Answer:
A) Somewhat effective, but only to the extent that most of the tax cut is concurrently spent on domestic output, that multiplier effects occur, and crowding out is small.
Explanation:
First of all, the larger amount of money would increase the inflation rate since aggregate supply hasn't increased. The number of goods and services offered do not vary, then only thing that varies is the amount of disposable money.
The larger the multiplier, the larger the positive effect. The multiplier formula = 1 / MPS (marginal propensity to save). Even though inflation increases, still the economy is going to grow. That unless the local residents decide to purchase many imported goods. The larger the amount of imported goods purchased, the lower the positive effects.
This type of policy can be very effective under conditions where deflation or inflation rates are near 0 or even negative. Although high inflation is very bad for the economy, a small amount of inflation is always needed to boost economic growth. The healthy inflation is around 1.5 - 2% per year. This way salaries and wages can grow, pushing aggregate demand and supply.
Answer: b. Foreign direct investment.
Explanation: This is when a firm or business owns more than 10% of a a foreign company.
A foreign direct investment can be made by getting a lasting interest or by expanding one’s business or company into a foreign country.
The lasting interest makes Foreign Direct Investment from foreign portfolio investments, where investors passively hold securities from a foreign country.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Units Produced 20,000
Units Sold 17,000
Unit Sales Price $ 240
Full Manufacturing Cost Per Unit $97
<u>Under the absorption costing method, the fixed manufacturing overhead is part of the product cost.</u>
Income statement:
Sales= (17,000*240)= 4,080,000
Cost of goods sold= (17,000*97)= (1,649,000)
Gross profit= 2,431,000
Variable Selling Expenses= (71,000)
Fixed General and Administrative Costs= (88,000)
Net operating income= 2,272,000
Answer/Explanation:
Susan's veterinary expenses are deductible for adjusted gross income
because she is self-employed and at the same time her vet practice constitutes a business.
Therefore, all of her veterinary expenses are deductible for adjusted gross income.
Alexandra is said to be in a trade or business as an employee and
the unreimbursed expenses of an employee are deducted as miscellaneous itemized deductions.
Therefore, Alexandra only benefits if she itemizes her deductions while Susan will always get the full benefit of the deduction.
Answer:
See below
Explanation:
1. Complete accrual basis income statement
Sales
($28,000 + $3,000)
$31,000
Less cost of goods sold
($13,000 + $2,000 - $3,000)
-$12,000
Operating expenses
($9,000 - $2,000)
-$7,000
Depreciation expenses
-$4,000
Income tax
($4,000 + $1,000)
-$5,000
Amortization expense
-$1,000
Gain on sale of equipment
$2,000
Net income
$4,000
2. Cash flow statement (Indirect)
Net income
$4,000
Adjustments;
Add depreciation
$4,000
Add write off intangibles
$1,000
Less gain on sale of equipment
-$2,000
Less increase in accounts receivables
-$3,000
Less increase in inventory
-$3,000
Add increase in accounts payable
$2,000
Less decrease in accrued payable
-$2,000
Add increase in deferred income tax payable
$1,000
Net cash from operations $2,000
