All categories

3 years ago

During a severe recession Congress passes legislation to cut taxes, this would be an example of a(n): g

Business

1 answer:

Doss [256]3 years ago

5 0

Answer:

expansionary fiscal policy.

Explanation:

Fiscal policy in economics refers to the use of government expenditures (spending) and revenues (taxation) in order to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.

A fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.

Basically, an expansionary fiscal policy will cause the total increase in aggregate demand to be greater than the initial increase in aggregate demand due to the multiplier process.

Hence, if during a severe recession, Congress passes legislation to cut taxes, this would be an example of an expansionary fiscal policy.

According to the Keynesian theory, government spending or expenditures should be increased and taxes should be lowered when faced with a recession, in order to create employment and boost the buying power of consumers.

You might be interested in

Wallen Corporation is considering eliminating a department that has an annual contribution margin of $80,000 and $160,000 in ann

krok68 [10]

Answer:

$10,000

Explanation:

We need to find the segment margin of the deparment, which is equal to annual contribution margin minus avoidable fixed costs:

Wallen Corporation

Annual contribution margin $80,000

Annual fixed costs $160,000

Unavoidable fixed costs $90,000

Avoidable fixed costs $70,000

Segment Margin = Annual contribution margin - avoidable fixed costs

= $80,000 - $70,000

= $10,000

Therefore, if the company eliminated this department, it would have a financial advantage of $10,000, equivalent to the deparment's current segment margin.

5 0

3 years ago

The northern vision of the Reconstruction-era southern economy included all of the following EXCEPT:

IceJOKER [234]

Answer:

A. the labor system would be as close to slavery as possible, thereby assuring high productivity.

Explanation:

The Reconstruction - era of northern version was clearly impacted on Slavery.

As the main objective of such reconstruction was to remove slavery at maximum. And with the end of such reconstruction era there was an end to slavery.

Accordingly, new constitutional rights to people earlier under slavery were provided.

Now, therefore, statement a in the given instance which provides for close relation between labor system and slavery is incorrect.

Incorrect Statement is:

A. the labor system would be as close to slavery as possible, thereby assuring high productivity.

4 0

3 years ago

Contribution Income Statement and Cost-Volume-Profit Graph Picnic Time produces a picnic basket that is sold for $100 per unit.

Ira Lisetskai [31]

Answer:

Graph Picnic Time

Contribution Income Statement

For the Month of July

Sales $400,000

Less variable costs:

Direct materials $100,000

Direct labor 60,000

Manufacturing overhead 20,000

Selling and administrative 16,000

Total variable costs $196,000

Contribution margin $204,000

Less fixed cost:

Manufacturing overhead $36,000

Selling and administrative 68,000

Total fixed costs $104,000

Profit $100,000

Explanation:

a) Data and Calculations:

Selling price per picnic basket = $100

July Production and sales = 4,000 baskets

Variable Costs per Unit:

Manufacturing:

Direct materials $25

Direct labor 15

Manufacturing overhead 5

Total $45

Selling and administrative 4

Total $49

Fixed Costs per Month

Manufacturing overhead $36,000

Selling and administrative 68,000

Total $104,000

Contribution Income Statement

For the Month of July

Sales $400,000 ($100 * 4,000)

Less variable costs:

Direct materials $100,000 ($24 * 4,000)

Direct labor 60,000 ($15 * 4,000)

Manufacturing overhead 20,000 ($5 * 4,000)

Selling and administrative 16,000($4 * 4,000)

Total variable costs $196,000

Contribution margin $204,000

Less fixed cost:

Manufacturing overhead $36,000

Selling and administrative 68,000

Total fixed costs $104,000

Profit $100,000

8 0

3 years ago

Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $150,000 and that Greene is

Gekata [30.6K]

Answer:

1) net income = $115,000

a) Morrison receives $57,500

Greene receives $57,500

b) Morrison receives $86,250

Greene receives $28,750

c) Morrison receives $38,333

Greene receives $76,667

d) Morrison receives ($150,000 x 6%) + $51,500 = $60,500

Greene receives ($50,000 x 6%) + $51,500 = $54,500

e) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

f) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

2) net income = $200,000

a) Morrison receives $100,000

Greene receives $100,000

b) Morrison receives $150,000

Greene receives $50,000

c) Morrison receives $66,667

Greene receives $133,333

d) Morrison receives $9,000 + $94,000 = $101,000

Greene receives $3,000 + $94,000 = $97,000

e) Morrison receives $9,000 + $40,000 + $39,000 = $88,000

Greene receives $3,000 + $70,000 + $39,000 = $112,000

f) Morrison receives $9,000 + $40,000 + $30,000 = $79,000

Greene receives $3,000 + $70,000 + $18,000 + $30,000 = $121,000

8 0

3 years ago

Suppose Deborah gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend

Mashutka [201]

Answer:

Option (d) is correct.

Explanation:

Suppose Deborah gets a sales bonus at her place of work,

Disposable Income, YD = $ 600

Consumption, C = $480

Savings , S = $ 120

Marginal propensity to consumer, MPC:

= Consumption ÷ Disposable Income

= 480 ÷ 600

= 0.8

Therefore, Deborah marginal propensity to consume (MPC) is 0.80

Option (d)

7 0

4 years ago