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WINSTONCH [101]
3 years ago
7

Suppose the governments of two different economies, economy A and economy B, implement a permanent tax cut of the same size. Inv

estment spending in economy A is more sensitive to changes in the interest rate than investment spending in economy B. The economies are identical in all other respects. The tax cut will have a smaller impact on aggregate demand in the economy with the
Business
1 answer:
timama [110]3 years ago
8 0

Available Options Are:

a) higher sensitivity to changes in the interest rate, or

b) lower sensitivity to changes in the interest rate

Answer:

Option A. Higher sensitivity to changes in the interest rate

Explanation:

The reason is that the tax cut will encourage foreign investment and this increase in Foreign Investment will increase the GDP but by small amount. However, the higher interest rate in an economy always raises additional money in an economy which companies invest to purchase the new GDP. Thus the GDP growth is highly sensitive to changes in interest rate.

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For the quarter ended March 31, 2017, Croix Company accumulates the following sales data for its newest guitar, The Edge: $316,7
erastovalidia [21]

Answer:

Explanation:

The preparation of ta static budget report for the second quarter is shown below:

                                          CROIX COMPANY

                                         Sales Budget Report

                             For the Quarter Ended June 30, 2017

                       Second Quarter                      Year to date

Product Line  Budget  Actual  Difference  Budget  Actual  Difference

New Guitar $383,500  $387,400 $3,900    $700,200 $690,500  $9,700

                                                      Favorable                             Unfavorable

The year to date balances are computed below:

For Budget:

= $383,500 + $316,700

= $700,200

For Actual:

= $387,400 + $690,500

= 690,500

6 0
3 years ago
Suppose the monopolist is thinking about charging men a 10% higher price. if the monopolist does so, the quantity demanded by me
vovikov84 [41]
It would not fall at all. Monopolists own the entire industry meaning the consumers have no alternatives. If they have no alternative they have no choice but to buy even if the price increases
5 0
3 years ago
Tolino Company signed a 5-year note payable on January 1, 2019, of $200,000. The note requires annual principal payments each De
konstantin123 [22]

The following journal entry will be passed in the books of accounts and the interest expense is calculated to an amount of $9600

<u>Explanation:</u>

Given data:

amount of note: $200000, annual principal payments to be made each year at December 31st = $40000, interest amount to be charged = 6 percent, duration of note = 5 years

the following calculation is made in order to find out the amount of interest:

Amount of note minus principal payment multiply with rate of interest

now, putting the figures in formula:

interest = 200000 minus 40000 = $160000 multiply with .06 = $9600

Thus, the interest amount = $9600

The interest expense will be debited with an amount of $9600 in the books of accounts.

8 0
3 years ago
Bancorp changes its interest rates for consumer loans on houses and cars based on changes made by the federal reserve​ (the fed)
Elenna [48]
<span>economics. This is the correct answer because economics deals with how money and interest rates are tied to political, social, and corporate decisions. In this situation interest rates (money) of cars are houses are influenced by the fed (the government) which explains why this is an economics question.</span>
6 0
3 years ago
Under a flexible-price monetary approach to the exchange rate Group of answer choices when the domestic money supply falls, the
Anastaziya [24]

Answer:

when the domestic money supply falls, the price level would eventually fall, keeping the interest rate constant.

Explanation:

Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services.

In sales and marketing, pricing of products is considered to be an essential element of a business firm's marketing mix because place, promotion and product largely depends on it.

The flexible-price monetary model was developed by Frenkel and Mussa in 1976 and it states that the prices of goods are flexible while the purchasing power parity (PPP) is always constant.

Under a flexible-price monetary approach to the exchange rate when the domestic money supply falls, the price level would eventually fall, keeping the interest rate constant.

6 0
2 years ago
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