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2 years ago

Which of the following arguments are in favor of active stabilization policy by the government? Check all that apply

Business

1 answer:

irakobra [83]2 years ago

5 0

Answer:

D) Shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.

Explanation:

The Federal Reserve (FED) can respond to excessive pessimism among consumers and businesses by expanding the money supply and lowering interest rates. To deal with excessive optimism they can do the opposite, they can shrink the money supply and increase the interest rate.

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On January 1, 2021, Blair Company sold $800,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December

Anika [276]

Answer:

$42,480

Explanation:

Given that,

Value of bonds = $800,000

Interest rate = 10%

Selling price of bond (Book value) = $708,000

Priced to yield = 12%

The semi-annual yield is calculated as follows:

= 12% / 2 (because the interest is payable semiannually on June 30 and December 31)

= 6%

Therefore, the semi-annual bond interest expense:

= Selling price of bond × semi-annual yield

= $708,000 × 6%

= $42,480

Hence, the Blair should report bond interest expense for the six months ended June 30, 2021 in the amount of $42,480.

But the actual cash paid for the interest expense will be:

= (Value of bonds × Interest rate on bonds)

= [$800,000 × (10%/2)]

= $800,000 × 5%

= $40,000

So, the amortization for bond discount is the difference between actual cash paid and bond interest expense:

= $42,480 - $40,000

= $2,480

7 0

3 years ago

Assume Japan begins with its economy running at full employment. If the Japanese government increases government expenditures th

Svetllana [295]

Answer:

D) the AD curve will shift out, causing an increase in the Japanese price level, but not change in output.

Explanation:

If the government starts to increase spending, the total income will increase, shifting the AD curve outwards. Generally this situation would increase both the general price level (inflation) and total output (AS curve). But since the economy is already at full employment, real output will increase minimally (if any increase at all). The largest effect will be felt in the rise of inflation.

3 0

2 years ago

Atlas Corp. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project S ha

snow_lady [41]

Answer:

A) $56.5

Explanation:

Data:

Project S

Initial cost $10,000

Y1 CF = $6,000

y2 CF = $8,000

Project L

Initial Investment = $10,000

Y1-Y4 CF = $4,373

Solution:

For Project S

We shall prolong the project to four years so it can be easily compared to project L

Following shall be the cashflow stream:

Y0=-$10,000 Y1=$6,000 Y2=-$2,000($8,000 CF - $10,000 outlay for prolonging the project second time) Y3=$6,000 Y4=$8,000

Now to discount the cashflow

$NPV=-10000/(1+0.0925)^0+6000/(1+0.0925)^1-2000/(1+0.0925)^2+6000/(1+0.0925)^3+8000/(1+0.0925)^4$

$NPV=4033.40$

For Project L

In order to calculate present value of the annuity, following formula will be used:

$PV=PMT(1+(1/(1+r)^n)/r$

NPV = Initial outlay - PV

$4373(1+(1/(1+0.0925)^4)/0.0925=14089.9$

$NPV=-10000+14089.9$

$NPV=4089.9$

Now, we can easily calculate how much value will the firm gain or lose if Project L is selected over Project S

$Value=NPV(L)-NPV(S)$

$Value=4033.40-4089.90$

$Value=56.50$

*all figures are rounded off to two decimal points*

7 0

2 years ago

Nora contracts to work for ABC Investments during June for $2,500. On May 31, ABC cancels the contract. Nora refuses to accept a

kap26 [50]

Answer:

c. $500

Explanation:

A contract is an agreement by two or more parties to perform a.certain activity within a given time.

When contract are breached, the beneficiary has the right to gain back the amount promised.

If the beneficiary can get another option, the other party is obligated to pay the balance.

On this instance Nora had the chance to get a new job at $2,000 salary the balance is $2,500 - $2,000= $500. Since she rejected the job she is responsible for that loss.

However ABC is still liable to pay the balance of $500

6 0

2 years ago

On his way home from work, Phil stopped at a shopping center. He parked in front of the dry cleaner, where he could pick up his

Anika [276]

Answer:

Neighbourhood centre

Explanation:

A neighbourhood centre is a place where local local residents have access to a wide range of services. People gather for group activities, social support, public information and so on.

Phil stopped at a shopping center. He parked in front of the dry cleaner, where he could pick up his suit. He did not have to move his car because next door was a gift shop where he could pick up a gift for his niece. Conveniently enough, next door to that store was a supermarket, where he purchased essentials like milk and cornflake cereal.

Phil is at a neighbourhood centre where wide variety of services are provided locally.

7 0

2 years ago

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