$1,479

Explanation:

For computing the total deposit, first we have to determine the bank charges which is shown below:

= Merchandise sold × bank charges rate

= $1,500 × 1.4%

= 21

Now the total amount deposited would be

= Merchandise sold - bank charges

= $1,500 - $21

= $1,479

Simply we deduct the bank charges from the Merchandise sold so that the correct amount can come.

5 0
3 years ago
Which of the following is a typical current liability?
Anestetic [448]

Answer: Option B

                 

Explanation: In simple words, current liabilities refers to the obligations and promises that an entity has to pay within a year. These liabilities usually arise due to the need of an organisation to fulfill their short term requirements to operate the business efficiently.

These liabilities are of critical in nature as they directly affects the liquidity of the business. In the given case, sales tax payable is the only obligation that must be fulfilled with a year. Hence it is a current liability.

6 0
3 years ago
Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. Indicate whether the
Ann [662]

Answer:

a. Capitalized : Equipment

b. Expensed

c. Capitalized : Building

d. Expensed

e. Capitalized : Equipment

f.  Capitalized : Building

g. Capitalized : Building

h. Capitalized : Equipment

Explanation:

The Cost of Property, Plant and Equipment item according to IAS 16 includes, the Purchase Cost and any cost directly incurred in putting the assets in location and condition intended for use by management.

The costs exclude amounts collected in tax on behalf of third parties

Also not Capital expenditures increase the earning ability of the asset whilst  revenue expenditure is the maintenance of such asset.

6 0
3 years ago
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