Answer:
The correct answer is D. People might withdraw money from interest-bearing accounts, making the interest rate rise, if there is a shortage in the money market.
Explanation:
In case of a shortage of money in the economy, where people who need to consume and produce do not have immediate liquid money to carry out their economic activities, individuals will withdraw the money invested in their accounts to have cash to cover their immediate needs. Thus, the level of money in circulation will increase, but at the same time the liquidity of investment accounts will fall, with which banks will tend to raise interest rates to recover investors and therefore cover the losses in their accounts.
Answer:
Walter's recognized gain is $2,000
Explanation:
Walter's gain/loss = cash distribution - basis in the partnership = $18,000 - $16,000 = $2,000
A partner (Walter) does not have to recognize income on a non-liquidating partnership distribution of property other than money. This land distribution must be treated as a sale and recorded at fair market value.
Answer:
Casey would prefer option 1; that he pays the premiums ($8,000). Even if Casey cannot deduct his insurance premiums as medical expenses, his income will only be reduced by $8,000. If he decided to take option 2, his income would be reduced by $8,800 (= $10,000 - 12%), so he is saving $800 by taking option 1.
On the other hand, Jean would prefer option 2; that her salary is reduced by $10,000 and her employer pays the premiums. By choosing option 2, Jean is going to lose $6,500 (= $10,000 - 35%). If she chose option 1, her income would be reduced by $8,000, so she is saving $1,500 by choosing option 2.
Answer:
a) Jackie's accounting profit of just zero, her revenue have to be $5000
b) The revenue would give Jackie an economic profit of just zero is $67,000
Explanation:
a) $5,000 is the only cost that would have to add to the accounting profit calculation, which is the cost of upgrading her computer equipment every year as she runs the business out of a room in her home. For her accounting profit to be just equal to zero, her total revenue would have to be $5,000 to meet the requirement.
b) Total revenue is $67,000, which includes the cost of equipment upgrade, the opportunity cost of not renting out the room, and the opportunity cost of Jackie’s time. All the costs that will add to the calculation for the economic profit of the company. Jackie’s total revenue would have to be $67,000 to be just zero to meet the requirement.
Answer:
c. lower the price of that item
Explanation:
If the revenues from a product begin to fall, most probably the product is entering the decline stage of its product cycle. In the initial stages of the decline stage, sales begin to drop.
When sales begin to drop, producers implement strategies to try and keep the product in the market for a longer time. One of the ways of maintaining sales is to offer reduced prices. A producer cuts prices to woe customers to continue buying the product.
