Answer: b. The instrument is correlated with x1.
d. The instrument does not directly influence y, except through x1.
Explanation:
Based on the information given in the question, the necessary characteristics of a suitable instrument include:
• The instrument is correlated with x1.
• The instrument does not directly influence y, except through x1.
Some of the criteria for an instrument variable are the fact that it should have a causal effect on independent variable and also the dependent variable isn't directly affected except through the independent variable which is x1 in this scenario.
Therefore, the correct option are B and D.
This is true. A decision made at work typically has an obvious answer.
Answer:
Even when competitive firms are unable to calculate marginal revenue product directly, <u>competition in the labor market</u> will push wage rates toward the marginal revenue product of labor.
Explanation:
The labor market is made up of employers seeking for labor and employees offering their labor services. The law of supply and demand also applies to this market, when more employers are seeking employees, the price (= salary) will increase.
For example, if many companies are making a profit and they need more labor, the salaries will rise because the demand is rising.
Also the suppliers, the potential employees, compete against each other for the best possible jobs.
Answer:
Journal entry to eliminate Sale to Peter Company
Debit : Sales Revenue (Sally Company ) $50,000
Credit : Cost of Sales (Peter Company) $50,000
Explanation:
Peter Company and Sally Company are in a group and Peter Company is the Parent whilst Sally Company is the subsidiary.
For 2019 Eliminate an Intragroup Transactions that occur between Peter Company and Sally Company.
Answer:
a. 24%
b. 12%
Explanation:
Marginal tax rate is an incremental tax rate that is paid out of the taxable income of a tax payer. It represents the rate at which the last unit of dollar of the taxable income is taxed. The marginal rate for each income bracket is supplied by the Internal Revenue Service (IRS).
Chuck Marginal Tax Rate
a) The marginal tax rate for Chuck if he earns additional $40,000 taxable income will be:
= $75,000 + $40,000
= $115,000
Marginal tax rate for $115,000 is 24% according IRS tax rate schedule.
b) If instead, it is an additional deduction of $40,0000, the marginal tax rate will be:
= $75,000 - $40,000
= $35,000
The marginal tax rate for taxable income of $35,000 is 12% according US tax rate schedule.
Note: the interest is categorized as interest from municipal bond, so it is tax free.
It is also assumed that Chuck is single. Hence, tax rate under single filer applies to him.
