Cyclical deficit is the downfall of the business cycle, this usually occurs when the economy is beneath potential income. The formula for this is, CD= tax rate x ( potential deficit - actual deficit). Therefore, the cyclical deficit is $200. I hope this helps.
Answer with Explanation:
Requirement 1.
The US import will increase by $1,500,000 due to purchase of indian tea product and this import of tea would result in increase of capital outflow as the Net export particular to importation is negative hence capital outflow is genuine effect.
Requirement 2.
The Net exports can be calculated as under:
Net Exports = Exports - Imports = 0 - $1,500,000 = - $1,500,000
The US Net Exports would decrease by $1,500,000.
Answer:
Tariffs and import quotas generally reduce economic welfare.
Explanation:
The vast majority of economists (over 90% according to the University of Chicago) agree that tariffs and import quotas generally reduce economic welfare. This is perhaps the normative statement in which economists agree the most.
The reason why is because tariffs and import quotas only benefit a small fraction of domestic producers, to the dismay of a larger number of consumers who end up having to pay higher prices for consumer goods.
Answer:
Penetration pricing
Explanation:
Penetration pricing is a marketing strategy that is used to draw customers to a particular good or service by lowering its price. The reasons why companies use penetration pricing is to introduce a new product into the market by creating awareness and also to draw customers away from competitors that have their prices on the high side.
So, if we observe a decrease in price of a good & an increase in the amount of the good bought & sold this could be explained by <u>penetration pricing</u>.
The goal of this is to draw attraction from customers to the product and also keep them once the prices have been returned to their normal levels.
Answer:
c. $2,775
Explanation:
The computation of cash balance per books (before adjustments) is shown below:-
Balance per book = Balance per Bank - Notes Receivable collected by bank - Deposits in transit + Bank service charges + NSF
= $12,000 - $6,000 - $4,500 + $75 + $1,200
= $2,775
Therefore for computing the balance per book we simply applied the above formula.
