The only way the store can meet the required financial ratios agreed on with the bank is to change from LIFO to FIFO. In which of the following cases would it necessarily be true that national saving and private saving are equal for a closed economy? b. What can the government do to increase the credibility of announced policy changes? Safe Travel is concerned with the high upfront cost of inspecting all 200,000 units. Daspal Technology is..Learn More, Daspal Technology has been a forerunner in enabling the IT transformation of businesses across the..Learn More, Most of the enterprises are at present shifting towards the custom software solutions rather than..Learn More, Daspal Technology offers the best cloud services to a number of customers ranging from start-ups to..Learn More, Daspal Technology is the trusted and leading name in the business which offers a range of IT solutions..Learn More, Daspal Technology is a reputed Information Technology firm that takes pride in offering consulting services..Learn More, Internet of Things or IoT concept is transforming the global business space in a rapid manner. d. the nominal exchange rate defined as Polish currency per dollar falls. Explain why corporate bonds always yield more than Treasury bonds and why BBB-rated bonds always yield higher than AA-rated bonds. By controlling the money supply, increasing money supply to stimulate the economy. a. your nominal wage increase. T/F. the reason for the "crossover" of M2 and the GDP Deflator depicted in Figure 4. d. Explain why this situation is similar to the time inconsistency problem faced by monetary policymakers. d. the unemployment rate would be lower and the labor-force participation rate would be unaffected. If the central bank wanted to offset the effect of this on the size of the money supply, it could have bought bonds. The would also demand a higher premium to compensate for lack of liquidityInformation Costs: Spending time and money acquiring information on a bond reduces the expected returnTaxation Different investments are taxed differently. The example with Abby. However, the bondholders do have some protection in case of liquidation. What happens to market-clearing, or equilibrium, interest rates in a capital market when the supply of funds declines? This increase in pay makes. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing? Consequently, people wanted to hold relatively more in currency and relatively less in. Identify total cost of quality by category (appraisal, internal failure, and external failure). Satchel loses his job and immediately begins looking for another. If the price of ice cream cones rises, to maintain the real value of her money holdings she needs to hold more dollars. Bigego proclaims that more people are working now than when he took office. b. either a rise in output or a fall in velocity. The long-run, but not the short-run, aggregate supply curve is consistent with the idea that nominal variables do not affect real variables. No record of the owner's identity is kept by the corporation. Shipping costs are $8.00 per car seat, and repair costs are$1.00 per car seat. If you..Learn More. A loan agreement the store has with its bank, its prime source of financing, requires the store to maintain a certain profit margin and current ratio. There are three major facts regarding term structure: Interest rates on long-term bonds are usually higher than interest rates on short-term bonds. Tom has a law degree. b. households want to lend more, so the interest rate falls, making the quantity of goods and services demanded rise. Bonds that are rated Baa or better by Moody's (or rated as BBB or better by Standard & Poor's) are referred to as: Bonds that were initially released as investment grade, but were later reclassified as junk bonds are known as: a short term loan issued on a discount basis. If people decide to hold more currency relative to deposits, the money supply. If Sportz no longer operated its own IT department, 30% of the fixed cost of the IT department could be eliminated. The store originally decided on LIFO because of its tax advantages. Interest rates on short-term bonds are occasionally higher than interest rates on long-term bonds. A. Molly holds $60. Other things the same, a decrease in the U.S. interest rate. \text{Shoes} & \text{7,920} & \text{176}\\ The interest rate in Northlandia will rise. C. Capital will flow into Northlandia. Consider the following sequence of events: d. aggregate-demand curve slopes downward. Allow people with small amounts of money to diversify, Year-to-year fluctuations of unemployment around its natural state, Number of people employed plus the number of people unemployed, Which f the following would be counted as unemployed according to official statistics, A person is counted as unemployed by Statistic Canada is, Statistics Canada defines the unemployment rate as the percentage of, Adults have higher labour force participation rates and lower unemployment rates than do teenagers. Another 1% of the 200,000 car seats had problems with the stitching, but the internal inspection did not discover them. Original capitalized value of the asset minus any depreciation/amortization/depletion. In the special case of the 100-percent reserve banking the money multiplier is, A central bank can decrease the money supply by conducting open-market. Suppose that velocity rises while the money supply stays the same. In general, as a person includes fewer stocks and more bonds in his portfolio, Abby buys health insurance because she knows that she has health risks that wouldn't be obvious to an insurance company. It is considering an alternative internal inspection plan that will cost only$3.00 pre car seat inspected. After investors have responded to the announced tax reduction, does the government have an incentive to renege on its policy? a. cyclical unemployment amounting to 0.5 percent of the labor force. c. What is the probability four or more name chocolate? If short-term interest rates are lower than long-term rates, why might a borrower still choose to finance with a long-term debt? The total costs of the support departments (IT and HR) are allocated to the production departments (clothing and shoes) using a single rate based on the following: Information technology: Number of IT labor-hours worked by department Human resources: Number of employees supported by department Data on the bases, by department, are given as follows: c. a higher interest rate because it has more risk. Sheamous loses his job and decides to sit on the beach rather than look for work during the next few months. In a closed economy, what does (Y - T - C) represent? Other things the same, as the maturity of a bond becomes longer, the bond will pay. In which case do these changes both make it less likely that they will now build the store? Compared to stocks, bonds offer the holder. He transfers $2,100 from his checking account to his savings account. Unemployment of this type is called structural. \text{Department} & \text{IT Hours Used} & \text{Number of Employees}\\ Other things the same, the unemployment rate. We explore & analyses the requirements & challenges of each industry individually. Many years ago, Peggy paid $500 to put together a record collection. \text{Human resources} & \text{6,000} & \text{-}\\ A country has $1.5 billion dollars of domestic investment and net exports of $2 billion. According to the equation of exchange, the price level would change less than proportionately with a rise in the money supply if there were also. Explain. d. fell. The GDP deflator is NOT a fixed-quantity price index, but the CPI is. What is the formula for Depreciation Expense. Many residents of Oakwood, a small town, have asked to have the towns swimming pool kept open for eight hours each day during the summer instead of only six hours. d. The government's tax revenue is equal to its expenditures. Briefly explain why bonds that have the same maturities often do not have the same interest rates. 3. If saving is greater than domestic investment, then. Your boss gives you an increase in the number of dollars you earn per hour. The stores owner is currently looking over Golf Challenges preliminary financial statements for its second year. Horngren's Cost Accounting: A Managerial Emphasis, Frank Hodge, Patricia A. Libby, Robert Libby, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder, Jocelyn sells short 1000 shares of JKLO stock at $31.25 per share and six months later purchases the shares at $29 each. Whether developing new business models or managing enhanced cost pressure, We are redefining.. With the evolution of new opportunities in the field of Education, there are new mediums and.. Finance and banking institutions have started to rewrite their future with digital technologies, and this.. Real estate value can be easily driven by location but the digital disruptions into this indicate that the real.. Which of the following is not a determinant of the long-run level of real GDP? a. for those who save than for those who borrow. Hardwood Furniture Store considered building a store in a new location. If these individuals were counted as unemployed instead of out of the labor force, then. \text{Information Technology} & \text{-} & \text{184}\\ This means that. \text{Human resources (HR)} & \text{800} & \text{2,000} & \text{2,800}\\ The sum of the marginal benefit or demand curve should slope downward from left to right and intersect the marginal cost above eight hours of daily operation. What is the probability exactly four of those in the sample name chocolate? A graph showing the relationship between bond yields and maturities. They involve no pledge of specific property. Should Sportz outsource its IT services? Explain. c. increases and the labor-force participation rate is unaffected. In order to devote all her efforts to college, she didn't hold a job. Which of the following is correct? According to purchasing-power parity, if prices in the United States increase by a larger percentage than prices in Poland, then. If purchasing power parity holds, when a country's central bank increases the money supply, its. Does the interest rate on a T-bond include a default risk premium? b. increases the interest rate and so investment spending decreases. Negative publicity will result in a loss of future contribution margin of $100 for each external failure. The increase will be larger the smaller the reserve ratio is. Bonds issued to a party whose name is listed in the corporation's records. If these persons were counted as employed, then. Adjust and restate prior year's financial statements, 4. The owner recalculates ending inventory using FIFO and submits those numbers and statements to the loan officer at the bank for the required bank review. Inspection costs $5.00 per car seat, and repairs cost$1.00 per car seat. Unsecured bonds backed only by a corporation's general credit. The following shows costs (in thousands) for each manufacturing facility and for each support department. E. elastic demand . The income statement for Electronic Wonders reports net sales of $91,758 million and cost of goods sold of$69,278 million. Both frictional and structural unemployment. What factors other than cost schuld Safe Travel consider before changing inspection techniques? There is evidence that the rate at which money changed hands rose during the German hyperinflation. Provide several examples of items you had to do without because of limited resources, and explain how you adjusted to this situation. What key assumptions underlies the pure expectation theory? Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use. c. the waste of resources used to maintain lower money holdings. $$ a. the price level is higher than expected making production more profitable. How does scarcity affect your life? However, soon after they made this decision, both the interest rate and the cost of building the store changed. Daspal Technology Services. The Fed could lessen the impact of this by buying Treasury bonds. Discuss the merits of this exclusion. Other things the same, if workers and firms expected inflation to be 2%, but it is only 1% then, A decrease in the expected price level shifts short-run aggregate supply to the. Ignoring brokerage fees, Nancy will. a. sales or by raising the discount rate. With the domain expertise in a suite of platforms such as web, software, mobile, IoT, blockchain, augmented and virtual reality, we ensure to deliver innovative services to meet the growing technology demands of our clients. Suppose ice cream cones costs $3. That is, can it set rates at any level it chooses? The relationship among the interest rates on bonds that are otherwise similar but that have different maturities. A recent survey, 35 percent indicated chocolate was their favorite flavor of ice cream. d. Bob is structurally unemployed, and Tom is frictionally unemployed. c. Given your answer to part (b), would investors believe the governments announcement? T/F: Inflation does not in itself reduce people's real purchasing power. What are national saving and investment for this country? Our industry-specific experience, commitment to quality and in-depth knowledge in technology has empowered us to deliver superior services across multiple industries such as healthcare, ecommerce, media, retail, travel, food, logistics, real estate, finance and bank. How does this sale affect current GDP? Given the situation depicted in the graphs, which of the following will happen? If these individuals were counted as out of the labor force instead of as unemployed, then. If so, you are the right place. D. inelastic demand. Some states exclude necessities, such as food and clothing, from their sales tax. How does positive expectations of future markets effect the Loanable funds market? If inflation rate is expected to remain constant at the current level in the future, would the yield curve slope up, slope down, or be horizontal. C. unit-inelastic demand. Maturity Risk Premium always increases with maturity. Draw a graph that shows the efficient level of swimming-pool hours per day to be eight hours. \text{Total costs} & \text{\$13,000} & \text{\$31,000} & \text{\$44,000}\\ Today, she sold her albums at a garage sale for$100. What grade of funds can Pension funds only invest in? You need interest rates and years to maturity. Which of the following is the correct way to compute the future value of $X that earns r percent interest for N years? b. b. decreases the money multiplier and decreases the money supply. He knows that the state sales tax rate is 4.22 percent. Other things the same, an increase in the price level makes the dollars people hold worth. Some persons are counted as out of the labor force because they have made no serious or recent effort to look for work. The effect of an increase in the price level on the aggregate-demand curve is represented by a. c. movement to the left along a given aggregate-demand curve. The numbers are not favorable. A central bank increases the reserve requirement, but it wants to offset the effects on the money supply. 1. If your nominal wage rose by a greater percentage than the price level, then your real wage also increased. As prices rise you notice you give up fewer goods to make your payments. If purchasing-power parity holds, then the value of the. c. there is a trade surplus and Y > C + I + G. Other things the same, if a country has a trade deficit and saving rises. Reasons that make CRM systems important: Why Zoho CRM is in the hype now. You observe a closed economy that has a government deficit and positive investment. a. What four fundamental factors affect the cost of money? What accounts for the difference? The coupons are, in effect, checks payable to the bearer. A person's net worth is the difference between the value of the items she/he owns and the amounts he/she owes to others. Economic theory and Empirical evidence indicate that: Long-term bonds generally provide lower interest rates than do short-term bonds. According to purchasing-power parity the U.S. dollar. The store is at the end of its second year of operation and is struggling. Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called, Wages in excess of their equilibrium level help explain. How does a foreign fiscal expansion affect domestic output if the domestic central bank does not change the policy rate? B. d. Numerous students graduate from college and immediately begin new jobs. Safe Travels only problem with its car seats was stitching in the straps. Private saving is positive; public saving is negative. If the governments expenditures exceeded its receipts, it would likely. More risky than short-term bonds and so pay higher interest. Ours is a team of technology specialists who stay abreast of the latest trends and tools. April, who currently owns stock in four companies, has decided to expand her portfolio by purchasing stock in virtually every company that sells stock. In December 1999 people feared that there might be computer problems at banks as the century changed. b. right, and an increase in the actual price level does not shift short-run aggregate supply. More default and liquidity risk on long-term bonds than short-term bonds (Coca-Cola). a. falls. Which of the following shifts aggregate demand to the left? 2. How doe the Fed stimulate the economy? Who makes the decisions in free market economy, True or False: The mix of variable costs and fixed costs that a business faces affects the way the business operates, profit motive, open opportunity, legal equity, private property rights, free contract, voluntary exchange. \begin{matrix} b. increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public. Pander says that the unemployment rate is higher now than when Bigego took office. After an unsuccessful search, some of the laid-off workers quit looking for new jobs. Which of the following should it do? Creditors must be paid in full before stockholders can receive anything. A candidate for political office announces the following policies which, he says, economics clearly demonstrates will lead to higher output in the long run: 1. reduce immigration from abroad 2. make trade more open between the US and other countries: d. 1 shifts long-run aggregate supply left, 2 shifts long-run aggregate supply right. Economists use labor-market data to evaluate how well an economy is using its most valuable resource its people. How does Golf Challenges use of FIFO improve its net profit margin and current ratio? What is its saving? The claims of creditors, including bondholders, rank above those of stockholders. $$ At Daspal, we aim to deliver customized and user-friendly web, software and mobile solutions that connect your business with todays technology. b. Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. d. increases when the interest rate increases, so people desire to hold less of it. c. decreases, the money multiplier increases, and the money supply increases. Which factor determines how much will be saved at different interest rates? The bank could lessen the impact of this by selling Treasury bonds. The problem of time inconsistency applies to fiscal policy as well as to monetary policy. Other things the same, if the price level is lower than expected, then some firms believe that the relative price of what they produce has. Distinguish between the real risk free rate of interest, and the nominal (quoted) risk free rates of interest. Borrowers bid for the available supply of debt capital using interest rates: The firms with he most profitable investment opportunities are willing and able to pay the most for capital. The amount the corporation must pay for the bond when it is called. \text{Information Technology (IT)} & \text{\$1,200} & \text{\$4,000} & \text{\$5,200}\\ What is the significance of this fact? Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If monetary neutrality holds the rise in velocity decreased the ratio M/P. The other 2.5% will be detected after car seats are sold and shipped. Suppose also that the price elasticity of demand for cigarettes is 1.2 and the price elasticity of supply is 0.7. The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected. The owners and their accountants decided that this was the profitable thing to do. Other states do not. In which of the following cases is the present value of this payment the lowest? . b. net capital outflow rises, so the trade deficit decreases. 1. The maturity risk premium reflects the net effects of those two opposing forces. Decreases the job search effort of the unemployed, Economists have found evidence that receiving unemployment insurance benefits, Franklin Allen, Richard A. Brealey, Stewart C. Myers. 2. c. real exchange rate is equal to one. The costs of changing price tags and price listings are known as, Wealth is redistributed from creditors to debtors when inflation was expected to be, When the money market is drawn with the value of money on the vertical axis, an increase in the price level causes a. d. movement to the right along the money demand curve. Using the direct method, calculate (1) cash received from customers and (2) cash paid to suppliers. In doing so, April will. Unemployment would decrease and prices increase if. As investors move money out of the market interest rates are forced up. & \text{Variable Costs} & \text{Fixed Costs} & \text{Total Costs by Department}\\ What is the real value of the money she holds? In which of the following situations must national saving rise? A proof of equality of debits and credits in a general ledger. What are the total costs of quality for the alternative technique? The retail industry is embracing the power of IoT, enterprise mobility and Blockchain rapidly than ever. You conclude that. a. This action. d. neither an increase in the price level that is greater than expected nor an increase in the expected price level. When the dollar depreciates, each dollar buys. What are the two items whose sum is the cost of equity? In a closed economy, what does (Y - T - C) represent?