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pashok25 [27]
3 years ago
7

Economic models often: vary greatly in assumptions and simplifications. are correct. provide similar answers. fail to explain an

y of the real-life scenarios they are supposed to help solve.
Business
1 answer:
polet [3.4K]3 years ago
7 0

Answer:

Economic models often vary greatly in assumptions and simplifications.

Explanation:

Most models in Classical Economics are based on a lot of generalizations and simplifications, that intend to model the behavior of the situations of the real world but often fail to encompass all the intricacies and complications that even most straightforward situations present. These simplifications help the Economists figure out the mathematical laws that are governing the real world economic systems. Therefore making the economic modeling a simpler process.

Classic economics implies three basic assumptions:

1- People behave rationally in any situation.

2- Firms and individual want to maximize profit and utility

3- People act independently based on available information.

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If the U.S. economy is producing at a level that is substantially less than potential GDP and the government's budget deficits a
diamong [38]

Answer:

an inflationary increase in the price level.

Explanation:

Monetary policy can be defined as the actions (macroeconomic policies) adopted and undertaken by the central bank of a particular country to control the money supply and interest rates so as to boost or enhance economic growth. The central bank uses monetary policies to manage inflation, economic growth through long-term interest rates and level of unemployment in a country.

In order to boost economic growth, a monetary policy is implemented to increase money supply (liquidity). Also, it is used to prevent inflation by reducing money supply.

An inflationary gap, also referred to as an expansionary gap in economics, is typically used for measuring the difference between the gross domestic product (GDP) and the current level of Real Gross Domestic Products that exists when a country's economy is gauged at a full employment rate. Consequently, this situation causes the price of goods and services to go up with a low income level among the people living in the country.

A budget deficit is the amount by which spending exceeds income.

All other factors held constant or all things being equal (ceteris paribus), an increase in government's budget deficit drives the interest rate up.

Generally, when there's a deficit in government budget, they resort to issuing more bonds or borrowing money from creditors. These creditors are likely to be sceptical about the government's ability to repay the debt and as such would increase the interest rate.

Hence, an inflationary increase in the price level of goods and services is not much of a danger if the U.S. economy is producing at a level that is substantially less than potential gross domestic product (GDP) and the aggregate demand is being increased by government's budget deficits.

3 0
3 years ago
The world-famous discounter, Fernwood Booksellers, specializes in selling paperbacks for $7 each. The variable cost per book is
Ghella [55]

Answer:

Advertising= $933,333

Explanation:

Giving the following information:

The world-famous discounter, Fernwood Booksellers, specializes in selling paperbacks for $7 each. The variable cost per book is $5. At current annual sales of 200,000 books, the publisher is just breaking even. It is estimated that if the authors' royalties are reduced, the variable cost per book will drop by $1.

First, we need to calculate the fixed costs:

Break-even point (units)= fixed costs/ contribution margin

200,000=  fixed costs/ (7 - 5)

200,000= fixed costs/ 2

fixed costs= $400,000

Now, we need to calculate the new break-even point in dollars and units:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 400,000 / (6/7)= $466,666.67

Break-even point (units)= fixed costs/ contribution margin

Break-even point (units)= 400,000/6= 66,667 books

Total cost= 400,000 + $66,667= $466,667

Current income= 200,000*7= $1,400,000

Advertising= 1,400,000 - 466,667= $933,333

4 0
3 years ago
The United Kingdom experienced average annual real GDP per capita growth of 2.3% between 1982 and 2009. Which of the following h
Art [367]

Answer:

False, it is not true that France had the highest level of real GDP per capita in 2019. There were other economies which performed better than France.

The correct option is Privatization of previously nationalized industries because Privatization of nationalized bank contributed to UK's growth.

Explanation:

4 0
3 years ago
Why is it important for cashiers and clerks to enjoy dealing with people?
Korolek [52]

Answer:

C. -Because They are responsible for customer satisfaction

Explanation:

Every Cashier is responsible for making sure that the customer Gets what he or she needs. and ever customer should be treated fairly. Every Customer should be happy when Getting Served.

3 0
3 years ago
Bear Tracks, Inc., has current assets of $2,280, net fixed assets of $10,400, current liabilities of $1,405, and long-term debt
Vera_Pavlovna [14]

Answer: $7185

Explanation: Shareholders equity refers to the amount of funds that are collected by the company by selling their ownership rights in the market to the general investors.

As per the subject matter of accounts, every asset that is owned by an organisation is either financed by the available funds or some liability is taken to buy it. This could be illustrated as follows :-

assets =  shareholders equity + liabilities

Putting the values into equation we get :-

$2280 + $ 10,400 = $1,405 + $4090 + shareholders equity

therefore :-

shareholders equity = $7185

6 0
3 years ago
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