All categories

3 years ago

Consider the following information:

Business

1 answer:

Stolb23 [73]3 years ago

7 0

Answer:

The individual will plan to spend or consume more of his wages than usual; since he believes there'll be a tax cut.

Explanation:

C = consumption

W = wages

Note: No graph is attached to the question so we can't make use of certain information in the question.

Suppose there is an announced change in tax policy - a tax cut/reduction - and a tax increase later; <em>what is the impact of this policy on consumption if the consumer believes that the policy will be implemented?</em>

<em />

Reasoning as an economist, the first reaction of a rational consumer is to begin to consume more since he believes the tax reduction policy will be implemented.

NOTE that sometimes the government or financial ministry in a country intentionally announce policies just so citizens can begin adjusting their consumption and investment patterns in line with them. They do not necessarily follow up with implementation of the policies.

So for a consumer who believes that there'll be a tax cut, he'll be excited and will either consume more of his present wage or consume all and borrow or dissave.

You might be interested in

A strong internal control system will reduce the amount of substantive testing that must be performed.A ) True B ) False

Doss [256]

Answer:

A) True

Explanation:

The internal control structure deals with the rules, laws, procedures, practices that vary from company to company that are necessary to attain an organization's goals and objectives.

The substantive testing is an audit process aimed at checking the accuracy and reliability of the financial statements. To check if the financial statements are free from any errors, mistakes, fraud, etc. that can change users' decisions.

The financial statements should be relevant, reliable and finalize in all respects.

Therefore, a strong internal system will reduce the quantity of substantive testing required.

4 0

3 years ago

Scenario: Economic hardship has befallen the country after a world war in the year 2055. Thankfully, we are victors. However the

Aloiza [94]

Answer:

I RLLY NEED THESE POINTS IM SO SORRY!

Explanation:

8 0

2 years ago

The Fed has decided to expand the money supply, leading to lower interest rates. As a partner in a tech start-up, you react to t

Alona [7]

Answer:

A, B and D

Explanation:

Expanding the money supply is an exercise of expansionary monetary policy.

This decision will first allow our tech startup to acquire cheaper loans and expand our operations, this expansion in operations will result in new employment opportunities and hence as a result, unemployment will be reduced assuming this is a general trend in the economy.

This decision also directly reflects an increased investment and hence the GDP on the whole and the investment part of GDP would both increase,

GDP = C + I + G + (X - M), where I = investment.

This change in macro economy will increase aggregate demand due to expansionary effects. Increase in imports is not conclusive as it may or may not happen depending upon the demand state.

Hope this helps.

8 0

3 years ago

The category that is generally considered to be the best measure of a company's ability to continue as a going concern is A. cas

saul85 [17]

Answer:

D. cash flows from operating activities

Explanation:

Operating activities include the functions of a business with respect to providing its goods and services to the market. Operating activities for a company include sales, manufacturing, marketing activities and advertising. The category that is generally considered to be the best measure of a company's ability to continue as a going concern is cash flows from operating activities.

8 0

3 years ago

For people who live near a bus route, a subway station, or a commuter rail line, public transportation provides a substitute to

Tom [10]

Answer: Positive.

Explanation:

Suppose there are two related goods, i.e, Good A and Good B.

Cross price elasticity of demand refers to the responsiveness of demand for Good A if there is a change in the price of its related good, i.e, Good B.

Now, we are talking about gasoline and public transportation, suppose if there is increase in the price of gasoline then it will be costlier for the people to drive their own cars, as a result demand for public transportation increases.

There is a positive relationship between the gasoline and public transportation.

Hence, cross-price elasticity of demand between gasoline and public transportation is Positive.

5 0

3 years ago