Answer:
a. Benefits of growth;
1. Increased production to meet demand
b. Negative effects of inflation;
1. Increased opportunity cost of holding money
Explanation:
a.
Expansionary monetary policies are government incentives that aim to encourage the growth of the economy by increasing the supply of money in the economy. It involves the boosting of aggregate demand to cover for the shortfalls in private demand. Most economies that go into a recession is usually due to a lack in the aggregate demand. The main purpose of expansionary monetary policy is to encourage spending and investment by encouraging accessibility of money in the economy. When more people have access to money, they tend to invest more into the economy which encourages economic growth. On the same note, when individuals in an economy have money, it increases the availability of disposable income. This means that most people feel much wealthier which encourages them to spend more. Spending also increases demand for goods which encourages production which consequently encourages economic growth.
b.
On the contrary, when expansionary monetary policy exceeds a certain level, it leads to inflation. Inflation is basically the increase in prices in an economy due to increased demand for goods that surpasses the supply. Thus suppliers increase the price since the availability of goods and services is limited. Some effects of inflation include an increased opportunity cost of holding money and discourages investors since they are uncertain over the future.
Answer:
Total cash receipts 194,760
Explanation:
We will calculate base on the budget number provided.
We will multiply the month sales revenue by the amount expected to be colelcted on september
The receipts from account receivable on september:
<u>60% of previous month:</u>
60% of August: 198,000 = 118,800
<u>36% from the second month:</u>
36% of July: 211,000 = <u> 75,960 </u>
Total cash receipts 194,760
Answer:
Explanation:
2/10 , n/30 is a credit term arrangement where the seller agrees with the buyer that if payments are made within 10 days after purchase , he will enjoy a 2% discount or otherwise pay the full invoice amount at 30 days.
As Jepson paid on the 18th of the same month which is 9 days after purchase , he is entitled to 2% discount on the sales.
<u>Journal Entry</u>
September 8
Credit Sales - $9,600
Debit receivable = $9,600
September 18
Debit Cash - $9,408
Debit sales discount - $ 192
Credit receivable - $9,600
