Answer: b. both government spending changes and tax changes
Explanation:
The Multiplier effect as described in the question applies when the Government uses either taxes of Government Spending to influence the economy. When Taxes are imposed or relaxed however, it has been shown that they provide a less multiplier effect than when the Government uses Spending as an influence.
This is because when the Government spends it leads to a ripple effect that creates more income but when taxes are cut and people have <em>more disposable income</em>, it is up to them how much of that to save and how much to spend and they usually do not spend all of it.
Answer: public goods and common resources
Explanation:
Externality is the consequence of a producer's or consumer's action on a third party which did not partake in the action.
The idea that externalities arise because something that is valuable has no price attached is associated with the public goods and the common resources. The provision of public goods such as good roads, defence will lead to positive externalities, while the use of common resources such as fish in the river or the environment will lead to negative externalities e.g polluting the environment will give rise to a negative effect on a third party.
Answer:
(D) Cost
Explanation:
Due to change in economy overtime it is not easy to predict the cost of a long term project. Also different states and or countries have different inflation rates, therefore it is not easy for the committee that will spend a decade travelling the world to balance performance in the are of cost. Long term budget needs to be flexible to cover increase and decrease in the economy.
Answer:
$84
Explanation:
Calculation to determine the inventory cost per unit using absorption costing
Direct materials $18
Indirect materials (variable) $3
Direct labor $9
Indirect labor (variable) $7
Other variable factory overhead $13
Fixed factory overhead $34
Inventory cost per unit $84
($18 + $3 + $9 + $7 + $13 + $34 = $84
Therefore the inventory cost per unit using absorption costing is $84
Answer:
5.38% and 5.1%
Explanation:
In this question, we are asked to calculate the after tax return to the corporation and the after tax return to the investor.
What is meant by after tax return is simply the profit made after we subtract the amount of taxes. It is simply revenue less the amount of tax paid.
We calculate the values as follows:
For the corporation;
The after tax return can be calculated by the following mathematical expression;
After tax return to Corporation = 0.06 - (0.06 * 0.3) * 0.34 = 0.0538 = 5.38/100 which is same as 5.38%.
After tax return to the individual investor = 0.06(1-0.15) = 0.06 * 0.85 = 0.051 or just 5.1%
