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3 years ago

Which policy tools are considered automatic stabilizers?

1 answer:

6 0

In the fiscal policies of governments, automatic stabilizers are meant to correct and stabilize the fluctuations that arise within the economy of nations. The policy tools that are considered automatic stabilizers are;

A progressive income tax structure

Government unemployment benefits

At times, the economy of a nation might experience shocks and destabilizations. These policy tools listed above are meant to generate taxes from the citizens that would cushion the effects of these shocks.

They help to increase the flow of money in the economy when it is passing through difficulties like recessions.

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If the IS curve is given by Y = 1,700 – 100r, the money demand function is given by (M/P)d = Y – 100r, the money supply is 1,000

Aleonysh [2.5K]

Answer:

The equilibrium income increases by 50.

Explanation:

The IS curve is given by Y = 1,700 - 100r

The money demand function is given as (M/P)d = Y - 100r

The money supply is 1,000.

The price level is 2.

Putting value of Y in money demand function.

1,000/2 = Y - 100r

500 = 1,700 - 100r - 100r

1700 - 500 = 200r

r = 1200\200

r = 6%

Putting value of r = 6% in IS curve equation

Y = 1,700 - 100r

Y = 1,700 - 600

Y = 1,100

Now, if the money supply is increased to 1,200.

Putting value of Y in money demand function.

1,200/2 = Y - 100r

600 = 1,700 - 100r - 100r

1700 - 600 = 200r

r = 1100\200

r = 5.5%

Putting value of r = 5.5% in IS curve equation

Y = 1,700 - 100r

Y = 1,700 - 550

Y = 1,150

So, we see that on increasing money supply from 1,000 to 1,200 the income increase by 50 and rate of interest falls by 0.5 percent.

4 0

3 years ago

If this type of manager withdraws too much, it can sometimes result in a lack of productivity, cohesion, and employee satisfacti

Nostrana [21]

D) Laissez-faire

Laissez-Faire/Free-Rein Management Style
If the laissez-faire manager withdraws too much, it can sometimes result in a lack of productivity, cohesion, and satisfaction. Under this type of management, subordinates are given a free hand in deciding their own policies and methods.

3 0

3 years ago

Kruger corporation sells construction equipment to a customer for $50,000. The equipment comes with a standard 2-year warranty c

Darya [45]

Answer:

The missing question is "Kruger offers an extended warranty that covers repairs for years 3 through 10. The price of the extended warranty is $3,000. Kruger estimates that it costs $2,500, on average, to provide the additional repairs required under the extended warranty.

Required: Assuming the customer chooses not to purchase the extended warranty, what journal entry(ies) should Kruger make at the time of the sale? Assuming the customer chooses to purchase the extended warranty, what journal entry(ies) should Kruger make at the time of the sale?"

Solution:

Date Account Titles Debit Credit

Cash $50,000

Sales revenue $50,000

Warranty expense $1,200

Warranty liability $1,200

Date Account Titles Debit Credit

Cash $53,000

Sales revenue $50,000

Unearned revenue $3,000

Warranty expense $1,200

Warranty liability $1,200

8 0

3 years ago

Veneer Corporation has a competitive advantage in contract manufacturing of small electrical components and expects their compet

Burka [1]

Answer:

Assets 2018 2019 2020 2021

Current Assets:

Cash 368 1,823 1,721 2,270

Account Receivavle 1,622 1,599 1,919 2,303

Inventories 544 590 708 850

Current Assets 2,534 4,012 4,348 5,422

Fixed Assets

Fixed Assets 7,800 8,474 8,898 9,343

Accumulated depreciation -580 -730 -847 -890

Net Fixed Assets 7,220 7,744 8,050 8,453

Total 9,754 11,756 12,398 13,875

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Account Payable 370 512 614 737

Short term debt 1,800 2,288 2,288 2,288

Total Current liabilities 2,170 2,800 2,902 3,025

Long Term Debt 5,070 5,392 4,852 4,312

Shareholders' Equity:

Common Stock 1,000 1,000 1,000 1,500

Additional paid in capital 2,000 2,000 2,000 2,000

Retained earnings -250 797 1,876 3,270

Total 2,750 3,797 4,876 6,770

Treasury stock -233 -233 -233 -233

Total Shareholders' Equity: 2,517 3,564 4,643 6,537

Total 9,757 11,756 12,398 13,875

-3 0 0 0

Statements of Income

2018 2019 2020 2021

Revenues 16,389 18,210 21,852 26,222

Cost of goods sold 10,832 12,035 14,442 17,330

Gross profit on sales 5,558 6,175 7,410 8,892

Operating expenses 3,521 3,912 4,694 5,633

Depreciation 150 150 117 42

EBIT 1,887 2,113 2,598 3,216

Interest expense 603 502 384 357

Income Taxes 449 564 775 1,001

Net Income 835 1,047 1,439 1,859

Explanation:

Assets 2018 2019 2020 2021

Current Assets:

Cash 368 1,823 1,721 2,270

Account Receivavle 1,622 1,599 1,919 2,303

Inventories 544 590 708 850

Current Assets 2,534 4,012 4,348 5,422

Fixed Assets

Fixed Assets 7,800 8,474 8,898 9,343

Accumulated depreciation -580 -730 -847 -890

Net Fixed Assets 7,220 7,744 8,050 8,453

Total 9,754 11,756 12,398 13,875

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Account Payable 370 512 614 737

Short term debt 1,800 2,288 2,288 2,288

Total Current liabilities 2,170 2,800 2,902 3,025

Long Term Debt 5,070 5,392 4,852 4,312

Shareholders' Equity:

Common Stock 1,000 1,000 1,000 1,500

Additional paid in capital 2,000 2,000 2,000 2,000

Retained earnings -250 797 1,876 3,270

Total 2,750 3,797 4,876 6,770

Treasury stock -233 -233 -233 -233

Total Shareholders' Equity: 2,517 3,564 4,643 6,537

Total 9,757 11,756 12,398 13,875

-3 0 0 0

Statements of Income

2018 2019 2020 2021

Revenues 16,389 18,210 21,852 26,222

Cost of goods sold 10,832 12,035 14,442 17,330

Gross profit on sales 5,558 6,175 7,410 8,892

Operating expenses 3,521 3,912 4,694 5,633

Depreciation 150 150 117 42

EBIT 1,887 2,113 2,598 3,216

Interest expense 603 502 384 357

Income Taxes 449 564 775 1,001

Net Income 835 1,047 1,439 1,859

7 0

3 years ago

Juan is always researching different investment options. A few weeks ago he noticed some nice homes for sale in his neighborhood

lesya692 [45]

Answer: The market will experience more demand and the prices of goods will rise up.

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7 0

3 years ago

Read 2 more answers