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3 years ago

How free maket economy operates

Business

1 answer:

Leokris [45]3 years ago

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In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.

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In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases,

nordsb [41]

Answer:

Option A is correct.

deficit; negative

Explanation:

In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade deficit and negaive net capital outflow.

This corresponds to the concept of twin deficits where a budget deficit that results from increased government purchases, also results in current account deficit. Since trade deficit implies negative NX there is a negative NCO.

6 0

2 years ago

The buck store is considering a project that will require additional inventory of 216,000 and will increase accounts payable by

Sergeu [11.5K]

Answer:

a. -$82,250

Explanation:

Calculation for what is the projects initial cash

flow for net working capital

Initial cash flow=-$216,000 + $181,000 - ($525,000 *0.09)

Initial cash flow=-$216,000 + $181,000 - $47,250

Initial cash flow = - $82,250

Therefore the projects initial cash

flow for net working capital will be - $82,250

8 0

2 years ago

Organizations created to collect and distribute contributions to political campaigns are referred to as

tangare [24]

These organizations are called Political Action Committees.

6 0

3 years ago

Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year as shown here.

Alexandra [31]

Answer:

Required 1.

Break even point (dollar sales) = $750,000

Required 2.

Break even point (dollar sales) = $1,250,000

Required 3.

ASTRO COMPANY

Forecasted Contribution Margin Income Statement

For Year Ended December 31, 2016

Sales $ 1,000,000

Variable costs ($ 400,000 )

Contribution margin $ 600,000

Fixed costs ($ 450,000 )

Net loss $ 150,000

Required 4.

Sales to meet target profit (dollar sales) = $1,833,333

Sales to meet target profit (unit sales) = 73,334

Explanation:

Break even point is the level of activity where a Company neither makes a profit nor a loss.

Break even point (dollar sales) = Fixed Cost / Contribution Margin Ratio

Where,

Contribution Margin Ratio = Contribution / Sales

= $ 200,000 / $ 1,000,000

= 0.20

Therefore,

Break even point (dollar sales) = $250,000 / 0.20

= $1,250,000

Assuming the machine is installed

Contribution Margin Ratio = ($ 1,000,000 - $400,000) / $ 1,000,000

= $600,000 / $1,000,000

= 0.60

Therefore,

Break even point (dollar sales) = ($250,000 + $200,000) / 0.60

= $750,000

Sales to meet target profit of $200,000

Sales to meet target profit (dollar sales) = Fixed Cost + Target Profit / Contribution Margin Ratio

= ($450,000 + $200,000) / 0.60

= $1,833,333

Sales to meet target profit (unit sales) = $1,833,333 / $25

= 73,334

4 0

3 years ago

Vito borrows $150,000 from Workers & Farmers Bank to buy a home. If he fails to make payments on the mortgage, the bank has

mariarad [96]

Answer: Option C

Explanation: Foreclosure is something that occurs if the mortgage is not paid by a borrower. In fact, it is a judicial process through which the person relinquishes all ownership rights.

If the owner is unable to settle off the outstanding loans or sell property through a short sale, then the estate will go to an exchange for foreclosure. If the estate does not sell then, it will be taken over by the lender.

When a lender loans you money without any collateral (credit card debt, for instance), it can take you to court for failure to pay, but it can be very hard to collect money from you.

Lenders often sell this sort of debt to outside collection agencies for pennies on the dollar and write off the loss. This is considered an “unsecured loan.”

5 0

3 years ago