Answer: Option D
Explanation: In simple words, short run refers to the time frame in which all the factors of production are fixed while in the long run all of them are variable.
This happens due to the fact that in the short run if the company goes for changing the level of inputs than the opportunity that were availing in that time period will be gone by then leading to losses as the total time frame is very less in short run.
On the other hand, firms tends to have greater life in the market and keeps developing themselves with the changing forces of market.
Answer:
The answer is:
Helps the government and a homeowner with a fixed-rate mortgage
But hurts a union worker in the second year of a labor contract and a college that has invested some of its endowment in government bonds
Explanation:
The government: This unexpected Increase in inflation help the government in the sense that it reduces the real value of government debts(it erodes the purchasing power of the debtors). It also increases the tax revenue.
A homeowner with a fixed-rate mortgage: This unexpected Increase in inflation also pays this category because the interest rate he is paying for his mortgage is less than the prevailing interest rate.
A union worker in the second year of a labor contract: This unexpected increase hurts this worker because the terms of the contract would have been based on the expected inflation rate(3%) but for this unxpected increase, its purchasing power will be eroded.
A college that has invested some of its endowment in government bonds: It hurts the college because higher inflation rate means the college is receiving a lower interest payment from the bond.
Answer:
Jan 22
Dr Cash $720,000
Cr Common stock $720,000
Feb 14
Dr Cash $2,420,000
Cr Preferred stock $2,420,000
30
Dr Cash $540,000
Cr Preferred stock $495,000
Cr Paid in capital in excess of par-Preferred stock $45,000
Explanation:
Preparation of the journal entries
Jan 22
Dr Cash $720,000
Cr Common stock $720,000
(180,000 shares * $4)
Feb 14
Dr Cash $2,420,000
Cr Preferred stock $2,420,000
(44,000 shares * $55)
30
Dr Cash $540,000
(9,000 shares * $60)
Cr Preferred stock $495,000
(9,000 shares * $55)
Cr Paid in capital in excess of par-Preferred stock $45,000
[9,000 shares *($60- $55) ]
Answer: Introduction Stage
Explanation: Just took the test
