a) Equilibrium price = $100, Equilibrium quantity = 200. b) Shortage: Price = $90, Quantity supplied = 180, Quantity demanded = 210, Shortage = 30. c) Neither shortage nor surplus. d) Surplus: Price = $130, Quantity supplied = 200, Quantity demanded = 110, Surplus = 90.
To find the equilibrium price and quantity, we set the quantity supplied equal to the quantity demanded:
2P = 300 - P
Combining like terms, we get:
3P = 300
Dividing both sides by 3, we find:
P = 100
Substituting the equilibrium price back into either the supply or demand equation, we can find the equilibrium quantity:
Q = 300 - P = 300 - 100 = 200
Therefore, the equilibrium price is $100 and the equilibrium quantity is 200.
If a price ceiling of $90 is imposed, it is below the equilibrium price. This will create a shortage in the market. The price will be $90, the quantity supplied will be 180 (calculated by substituting P = $90 into the supply equation QS = 2P), the quantity demanded will be 210 (calculated by substituting P = $90 into the demand equation QD = 300 - P), and the size of the shortage will be 30 (quantity demanded minus quantity supplied).
If a price floor of $90 is imposed, it is above the equilibrium price. This will create a surplus in the market. The price will still be $100 (the equilibrium price), the quantity supplied will be 200 (equilibrium quantity), the quantity demanded will be 110 (calculated by substituting P = $90 into the demand equation QD = 300 - P), and the size of the surplus will be 90 (quantity supplied minus quantity demanded).
If a tax of $30 is levied on producers, the supply curve shifts upward by that amount. The new supply equation becomes QS = 2(P - 30). This will create a surplus in the market. The price will increase to $130 ($100 equilibrium price + $30 tax), the quantity supplied will be 200 (equilibrium quantity), the quantity demanded will still be 110 (calculated by substituting P = $130 into the demand equation QD = 300 - P), and the size of the surplus will be 90 (quantity supplied minus quantity demanded).
To know more about demand curves, here
https://brainly.com/question/13131242
#SPJ4
Murphy must pay $20 each for punk rock video cassettes (V). If Murphy is paid $15 per sack for accepting garbage (G) and if her relatives send him an allowance of $200, then her budget line is describ
Murphy's budget line, given an allowance of $200, can be represented by the equation 20x + 15y = 200, and it shows the various combinations of video cassettes and garbage sacks that Murphy can afford within her budget.
To describe Murphy's budget line, we need to consider the prices of punk rock video cassettes (V) and the payment for accepting garbage (G), as well as the allowance received from relatives.
Let's assume the quantity of video cassettes Murphy can purchase is represented by the variable 'x', and the quantity of garbage sacks she accepts is represented by the variable 'y'. The prices for video cassettes and garbage acceptance are $20 and $15 per unit, respectively.
Murphy's budget line can be represented by the equation: 20x + 15y = budget
The budget consists of two components: the allowance received from relatives and the total spending on video cassettes and garbage sacks.
If we assume Murphy's relatives send her an allowance of $200, the budget line equation becomes: 20x + 15y = 200
This equation represents all the possible combinations of video cassettes (V) and garbage sacks (G) that Murphy can purchase or accept with her given budget.
To graphically represent the budget line, we can plot points on a two-dimensional graph where the x-axis represents the quantity of video cassettes (V) and the y-axis represents the quantity of garbage sacks (G). By solving the equation for different values of x and y, we can plot the corresponding points and draw a straight line connecting them.
The slope of the budget line is -20/15, which simplifies to -4/3. This means that for every 4 video cassettes Murphy purchases, she must forego 3 garbage sacks to stay within her budget.
for more such questions on allowance
https://brainly.com/question/4636062
#SPJ11
Which of the following statements is most CORRECT? a. A conglomerate merger is one where a firm combines with another firm in the same industry. b. Regulations in the United States prohibit acquiring firms from using common stock to purchase another firm. c. Defensive mergers are designed to make a company less vulnerable to a takeover. d. The equity residual method values a target firm by discounting residual net cash flows at the acquiring firm's overall cost of capital reflecting the combined firm's post-merger capital structure. e. A financial merger occurs when the operations of the firms involved are integrated in the hope of achieving synergistic benefits.
The effectiveness and appropriateness of defensive strategies may vary depending on the specific circumstances and objectives of the companies involved.
Which statement about defensive mergers is correct?A defensive merger refers to a merger or acquisition undertaken by a company to protect itself from a potential hostile takeover by another company.
The purpose of a defensive merger is to make the target company less attractive or more difficult to acquire, thereby deterring the acquiring company.
Defensive mergers can be implemented through various strategies, such as acquiring a company that has a strong customer base or valuable assets, issuing additional shares to dilute the ownership stake of potential acquirers, or entering into agreements with other companies to create barriers for a hostile takeover.
The goal of a defensive merger is to enhance the target company's defenses and increase its bargaining power, making it more challenging for the acquiring company to successfully complete the takeover.
By undertaking defensive measures, the target company aims to maintain its independence, protect shareholder interests, and preserve its existing management structure.
It's important to note that defensive mergers can be controversial and are often subject to scrutiny and legal regulations to ensure fair practices in the market.
Learn more about defensive strategies
brainly.com/question/24914634
#SPJ11
Any help or advice with "Interpretation of the results
of CVP analysis"
Chris has already prepared a CVP analysis of the projected
revenue, variable costs, and fixed costs for the two-year period
200
Reminder: blue cells = require your input white cells = do not change; Chris already input the white cells Mountain Man Lager Sales Less: Variable cost - COGS Contribution Margin Less: Fixed Cost Oper
The CVP (Cost-Volume-Profit) analysis which is useful to understand the relationships between the fixed costs, variable costs, the volume of goods produced, the price of the goods, and the profit generated from the business.
CVP analysis is an essential tool for managers to make better and effective decisions. Here is the interpretation of the results of CVP analysis: CVP analysis helps us to determine the break-even point where we neither make a profit nor a loss. The data collected from CVP analysis helps managers to know the minimum amount of products they need to sell to make a profit.
CVP analysis helps managers to analyze the profit and loss of the company at different levels of sales. The results of the CVP analysis can be used by managers to compare and evaluate different options for pricing, production volume, and cost structures.
The information derived from the CVP analysis can be used for future projections and decision making. CVP analysis can be used for scenario analysis to analyze the impact of different variables on the profitability of the business.
To know more about CVP refer here : brainly.com/question/31252611
#SPJ11
Chocolate Treats has the following account balances:
Cost of goods sold $390,000 Rent expense $45,000
Depreciation expense 12,500 Salaries expense 56,000
Insurance expense 3,100 Sales 575,000
Interest expense 11,500 Sales discounts 5,500
Interest revenue 9,200 Sales returns and allowances 16,500
Assuming Chocolate Treats uses a multiple-step income statement, calculate the following: (a) net sales, (b) gross profit, (c) operating expenses, (d) profit from operations, and (e) profit.
(a) Net sales $
(b) Gross profit $
(c) Operating expenses $
(d) Profit from operations $
(e) Profit $
Assuming Chocolate Treats uses a multiple-step income statement,
(a) Net sales: $553,000
(b) Gross profit: $163,000
(c) Operating expenses: $128,100
(d) Profit from operations: $34,900
(e) Profit: $44,100
To calculate the values requested, we need to use the information provided and perform the necessary calculations:
(a) Net sales:
Net sales = Sales - Sales discounts - Sales returns and allowances
Net sales = $575,000 - $5,500 - $16,500 = $553,000
(b) Gross profit:
Gross profit = Net sales - Cost of goods sold
Gross profit = $553,000 - $390,000 = $163,000
(c) Operating expenses:
Operating expenses = Rent expense + Depreciation expense + Salaries expense + Insurance expense + Interest expense
Operating expenses = $45,000 + $12,500 + $56,000 + $3,100 + $11,500 = $128,100
(d) Profit from operations:
Profit from operations = Gross profit - Operating expenses
Profit from operations = $163,000 - $128,100 = $34,900
(e) Profit:
Profit = Profit from operations + Interest revenue
Profit = $34,900 + $9,200 = $44,100
Learn more about the multiple-step income statement at
https://brainly.com/question/15460174
#SPJ4
how technology and digital communications can help teams improve
performance and achieve organizational goals.
Technology and digital communications play a crucial role in improving team performance and helping organizations achieve their goals. Technology and digital communications empower teams to work more efficiently, collaborate seamlessly, access relevant information, streamline workflows, and track performance.
In several ways:
1. Enhanced Communication: Technology allows teams to communicate more efficiently and effectively. Tools like email, instant messaging, video conferencing, and project management software enable seamless communication, irrespective of geographical boundaries. This facilitates faster decision-making, collaboration, and knowledge sharing among team members.
2. Remote Collaboration: With the rise of remote work, technology enables teams to collaborate regardless of their physical location. Cloud-based platforms, virtual meeting tools, and shared project management systems allow teams to work together on projects in real-time, improving productivity and enabling flexibility.
3. Access to Information and Resources: Technology provides teams with easy access to relevant information and resources. Online databases, intranets, and shared document repositories ensure that team members can access the necessary data, documents, and tools required to perform their tasks efficiently.
4. Streamlined Workflows: Digital tools automate and streamline various processes, eliminating manual and time-consuming tasks. Workflow management systems, task management software, and automation tools help teams prioritize tasks, track progress, and optimize their workflow, leading to increased efficiency and productivity.
5. Collaboration and Knowledge Sharing: Technology enables teams to collaborate on documents, share ideas, and provide feedback in real-time. Online collaboration platforms, shared document repositories, and internal communication channels foster a culture of knowledge sharing, enabling teams to leverage each other's expertise and make informed decisions.
6. Performance Tracking and Analytics: Digital tools provide organizations with the ability to track and analyze team performance and outcomes. Project management software, performance dashboards, and data analytics tools help teams and managers monitor progress, identify bottlenecks, and make data-driven decisions for continuous improvement.
Overall, technology and digital communications empower teams to work more efficiently, collaborate seamlessly, access relevant information, streamline workflows, and track performance. By leveraging these tools, teams can enhance their productivity, achieve organizational goals, and adapt to the rapidly evolving business landscape.
To know more about technology,
https://brainly.com/question/28288301#
#SPJ11
Classify the following items in a statement of cash flows: (a) Payments of office rental (b) Repayment of loans (c) Acquired motor vehicle for cash
Select one: a. (a) Operating outflow; (b) Investing outflow; (c) Investing inflow b. (a) Operating inflow; (b) Financing outflow; (c) Operating outflow c. (a) Operating inflow; (b) Operating outflow; (c) Operating inflow d. (a) Operating outflow; (b) Financing outflow; (c) Investing outflow
The classification of the following items in a statement of cash flows is:(a) Payments of office rental - Operating outflow(b) Repayment of loans - Financing outflow(c) Acquired motor vehicle for cash - Investing outflowThe classification of cash flows is divided into three major sections.
operating activities, investing activities, and financing activities. Cash flow statements reveal the changes in cash and cash equivalents over a certain period of time. In a cash flow statement, operating activities provide a company with cash inflows and outflows from its primary business operations. On the other hand, investing activities provide cash inflows and outflows associated with purchasing or selling assets like property.
plant, and equipment (PP&E). Finally, financing activities provide cash inflows and outflows from debt and equity financing.However, as per the above details, the classification of cash flow for payments of office rental is Operating outflow, repayment of loans is Financing outflow, and acquired motor vehicle for cash is Investing outflow.
To know more about items visit:
https://brainly.com/question/31383285
#SPJ11
Menue Item Number SOld Popularity Index Forecast # Guests Forecast Item Sold
Steamed Fish 175 Seafood Hot Pot 125 Vegetable Lo Mein 200 Total 700 1. What is the popularity index for Vegetable Lo Mein?
Answer: Popularity Index for Vegetable Lo Mein = No. of Vegetable Lo Mein sold / Total number of all menu items sold
Where, Total number of all menu items sold = No. of Steamed Fish sold + No. of seafood Hot Pot sold + No. of Vegetable Lo Mein sold = 175 + 125 + 200 = 500
Therefore, Popularity Index for Vegetable Lo Mein = 200 / 500 = 0.4
2. Based on its popularity index, what would be the predicted number of Seafood Hot Pots to be sold if management forecasts that 700 guests will be served?
If 700 guests are served, we can predict the proportion of seafood hot pots that will be sold Popularity based on the popularity index.
The popularity index shows how popular a menu item is in relation to other options.We may multiply the popularity index of seafood hot pot by the anticipated total number of guests served (700) to determine the anticipated number of seafood hot pots sold: Predicted sales of seafood hot pots = seafood hot pot's popularity index * anticipated amount of visitor..Using the provided data, the predicted attendance is 700, and the popularity index of Seafood Hot Pot is 125. Thus:Seafood Hot Pot sales forecast: 125/500 * 700 = 0.25 * 700 = 175
learn more about sold Popularity here:
https://brainly.com/question/194569
#SPJ11
A tax is to be levied on buyers of each of two products: bread and salami. Construct a diagram to show in each case whether the burden of the tax is paid by the consumer or the seller. What aspect of the market dictates how the burden of tax is allocated?
The burden of the tax is levied on the consumers in both cases of products, bread and salami. The allocation of the tax burden between the buyer and the seller is determined by the price elasticity of demand and the price elasticity of supply.
Tax on products such as bread and salami will impact the price of those products. The concept of tax incidence is used to determine who actually pays the tax. The burden of the tax can fall either on the seller or on the buyer depending upon the elasticity of the demand and supply in the market. The demand curve is relatively less elastic than the supply curve, the burden of the tax is borne by the consumer. In case of the bread and salami products, both have relatively inelastic demands, thus the burden of the tax is borne by the consumer. The allocation of the tax burden depends upon the elasticity of demand and supply in the market. If the demand is more elastic, the consumer will bear less burden and the seller will bear more. If the supply is more elastic, then the seller will bear less burden and the consumer will bear more.
Know more about tax burden, here:
https://brainly.com/question/31923793
#SPJ11
sources of FDI in Bangladesh . in which sector does Bangladesh
gets FDI and which country contributes the FDI
Foreign Direct Investment (FDI) in Bangladesh comes from various sources and is invested in different sectors.
Countries are Asian Countries , Middle Eastern Countries ,European Countries, United States.
Sectors are Garments and Textiles , Energy and Power, Telecommunications, Pharmaceuticals, Banking and Financial Services.
Some of the sources of FDI in Bangladesh include,
Asian Countries
Asian countries play a significant role in FDI inflows to Bangladesh.
Countries such as China, Japan, Singapore, South Korea, and Malaysia are among the major contributors.
Middle Eastern Countries
Middle Eastern countries, particularly those in the Gulf Cooperation Council (GCC), also contribute to FDI in Bangladesh.
Countries like Saudi Arabia, Qatar, United Arab Emirates (UAE), and Kuwait have invested in sectors such as real estate, manufacturing, and energy.
European Countries,
Several European countries have also invested in Bangladesh.
The United Kingdom, Germany, France, and the Netherlands are some of the European countries that have made significant FDI contributions.
United States,
The United States is another important source of FDI for Bangladesh.
American companies have invested in sectors such as information technology, telecommunications, and manufacturing.
Regarding the sectors that attract FDI in Bangladesh, some key sectors include,
Garments and Textiles,
The garments and textiles sector is one of the major recipients of FDI in Bangladesh.
Many international clothing brands have set up manufacturing facilities and invested in the country's booming textile industry.
Energy and Power,
Bangladesh has been attracting FDI in the energy and power sector, particularly in renewable energy projects, such as solar and wind power.
The government has undertaken initiatives to promote investment in the power sector to meet the growing energy demand.
Telecommunications,
The telecommunications sector in Bangladesh has seen significant FDI inflows.
Foreign companies have invested in mobile network operations and infrastructure development to tap into the country's growing market.
Pharmaceuticals,
The pharmaceutical industry in Bangladesh has also attracted FDI.
International pharmaceutical companies have established manufacturing facilities and invested in research and development activities.
Banking and Financial Services,
FDI has been directed towards the banking and financial services sector in Bangladesh.
Foreign banks and financial institutions have established operations and invested in the country's banking sector.
The sources of FDI and the sectors attracting investment can evolve over time,
and new trends may emerge based on changing economic conditions, government policies, and global investment patterns.
Learn more about Foreign Direct Investment here
brainly.com/question/30665939
#SPJ4
In general, under the monetary approach to the exchange rate, while the short-run interest rate does not depend on the absolute level of the money supply, continuing growth in the money supply eventually will affect the interest rate. b. while the long-run interest rate does depend on the absolute level of the money supply, continuing growth in the money supply does not affect the Interest rate. while the long-rua interest rate does not depend on the absolute level of the money supply, continuing growth in the money supply eventuaily will affect the interest rate. d. the long-run interest rate does not depend on the absolute level of the money supply, and thus continuing growth in the money supply will not affect the interest rate. None of the above statements is true, C.
Expert Answer
In the monetary approach to the exchange rate, there are short-run and long-run interest rates. In general, while the short-run interest rate does not depend on the absolute level of the money supply, continuing growth in the money supply eventually affects the interest rate.
The long-run interest rate depends on the absolute level of the money supply, but continuing growth in the money supply does not affect the Interest rate. Therefore, the correct answer is b.Brief explanation:The monetary approach to the exchange rate focuses on the monetary policy and its effect on the exchange rate. In the short run, the exchange rate is determined by supply and demand for money. In the long run, it depends on the relative levels of prices in different countries.According to the monetary approach to the exchange rate, monetary policy can influence the exchange rate through changes in the supply of money. This is why central banks use monetary policy tools to manage the money supply and interest rates. Short-run interest rates are determined by market forces of supply and demand, and they are not affected by the absolute level of the money supply. However, the continuing growth of money supply affects the interest rate in the short run eventually.Long-run interest rates depend on the absolute level of the money supply, but continuing growth in the money supply does not affect the interest rate.This is because the market adjusts the long-term interest rate to reflect the expected rate of inflation. So, in the long run, changes in the money supply only affect the exchange rate through their effect on inflation.For such more question on interest rates
https://brainly.com/question/29451175
#SPJ8
1 points On January 1, 2019, Hamad Town Co. purchased a machine for $240,000. It is estimated that the machine will have a 10-year use Wo the end its useful life is estimated to be $20,000. oversete S
Hamad Town Co. purchased a machine for [tex]\$240,000[/tex] with a 10-year useful life and [tex]\$20,000[/tex] residual value, resulting in an annual depreciation expense of [tex]\$22,000[/tex].
On January 1, 2019, Hamad Town Co. acquired a machine for [tex]\$240,000[/tex] with an estimated useful life of 10 years and a residual value of [tex]\$20,000[/tex]. Depreciation is the allocation of the machine's cost over its useful life. For Hamad Town Co.'s machine, the depreciable cost is [tex]\$220,000[/tex] ([tex]\$240,000 - \$20,000[/tex]). The annual depreciation expense is calculated by dividing the depreciable cost by the useful life, resulting in [tex]\$22,000[/tex] per year. Depreciation expense represents the decline in value of the machine over time due to wear and tear, and it is recorded on the company's financial statements to reflect the reduction in the machine's value over its useful life.In conclusion, Hamad Town Co. purchased a machine for [tex]\$240,000[/tex] with a 10-year useful life and [tex]\$20,000[/tex] residual value, resulting in an annual depreciation expense of [tex]\$22,000[/tex].
For more such questions on depreciation expense:
https://brainly.com/question/28108679
#SPJ11
Help me fill the blank Tell me what should go into this blank(the green part) in order Someone answered but did not tell me what should go into this blank Let's say that the willingness to pay for public goods is given as follows. the cost of the supply of public goods is constant at $225. Fill in the blank. The supply of public goods Peter Mary Kate Jacob 1 250 340 120 215 2 200 270 100 160 3 135 80 70 100 4 60 100 25 40 Excludability High Low Rivalness High Low
The blank should be filled with $2,265. This is the total amount of money that people are willing to pay for the public goods.
In order to find what should be in the blank, let's calculate the sum of the willingness to pay for each person. In other words, we are going to add each row for Peter, Mary, Kate, and Jacob.
Then, we can get the total willingness to pay by adding all of the individual sums together. This will give us the total amount of money that people are willing to pay for the public goods.
Here is the calculation for each person's willingness to pay:-
1. Peter: 250 + 200 + 135 + 60 = $6452. Mary: 340 + 270 + 80 + 100 = $7903. Kate: 120 + 100 + 70 + 25 = $3154. Jacob: 215 + 160 + 100 + 40 = $515
Now, let's calculate the total willingness to pay by adding all of the individual sums together. Total willingness to pay: $645 + $790 + $315 + $515 = $2,265.
To learn more about "Public Good" visit: https://brainly.com/question/24825090
#SPJ11
ABC Stores, Inc., is a retailer with 5,000 employees with stores and warehouses located in three different cities in the same state. Their total payroll is $200 million. In recent years, the president of ABC, Chris Smith, has noticed significant increases in the cost of their workers’ compensation (WC) benefits. He is concerned that their current WC insurance premium of about $5 million per year is too high. He has heard several rumors that employees may be faking their injuries just to get WC benefits or that they may be staying off work longer than necessary, driving up ABC’s costs. In fact, the WC claims paid by their insurance company are running a little over the average for their industry for the past few years. ABC has one safety specialist who does loss prevention at all ABC facilities. Chris thinks that ABC’s safety program could be improved to reduce the frequency of injuries. Chris directs you, Pat Brown, HR director, to evaluate alternatives to help ABC manage this situation.
There are several options. ABC could purchase WC insurance coverage from a commercial insurance company as they have done in the past, or they could join a risk pool comprised of other retailers. Finally, they could adopt a self-insurance plan. Your job is to help ABC decide which option is the best choice. To help make this decision, you must do a cost-benefit analysis. A cost-benefit analysis helps an employer identify and evaluate the costs and benefits of alternative courses of action. They can then decide which alternative offers the greatest net benefits.
What would be the advantages and disadvantages of each option. What would be the option best for ABC?
Adopting a self-insurance plan would be the best option for ABC Stores, Inc. as it provides control over the workers' compensation program, tailored safety measures, and potential cost savings.
Let's analyze the advantages and disadvantages of each option for ABC Stores, Inc.:
1. Purchasing WC Insurance Coverage from a Commercial Insurance Company:
Advantages:
- Expertise: Commercial insurance companies specialize in providing insurance coverage and managing claims, so they have the necessary expertise to handle workers' compensation cases effectively.
- Predictable Costs: With a fixed premium, ABC can budget and plan for their workers' compensation costs more accurately.
Disadvantages:
- Limited Control: ABC has limited control over the claims process and the determination of benefits, as it is managed by the insurance company.
- Higher Premiums: Commercial insurance premiums often include additional costs to cover the insurer's overhead and profit margins, which can be relatively higher compared to other options.
2. Joining a Risk Pool Comprised of Other Retailers:
Advantages:
- Shared Risk: By pooling resources with other retailers, ABC can spread the risk of high-cost claims and benefit from shared expertise and best practices in managing workers' compensation.
- Potential Cost Savings: Joining a risk pool may result in lower insurance premiums compared to purchasing coverage individually.
Disadvantages:
- Limited Control: Similar to commercial insurance, ABC may have limited control over the claims process and benefits determination.
- Dependency on Other Retailers: The performance and claims history of other retailers in the risk pool could impact ABC's premiums and overall experience.
3. Adopting a Self-Insurance Plan:
Advantages:
- Cost Control: ABC has more control over claims management, which can potentially lead to cost savings by minimizing fraudulent claims and reducing unnecessary time off work.
- Tailored Approach: ABC can design and implement a safety program specifically tailored to their needs, focusing on reducing the frequency of injuries and improving overall workplace safety.
- Potential Cost Savings: Self-insured employers can avoid paying the profit margin and overhead costs associated with commercial insurance premiums.
Disadvantages:
- Financial Risk: ABC will be responsible for funding all workers' compensation claims directly, which could lead to higher financial exposure in the event of significant claims.
- Administrative Burden: Establishing and maintaining a self-insurance plan requires dedicated resources, expertise, and administrative capabilities.
Considering the situation described, the option that appears to be the best choice for ABC Stores, Inc. would be to adopt a self-insurance plan. By implementing a self-insurance plan, ABC can take control of their workers' compensation program, tailor their safety program to address specific needs, and potentially achieve cost savings in the long run. However, it is crucial for ABC to carefully assess their financial capabilities, risk tolerance, and administrative capabilities before deciding to pursue self-insurance.
In conclusion, based on the analysis, adopting a self-insurance plan would be the best choice for ABC Stores, Inc. to gain control, tailor their safety program, and potentially achieve cost savings.
For more such questions self-insurance plan:
https://brainly.com/question/31815070
#SPJ8
These are all the provided information please use what we
have
Question 2 [15] Obemvelo Ltd acquired 25% interest in Esethu (Pty) Ltd and exercised significant influence over Esethu (Pty) Ltd's financial and operating policies from 01 July 2020. Obemvelo paid R1
Obemvelo Ltd acquired a 25% interest in Esethu (Pty) Ltd and exerted significant influence over Esethu (Pty) Ltd's financial and operating policies beginning on July 1, 2020.
Obemvelo paid R1 million for the acquisition of the shares. The investment in Esethu (Pty) Ltd is not a controlling interest as the proportion of shares held by Obemvelo is less than 50% of the total share capital. Therefore, the equity method is used to account for this investment. The equity method is used to account for investments in associates. An associate is defined as an entity over which an investor has significant influence but not control. When the investor has the ability to exert significant influence over the financial and operating policies of the investee, the investor can recognize its share of the profits or losses of the investee.
However, the investor cannot recognize any losses beyond its investment. Obemvelo should account for its investment in Esethu (Pty) Ltd using the equity method.Obemvelo Ltd purchased a 25% intrest in Esethu (Pty) Ltd for R1 million and began exerting significant influence over its financial and operating policies on July 1, 2020. The equity method is used to account for investments in associates. An associate is defined as an entity over which an investor has significant influence but not control. When the investor has the ability to exert significant influence over the financial and operating policies of the investee, the investor can recognize its share of the profits or losses of the investee. However, the investor cannot recognize any losses beyond its investment.
Obemvelois not considered a controlling shareholder since its share capital in Esethu (Pty) Ltd is less than 50%. As a result, Obemvelo will not record the investment in Esethu (Pty) Ltd on its statement of financial position. Instead, Obemvelo should account for its investment in Esethu (Pty) Ltd using the equity method.The investor records the investment at cost and adjusts the carrying amount for the investor's share of the investee's profits or losses and dividends received. The investor's share of the investee's net profit or loss is recognized in the investor's profit or loss. The investor's share of the investee's changes in equity is recognized in the investor's equity.Obemvelo should account for the investment in Esethu (Pty) Ltd as follows:Investment in Esethu (Pty) Ltd: R1,000,000Share of investee's profit: R100,000 (if Esethu's profit for the year is R400,000)Carrying value of investment: R1,100,.
Obemvelo Ltd should use the equity method to account for its investment in Esethu (Pty) Ltd. The equity method is used to account for investments in associates. An associate is defined as an entity over which an investor has significant influence but not control. When the investor has the ability to exert significant influence over the financial and operating policies of the investee, the investor can recognize its share of the profits or losses of the investee. However, the investor cannot recognize any losses beyond its investment.
to know more about equity method visit:
brainly.com/question/24321852
#SPJ11
ASSUMPTIONS (current assets shaded) Cash & Equivalents Accounts Receivable Inventory Gross Fixed Assets (Accumulated Depr) Total Assets (current liabilities shaded) Accounts Payable Notes Payable Oper
The assumptions include cash & equivalents and accounts receivable as a part of the organization's current assets.
The assumptions based on the given table are: Current assets of the organization consist of cash & equivalents, accounts receivable, and inventory. They have a total gross fixed asset with a total accumulated depreciation. Total assets for the organization including current liabilities are represented by the sum of accounts payable, notes payable, and operating expenses.
Learn more about Equivalent:
https://brainly.com/question/2972832
#SPJ11
The cash flow from operations for 2008, given the cost of goods sold, the salary advertising, and other expenses would be $ 2, 170.
How to find the cash from operations ?The cash flow from operations would be the actual cash that was received from the day to day business of the firm. This includes revenue, taxes, and current asset and liability changes.
The cash flow from operations would be ;
= Revenue - Cost of goods sold - salary and advertising + Increase in accounts payable + decrease in inventory + increase in operating accruals + increase in current maturities - increase in accounts receivables - decrease in notes payables - less income taxes
= 3, 700 - 1, 700 - 1, 500 + 210 + 60 + 90 + 30 - 100 - 90 - 30
= $ 2, 170
Find out more on cashflow from operations at https://brainly.com/question/30026146
#SPJ4
Question is:
Calculate cash flow from operations for 2008
What are the major international tax provisions in the Tax Cuts and
Jobs Act that became effective in the United States in 2018? What
procedures are used to translate the foreign currency income of a
The major international tax provisions in the Tax Cuts and Jobs Act that became effective in the United States in 2018 are repatriation tax, GILTI, BEAT tax, and FDII tax.
The procedures used to translate the foreign currency income of a foreign operation into U.S. dollars for U.S. tax purposes are foreign currency items should be translated into U.S. dollars using the exchange rate in effect at the time the items are recognized, the functional currency of a foreign operation must be determined, the financial statements of the foreign operation must be remeasured into the functional currency, and the remeasured financial statements must be translated into U.S. dollars for U.S. tax purposes.
The major international tax provisions in the Tax Cuts and Jobs Act that became effective in the United States in 2018 are the following:
The repatriation tax - this provision imposes a one-time tax on unrepatriated foreign earnings that were accumulated by US companies' foreign subsidiaries.GILTI - it is an acronym for Global Intangible Low Taxed Income. This provision is aimed at addressing base erosion, by imposing a minimum tax rate of 10.5% on foreign income that was earned by US companies' foreign subsidiaries.The BEAT tax - this is the Base Erosion and Anti-abuse Tax. It is a new minimum tax regime, which applies to US companies that make cross-border payments to their foreign affiliates that exceed a certain threshold.The FDII tax - this provision aims to encourage US companies to maintain and/or expand their US-based operations, rather than moving to other jurisdictions. It does this by providing preferential tax treatment for US companies' foreign-derived intangible income.The procedures used to translate the foreign currency income of a foreign operation into U.S. dollars for U.S. tax purposes are as follows:
Foreign currency items should be translated into U.S. dollars using the exchange rate in effect at the time the items are recognized. The Internal Revenue Service provides a yearly average exchange rate. Taxpayers may use this rate in lieu of the exchange rate that is in effect at the time of the transaction, as long as the exchange rate does not vary by more than 5% from the average rate for the year.The functional currency of a foreign operation must be determined. The functional currency is the currency of the primary economic environment in which the entity operates; normally, it is the local currency.The financial statements of the foreign operation must be remeasured into the functional currency. The remeasurement process involves translating foreign currency items into the functional currency using the current exchange rate.The remeasured financial statements must be translated into U.S. dollars for U.S. tax purposes. The translation process involves translating the financial statements into U.S. dollars using the exchange rate in effect at the end of the tax year.Note: The question is incomplete. The complete question probably is: What are the major international tax provisions in the Tax Cuts and Jobs Act that became effective in the United States in 2018? What procedures are used to translate the foreign currency income of a foreign operation into U.S. dollars for U.S. tax purposes?
Learn more about Exchange rate:
https://brainly.com/question/30162608
#SPJ11
Glenco in Alberta has four employees with total gross earnings of $322,780.00 and excess earnings of $21,834.00. Calculate the total assessable earnings for Worker's compensation, when the maximum assessable earnings for 2022 are $98,700.00. O $300,946.00 O $322,780.00 O $344,614.00 O $394,800.0
The total assessable earnings for Worker's compensation in Glenco for the given year would be $300,946.00.
To calculate the total assessable earnings for Worker's compensation, we need to consider the gross earnings and excess earnings, while also taking into account the maximum assessable earnings for the given year.
First, we sum up the total gross earnings and excess earnings:
Total Gross Earnings = $322,780.00
Excess Earnings = $21,834.00
Next, we calculate the assessable earnings by subtracting the excess earnings from the total gross earnings:
Assessable Earnings = Total Gross Earnings - Excess Earnings
Assessable Earnings = $322,780.00 - $21,834.00
Assessable Earnings = $300,946.00
Therefore, the total assessable earnings for Worker's compensation in Glenco for the given year is $300,946.00.
To know more about Worker's compensation click here:
https://brainly.com/question/15307992
#SPJ11
Banking and regulation ‘We need new regulations in the banking sector to ensure that the global financial crisis never happens again.’ Discuss this commonly heard statement. In your answer, make sure you a. describe the common types of risk facing any banking sector and how these risks played out in the USA in the lead up to the global financial crisis, and
b. explain how effective you believe the new Basel III regulations will be in managing these risks in the future.
Banking and regulation go hand in hand as the banking sector is strictly regulated by authorities. Banks have risks and vulnerabilities. This led to the global financial crisis in 2008. This crisis left a lasting impact and raised the question of banking regulation.
In this answer, I will discuss the commonly heard statement, "We need new regulations in the banking sector to ensure that the global financial crisis never happens again.”Types of risks facing any banking sector.
There are several types of risks that any banking sector faces. These include credit risk, market risk, liquidity risk, interest rate risk, and operational risk.
Credit risk is the risk of loss due to a borrower's failure to pay back the loan.
Market risk is the risk of loss due to fluctuations in market prices.
Liquidity risk is the risk of not having enough funds to pay back lenders.
Interest rate risk is the risk of changes in interest rates that affect the bank's profits.
Operational risk is the risk of loss due to human errors, technological issues, and natural disasters.
How these risks played out in the USA in the lead up to the global financial crisis. Credit risk was the main contributor to the financial crisis. Banks offered mortgages to people who had poor credit scores. This put banks at a high risk of default. Market risk played a role as well. Banks invested heavily in subprime mortgage-backed securities. These securities were of low quality and had a high risk of default. In addition, the banks lacked liquidity, which led to the financial crisis. The banks had invested too much money in these securities and could not pay back the lenders. This led to a chain reaction of financial failures.
Explanation of how effective the new Basel III regulations will be in managing these risks in the future Basel III regulations are an improvement of the previous Basel II regulations. They require banks to have higher capital requirements, increased liquidity coverage ratios, and stricter rules on how to calculate risk-weighted assets. These regulations are expected to manage the risks in the banking sector effectively. They force banks to hold higher capital, reducing the risk of bankruptcy. They also ensure that banks have enough liquidity to meet their obligations. Stricter rules for calculating risk-weighted assets force banks to assess risks more accurately. This will lead to fewer investments in high-risk securities. In conclusion, the new Basel III regulations will help manage risks in the banking sector. They are expected to reduce the probability of a financial crisis.
To know more about the Operational risk, click here;
https://brainly.com/question/15081839
#SPJ11
.Explain the concept of "Divine Coincidence" and clearly state
the cases where it holds and where it does not hold.
Divine Coincidence refers to an incident in which two or more events, usually unrelated, occur in a manner that suggests an eerie relationship.
The idea of Divine Coincidence arises when a situation or event seems to be brought about by the hand of God, but in reality, it is a coincidence. For example, the coincidental discovery of the Americas by Christopher Columbus when he was trying to reach India is a classic instance of Divine Coincidence.
There are cases where the concept of Divine Coincidence holds and where it does not hold. Some of them are mentioned below:Where Divine Coincidence holds:When events are related to each other but are not directly connected, this is where Divine Coincidence holds.
For example, someone's wallet is stolen from their pocket in the market, but a few days later, it is found by someone and returned to them.
Where Divine Coincidence does not hold:When a person intentionally causes a chain of events to happen, or when there is a clear link between events, then the idea of Divine Coincidence does not hold.
For example, if a person plans their steps in order to make something happen in a particular way, they cannot claim that it was a coincidence when that event occurs.In conclusion, Divine Coincidence can be defined as an unplanned, unanticipated, and eerie occurrence of events that seem to be related but are actually unrelated.
Divine Coincidence holds when there is no direct connection between the events, but does not hold when the events are planned or linked.
To know more about Divine Coincidence click on below link:
https://brainly.com/question/14259750#
#SPJ11
question 5 assume that a bond makes 30 equal annual payments of $ 1 , 000 $1,000 starting one year from today. (this security is sometimes referred to as an amortizing bond.) if the discount rate is 3.5 % 3.5% per annum, what is the current price of the bond?
Using a financial calculator or spreadsheet software, we can find that the current price of the bond is $24,719.76.
An amortizing bond is a bond where the principal of the bond decreases over time. Each payment includes an amount that goes towards the interest as well as an amount that goes towards repaying the principal.
The current price of the bond can be found by calculating the present value of the stream of future cash flows that will be generated by the bond. The formula for present value is:
PV = CF / (1+r)^n where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of periods.
Assuming that the bond makes 30 equal annual payments of $1,000 starting one year from today, the cash flows generated by the bond can be represented as follows:
Year 1: $1,000
Year 2: $1,000
Year 3: $1,000...
Year 29: $1,000
Year 30: $1,000
The present value of each cash flow can be calculated using the formula above, and then added together to get the current price of the bond. Alternatively, we can use a financial calculator or spreadsheet software to do the calculations for us. Using a financial calculator or spreadsheet software, we can find that the current price of the bond is $24,719.76.
Learn more about amortizing bond here.
https://brainly.com/question/30999600
#SPJ11
The demand and supply functions for good x are:
QD = 780 – 2Px – 6Py + 0.02M
QS = 200 + 4Px – 5Pr – 2W
Currently, Py = 100, M = 5,000, Pr = 40, and W = 100.
a. If the government imposes a price floor of $100 in the market, how much of good x is NOT sold in the market?
b. If the government agrees to buy all of good x that is not sold in the market (as a result of the $100 price floor), what does this cost the government, and ultimately the tax payers?
Given the demand and supply functions for good x: QD = 780 – 2Px – 6Py + 0.02MQS = 200 + 4Px – 5Pr – 2WCurrently, Py = 100, M = 5,000, Pr = 40, and W = 100.
(a) If the government imposes a price floor of $100 in the market, how much of good x is NOT sold in the market? Price floor, Pf = $100Given the supply function QS = 200 + 4Px – 5Pr – 2WQS = 200 + 4Px – 5(40) – 2(100)QS = 200 + 4Px – 200QS = 4PxFrom this supply function, we can say that the supply curve is a straight line and that the slope of the supply curve is 4.Likewise, given the demand function QD = 780 – 2Px – 6Py + 0.02MQD = 780 – 2Px – 6(100) + 0.02(5,000)QD = 780 – 2Px – 600 + 100QD = 280 – 2PxFrom this demand function.
we can say that the demand curve is a straight line and that the slope of the demand curve is -2.Thus, at the price floor of $100, we can say that the quantity supplied is: QS = 4Px$100 = 4PxP x = $100/4P x = $25Hence, the quantity supplied is: QS = 4PxQS = 4($25)QS = 100Likewise, the quantity demanded at $25 is: QD = 280 – 2PxQD = 280 – 2($25)QD = 230We note that at the price floor of $100, the quantity demanded is less than the quantity supplied: QS > QD Quantity not sold = QS – QD = 100 – 230 = -130Quantity not sold in the market is more than 100.
To know more about market visit:
https://brainly.com/question/32094123
#SPJ11
The following data were extracted from the accounting records of Wedgeforth Company for the year ended November 30, 2010:
Merchandise inventory, December 1, 2009 $ 210,000
Merchandise inventory, November 30, 2010 185,000
Purchases 1,400,000
Purchases returns and allowances 20,000
Purchases discounts 18,500
Sales 2,250,000
Freight in 14,100
a. Prepare the cost of merchandise sold section of the income statement for the year ended November 30, 2010, using the periodic inventory system.
b. Determine the gross profit to be reported on the income statement for the year ended November 30, 2010.
Therefore, the gross profit to be reported on the income statement for the year ended November 30, 2010, is $849,400.
To prepare the cost of merchandise sold section of the income statement using the periodic inventory system, we need to calculate the cost of merchandise sold. We can use the following formula:
Cost of Merchandise Sold = Opening Inventory + Purchases + Freight In - Purchases Returns and Allowances - Purchases Discounts - Closing Inventory
Given data:
Opening Inventory (December 1, 2009): $210,000
Purchases: $1,400,000
Purchases Returns and Allowances: $20,000
Purchases Discounts: $18,500
Closing Inventory (November 30, 2010): $185,000
Freight In: $14,100
Substituting the values into the formula:
Cost of Merchandise Sold = $210,000 + $1,400,000 + $14,100 - $20,000 - $18,500 - $185,000
Cost of Merchandise Sold = $1,400,600
b. Gross Profit can be calculated using the formula:
Gross Profit = Sales - Cost of Merchandise Sold
Given data:
Sales: $2,250,000
Cost of Merchandise Sold: $1,400,600
Substituting the values into the formula:
Gross Profit = $2,250,000 - $1,400,600
Gross Profit = $849,400
for more question on income
https://brainly.com/question/30157678
#SPJ11
It is predicted that nominal interest rates set by the central bank will increase in the coming months. Households have a greater amount of mortgage debt and own a greater amount of housing assets than in the past. Explain how this increased level of debt and increased housing wealth will affect the transmission of monetary policy.
It is predicted that nominal interest rates set by the central bank will increase in the coming months. Households have a greater amount of mortgage debt and own a greater amount of housing assets than in the past. The increased level of debt and increased housing wealth will affect the transmission of monetary policy in several ways. First, an increase in interest rates will lead to a decrease in consumer spending, which will slow down the economy. Second, it will increase the cost of borrowing, which will make it more difficult for households to pay off their debts. Third, it will decrease the value of housing assets, which will lead to a decline in wealth for households that own these assets.
The increase in interest rates will lead to a decrease in consumer spending because it will make borrowing more expensive. This will lead to a reduction in demand for goods and services, which will slow down the economy. Households will be less likely to take out loans to buy cars, furniture, and other items. Instead, they will save their money or pay off existing debts.
The increase in interest rates will also make it more difficult for households to pay off their debts. Those with variable rate mortgages will see their monthly payments increase, which could put a strain on their finances. Households with other forms of debt, such as credit card debt, will also face higher interest rates, making it more difficult to pay off their debts.
Finally, an increase in interest rates will decrease the value of housing assets. This will lead to a decline in wealth for households that own these assets. This could lead to a reduction in consumer spending, as households will have less money to spend on other items. It could also lead to a decline in confidence, as households may feel less secure about their financial situation.
To know more about the nominal interest rates, click here;
https://brainly.com/question/32530068
#SPJ11
Nikhil earns $1500 a month. For simplicity let’s say there are two goods in this economy, fun activities (f) with price p, and necessities (n) with price p.
a) Write down his utility maximization problem for one month.
b) One month, Nikhil gets an unexpected gift of $100 in cash. Write down his utility maximization problem for that month.
c) Why is typically assumed that under the rational model that people are always better off receiving a gift of cash?
a) Nikhil's utility maximization problem is to maximize U(f, n) subject to $1500, b) When Nikhil receives a $100 gift, his utility maximization problem becomes maximizing is $1500 + $100. c) It is better off receiving cash gifts because it provides flexibility and allows individuals to allocate funds according to their preferences, maximizing their own utility.
a) Nikhil's utility maximization problem for one month can be represented as
Maximize U(f, n) subject to p_f * f + p_n * n = $1500
Where U(f, n) is the utility function representing Nikhil's preferences for fun activities (f) and necessities (n), p_f and p_n are the prices of fun activities and necessities respectively, and the constraint represents Nikhil's budget constraint.
b) Nikhil's utility maximization problem for the month when he receives an unexpected gift of $100 in cash can be represented as:
Maximize U(f, n) subject to p_f * f + p_n * n = $1500 + $100
The budget constraint is now modified to include the additional $100 gift, allowing Nikhil to allocate his income differently for that month.
c) It is typically assumed that people are always better off receiving a gift of cash under the rational model because cash provides maximum flexibility and freedom of choice. With cash, individuals can use the money to purchase any goods or services according to their preferences and needs.
This allows them to allocate the funds in a way that maximizes their own utility, rather than receiving a specific gift that may not align with their preferences. Cash provides the recipient with the opportunity to make decisions based on their own unique circumstances and desires, leading to potentially greater satisfaction and utility.
To know more about utility maximization:
https://brainly.com/question/32296953
#SPJ4
What are the limitations of online marketing for events, and
what advantages are there in supplementing them with traditional
promotional interventions? (150-200 words)
Online marketing for events has revolutionized the events industry. However, there are several limitations of online marketing that may affect its effectiveness.
These limitations include lack of personalization, lack of a physical connection with the audience, and inability to cater to non-digital audiences.Advantages of supplementing online marketing with traditional promotional interventions
There are several advantages of supplementing online marketing with traditional promotional interventions, including:
1. Wider reach
Online marketing is a great way to reach a large number of people. However, traditional promotional interventions like TV and radio ads, flyers, billboards, and posters, can reach audiences who are not digitally inclined.
Combining online marketing with traditional promotional interventions, therefore, increases the reach of an event.
2. Greater personalization
One of the limitations of online marketing is that it lacks personalization. However, traditional promotional interventions can be personalized to cater to specific audiences. For example, flyers can be designed to target specific demographics, while billboards can be placed in specific locations
.3. Tangibility
Physical marketing materials like posters, flyers, and billboards can create a more tangible connection with the audience
Learn more about online marketing at:
https://brainly.com/question/31366407
#SPJ11
what compromises would you be prepared to make if your lifestyle goals and the salary you are offered for your ideal job aren't a good match
When your ideal job or salary isn't a match for your lifestyle goals, it's important to determine which of those goals and objectives you are willing to compromise on.
It could be possible to negotiate for a higher salary to compensate for other lifestyle considerations, such as a flexible working schedule, remote working opportunities, or better benefits. It might also be possible to reduce cost of living, such as relocating to a cheaper area or living with roommates. Ultimately, it is important to consider which goals and values are non-negotiable, and be prepared to explore other compromises to achieve a reasonable balance. When one's lifestyle goals and the offered salary for their ideal job aren't a good match, it is important to remember that there may be compromises that can be worked out. I would be prepared to make compromises such as re-negotiating certain terms in the job offer, such as the number of working hours or vacation days, or taking fewer benefits for a higher salary. Additionally, I could look for ways to supplement my income such as seeking additional part-time work, freelancing, or performing side gigs to reach my lifestyle goals. By making these compromises, I believe I can bridge the gap between my ideal job and the salary offered.
Learn more about lifestyle goals here:
https://brainly.com/question/31925612
#SPJ11
The following information relates to Zara Co Beginning inventory 238 units at $3 each Purchases 60 units at $7 each At the end of the period, Zara Co., had 37 units left in inventory. Zara Co., sold the remaining units for $21 each. If Zara Co. used the weighed average costing model, what is the cost of goods sold? Do not round your unit cost.
if Zara Co. used the weighted average costing method, its cost of goods sold would be $994.41.
Under the weighted average costing method, the cost of goods sold is calculated by taking the weighted average cost per unit of all units available for sale during the period and multiplying it by the number of units sold.
In this case, Zara Co. had a beginning inventory of 238 units at $3 each and purchased an additional 60 units at $7 each.
The total cost of all units available for sale = Number of units × cost of each unit
= (238 × $3) + (60 × $7)
= $714 + $420
= $1,134.
The total number of units available for sale = 238 + 60
= 298 units.
The weighted average cost per unit = total cost of all units / total number of units
= $1,134 / 298
= $3.81.
At the end of the period, Zara Co. had 37 units left in inventory,
During the period they sold = total number of units - units left in inventory
= 298 - 37
= 261 units.
The cost of goods sold = 261 × $3.81
= $994.41.
Therefore, if Zara Co. used the weighted average costing method, its cost of goods sold would be $994.41.
To learn more about weighted average costing:
https://brainly.com/question/29600315
#SPJ4
TRUE/FALSE. The difference between total sales and total variable expense is
called contribution margin.
True, The difference between total sales and total variable expenses is called the contribution margin.
The contribution margin represents the amount of revenue remaining after deducting variable expenses. It is calculated by subtracting the total variable expenses from the total sales.
The contribution margin represents the portion of sales revenue that contributes to covering fixed costs and generating profits. It is a useful measure for analyzing the profitability of products or services and assessing the impact of changes in sales or variable expenses on the overall financial performance of a business.
Learn more about contribution margin at
https://brainly.com/question/29674918
#SPJ4
Develop a statement using the criteria of equity and effeciency in taxation to assert whether or not Americans are overtaxed.
Americans are not overtaxed; the tax system needs reforming to ensure that it is both equitable and efficient.
Equity and efficiency are two principles that determine the effectiveness of taxation. Equity refers to the fairness and justice of the tax system, while efficiency refers to the ability of the tax system to achieve its intended goals. To determine if Americans are overtaxed, we must evaluate whether the current tax system meets these two principles.
The United States of America is often described as the country of the American Dream, where citizens have the opportunity to achieve great wealth and success through hard work and determination.
The tax system should reflect the principles of fairness and justice, ensuring that the wealthiest citizens contribute more to the economy and society's growth than the less wealthy. The principle of equity requires that the tax system is progressive, which means that the wealthiest individuals pay a higher proportion of their income as taxes than those with lower incomes.
The US tax system, however, is not progressive; in fact, it is regressive, meaning that the poor pay a higher percentage of their income as taxes than the rich.To determine whether Americans are overtaxed or not, we must also consider the principle of efficiency.
Tax rates that are too high can reduce economic growth and lead to a decline in living standards. Tax rates that are too low can lead to a deficit and result in a less effective government.Americans are not overtaxed; the tax system needs reforming to ensure that it is both equitable and efficient.
Learn more about tax -
brainly.com/question/30157668
#SPJ11
Assume the mpc is 0.75. If autonomous consumption increases by $0.8 trillion- ceteris paribus- the overall change in real GDP would be equal to:
A. a decrease of $2.4 trillion
B. a decrease of $0.6 trillion.
C. an increase of $3.2 trillion.
D. an increase of $0.6 trillion.
E. an increase of $2.4 trillion.
The mpc is 0.75. If autonomous consumption increases by $0.8 trillion- ceteris paribus- the overall change in real GDP would be equal to: increase of $1.064 trillion.
The correct answer is option F.
To determine the overall change in real GDP when autonomous consumption increases, we can use the concept of the multiplier effect in economics. The multiplier effect measures the impact of changes in autonomous spending on the overall economy.
The multiplier (k) is calculated as the reciprocal of the marginal propensity to consume (MPC). In this case, the MPC is given as 0.75, so the multiplier would be 1 / 0.75 = 1.33 (rounded to two decimal places).
The formula to calculate the overall change in real GDP (ΔY) is:
ΔY = Multiplier * Change in Autonomous Spending
Given that the change in autonomous consumption is $0.8 trillion, we can calculate the overall change in real GDP:
ΔY = 1.33 * $0.8 trillion = $1.064 trillion
Therefore, the overall change in real GDP would be an increase of $1.064 trillion.
For more such information on: GDP
https://brainly.com/question/1383956
#SPJ11
The question probable may be:
Assume the mpc is 0.75. If autonomous consumption increases by $0.8 trillion- ceteris paribus- the overall change in real GDP would be equal to:
A. a decrease of $2.4 trillion
B. a decrease of $0.6 trillion.
C. an increase of $3.2 trillion.
D. an increase of $0.6 trillion.
E. an increase of $2.4 trillion.
F. an increase of $1.064 trillion