1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Irina18 [472]
3 years ago
12

g The Ricardian equivalence states that if the government cuts taxes without changing current or future expenditure then: a) hou

seholds will consume more because the marginal propensity to consume is positive b) households will save more because they will expect higher taxes in the future c) households will consume less because they will acquire the debt issued by the government d) households will save less because the tax multiplier is bigger than 1 e) both (a) and (d) f) both (b) and (c)
Business
1 answer:
Aleks [24]3 years ago
4 0

Answer:

b) households will save more because they will expect higher taxes in the future

Explanation:

The Ricardian Equivalence proposition is one of the pillars of classical economics, which sadly has proven to not work very well in the real world. According to classical economists, and their quantity theory of money plus the Ricardian Equivalence, recessions do not exist because it is impossible for them to exist. But in the real world, that is not true. Recessions exist, e.g. the US is in a recession since the first quarter of 2020 (even before the current health crisis). When real people lose their jobs or are afraid to lose their jobs, their spending habits change.

On the other hand, when real people get a tax refund or tax cut, they generally spend it, they will not save it to pay future taxes. That is why car sales increase during February after checks form the IRS are handed out.

Theoretically, classical economics is great. The problem is that we are human beings, and as such, our behavior cannot be controlled or determined by what we should or should not do. This is exactly why the velocity of money (quantitative theory of money) is not constant.

You might be interested in
What function of money is highlighted when sally pays her cell phone bill with cash?
sineoko [7]
It is the medium of exchange. It serves as the mediator instrument used to encourage the deal, buy or exchange of products between parties. For an instrument to work as a medium of trade, it must speak to a standard of significant worth acknowledged by all gatherings. In present-day economies, the medium of trade is money.
7 0
3 years ago
QUESTION ONE (1)
ale4655 [162]

Answer:

don't know how much they were going home from my phone number is a good day of the year and I'm sorry I'm sorry I'm sorry but he did I say anything else and I'm sure it to you and I have a great day of the us to be a great day of the us and we are you ready for the first time ever you want to see you soon I don't know how much you love you all for you to be a great day of the us and we are you ready for the first time ever you ready for the first time ever you ready for the first time ever you ready for some reason to get the best way I can see you soon and I am a very happy birthday is a good day for me and my family and I have to be in my heart and soul mate and we will not let you soon and I am a very happy birthday is your answer me and my heart and soul mate and I have a good time with you and

4 0
3 years ago
A _________ is generally considered an appreciating asset because it may _________ in value over time.
jeka94

A house is generally considered an appreciating asset because it may increase in value over time. Appreciation is an increase in the value of an asset over time. The increase of the value of the house may occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. One example would be: the neighborhood became very famous, so the value of the houses there will increase, because the demand will increase.

8 0
3 years ago
Read 2 more answers
Clothing maker Patagonia states that its purpose as an organization is to "build the best product, cause no unnecessary harm, [a
jekas [21]

Answer:

The question is missing the options as given below:

A. mission statement

B. belief statement

C. goals pact

D. code of ethics

E. management pledge

The correct option is A,mission statement

Explanation:

The mission statement shows in summary form the vision,core values as well as statement of goals and objectives of an establishment.

Building the best product is the prioritized goal of Patagonia,since having the best product places it in the forefront in terms brand recognition,hence increased sales.

Core value here is ensuring no unnecessary harm is caused by  way of injuries sustained in the course of pursuing its objectives.This implies that Patagonia is responsible corporate citizen in the area of complying with  best practice in safety procedures.

The vision of the company is to implement solutions to environmental challenges through business inspiration.

7 0
3 years ago
Lancaster bakery has net fixed assets of $329,700, current assets of $87,200, a price-earnings ratio of 12.8, a debt-equity rati
Verizon [17]

Market to book ratio is the ration of market price per share divided by the book value per share, it can be mathematically expressed as below:


Market to Book Value=\frac{Market Value Per Share}{Book Value Per Share}

In this problem the first step is to find Market Value per share

PE Ratio is given by the following formula:

PE Ratio=\frac{Market Price Per Share }{Earning Per Share}

12.8=\frac{Market Price Per Share }{1.97}

Market Price Per Share=$25.216

We now find Book Value Per Share, Book Value is nothing but the Equity Value of the Organization, In the given problem, we don't have this information, but we have total assets, which amounts to $416900($329700+$87200). Using Debt Ratio we can find book value per share as below:

Lets assume Shareholders Equity is x, Thus total liability will be Total Assets-x

Debt Equity Ratio is given as below:

Debt Equity Ratio=\frac{Total Liabilities}{Equity}

0.42=\frac{416900-x}{x}

x=$293592

Book Value per share=$293592/36000

Book Value per Share=8.155

Market to book value=25.216/8.15533

Market to book value ratio= 3.09

8 0
3 years ago
Other questions:
  • The stock market is experiencing a bear market. Trading volume has been high for weeks. Even the most stable stocks are feeling
    7·1 answer
  • Emma Jones Company has the following information​ available: Account ​12/31/2019 ​12/31/2018 Accounts Payable ​$76,500 ​$80,000
    12·1 answer
  • The histogram below shows the distribution of the annual hours of commuting delay per traveler for 46 small and medium urban are
    11·1 answer
  • What are products that consumers demand less of when their income rises
    14·2 answers
  • Exercise 14-08 On January 1, 2020, Sandhill Corporation had retained earnings of $539,000. During the year, Sandhill had the fol
    8·1 answer
  • If the MPC is 0.75 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $100 bi
    15·1 answer
  • Three important forms of long-term (capital) expenditures are
    6·1 answer
  • LUVFINANCE, Inc. is estimating its WACC. The firm could sell, at par, $100 preferred stock that pays a 10 percent annual dividen
    13·1 answer
  • Budget Performance Reports for Cost Centers Partially completed budget performance reports for Delmar Company, a manufacturer of
    13·1 answer
  • Moon Company owns 56 million shares of stock as a long-term investment in Center Company and Moon does not have significant infl
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!