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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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Answer:

See explanation section

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To record the journal entry to write off the uncollectible account according to the direct write-off method, we have to use bad dad expanse instead of an allowance account.

December 31         Bad Debt Expense           Debit     $1,200

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According to research on marital satisfaction in couples with children, the shape of the marital satisfaction curve across time
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Increasing then decreasing.
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For each hypothetical scenario, indicate whether the tariff described is more likely a protective tariff or a revenue tariff.
LenaWriter [7]

Answer:

a. In response to concerns from business leaders, a legislator has designed a new tariff on raw materials used by many manufacturing firms. The legislator felt the new tariff was necessary based on input from the private sector that new discoveries of natural resources abroad would threaten to put domestic producers of raw materials out of business. To meet this goal, this tariff will charge $1,500 on every crate of the imported goods plus an additional 6% of the total value of the imported goods.

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b. In an effort to balance next year's budget, a senator has proposed a new tariff. She proposed the new tariff with a goal of raising a total of $100 million, To meet this goal, this tariff will charge $2,000 on every ton that is imported.

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3 years ago
Your grandmother recently surprised you and gave you $15,000 expressly for the purpose of starting your retirement savings. Her
qaws [65]

Answer:

A. $115,291.30

B. $421,536.55

C. $1,471,502.67

Explanation:

The expression that describes the final amount of a $15,000 investment compounded annually for 35 years is:

A = \$15,000*(1+i)^{35}

A. 6% per year

i = 0.06

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B. 10% per year

i = 0.10

A = \$15,000*(1+0.10)^{35}\\A = \$421,536.55

C. 14% per year

i = 0.14

A = \$15,000*(1+0.14)^{35}\\A = \$1,471,502.67

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