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Fudgin [204]
3 years ago
8

Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual con

tribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
(a) This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to ______ and the level of investment spending to _______.
(b) An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to ______ and the level of investment to _______.
(c) Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
(d) This change in spending causes the government to run a budget _______, which _______ national saving.
(e) This causes the interest rate to _______, and the level of investment spending to _______
Business
1 answer:
Ierofanga [76]3 years ago
4 0

Answer:

(a) This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to <u>DECREASE</u> and the level of investment spending to <u>INCREASE</u>.

The supply of loanable funds will increase, therefore, the equilibrium price (interest rate) will decrease.

(b) An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.

The repeal of the previously existing tax credit causes the interest rate to <u>DECREASE</u> and the level of investment to <u>DECREASE</u>.

The demand of loanable will decrease, therefore, decreasing the equilibrium price (interest rate).

(c) Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.

(d) This change in spending causes the government to run a budget <u>SURPLUS</u>, which <u>INCREASES</u> national saving.

(e) This causes the interest rate to <u>DECREASE</u>, and the level of investment spending to <u>INCREASE</u>.

Since the government has extra money, it can use it to pay existing debts or finance themselves without having to issue new debt. Since the demand for loanable funds decrease, the interest rates will fall.

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A company uses a periodic inventory system. On April 1, the company had 9 items of beginning inventory with a cost of $13 per un
____ [38]

Answer:

$190.75

Explanation:

In this question, we are asked to use weighted average method to find the cost to which the 14 units sold is closest to.

We proceed as follows;

On April one, there were 9 items in the inventory with a cost of $13 per item. The total cost here would be 13 * 9 = $117

On April 18th, we had 15 items at $14 cost per piece which gives a total of 14 * 15 = $210

On April 29, 14 units were sold. We need to find the cost to which this was closest using the weighted cost approach.

The total costs for April 1 and 18 would be $117+ $210 = $327

The weighted average cost per unit on both dates is $327/24 = $13.625

The cost of 14 units sold would be = 14 * $13.625 = $190.75

8 0
3 years ago
Read 2 more answers
Fahad works for a company that markets all of Celextron's products. Fahad's company acts as the marketing department for Celextr
Whitepunk [10]

Answer:

D) selling agent.

Explanation:

Sine Fahad's company never obtains title for the goods that they sell, they are acting like a selling agent. They are very similar to a commission merchant except that Fahad's company is also responsible for the marketing functions of Celextron.

There are several types of sales agents and distributors, it all depends on certain details about how they work:

  • a manufacturer's agent work directly for the manufacturing firm, in this case it would have been Celextron.
  • a sales branch is a company owned by Celextron.
  • a full service wholesaler obtains title of the goods.

5 0
3 years ago
Refurbish, Inc. bought 1,000 shares of its own stock at $8 a share. Later, it reissued the shares for $10,000. The effect of the
IRINA_888 [86]

Answer:

$10,000 increase in stockholder equity

Explanation:

The buying of treasury stock reduces the balance of stockholder equity but when the treasury stock is reissued or we can say after purchase, the sale of treasury stock is done for $10,000. So, it increases the balance of  stockholder equity

It means that the purchase of treasury stock has an adverse impact on stockholder equity whereas reissued shares have a positive impact on stockholder equity

7 0
3 years ago
You normally stay at home on Wednesday nights and study. However, next Wednesday night, your best friend is having his big 21st
nalin [4]

Answer:

My answer would be don't go, Since we are almost in the red positive for Corona, U might have a chance of catching it from her or the people at her party. On the other hand, u can do a virtual party over the phone/laptop. I understand it's difficult to avoid your bestfriend because of Corona, but technically it's for your own good. If it makes you feel better, I had to miss my Bestfriend B-Day because I was scared to get Corona.

Explanation:

4 0
3 years ago
Read 2 more answers
Jason rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $
melisa1 [442]

Answer:

D) 1,500

Explanation:

rent per room =$100 dollars

variable cost= $ 20 dollars

fixed cost =$ 100,000.00

desired profits=$ 20,000.00

volume(V) to meet profit target;

Contribution margin per sale= $100-$20= $80

Profits = revenue-cost

=$20,000= Vx$80-$100,000

=20,000=v80-100000

   v80=100,000.00+20,000

    v80=120,000

         v=  120,000/80

Volume =1,500

 

8 0
3 years ago
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