Answer:
a. all units produced are sold.
Explanation:
Cost-volume-profit analysis is also known as breakeven analysis. It is an analysis that review the point or number of units a company must sell for the revenue or sales to equate the total cost. In other words, the point the company neither makes a profit nor a loss.. The assumptions of this analysis are;
(i) The total costs are recognized as fixed and variable. Where as in reality, some costs may be semi-variable cost.
(ii) It assumes a linear relationship between costs and sales.
(iii) The selling price per unit of the product is constant.
Dobles Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity
Assembly $228,060 18,000 mahcine hours
Processing orders $34,068 1200 orders
Inspection $125560 1720 inspection hours
The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit.
According to the activity-based costing system, the unit product cost of product D28K is closest to:
a. $95.34 per unit
b. $93.60 per unit
c. $74.32 per unit
d. $89.93 per unit
Answer:
Hence the correct option is option (a) i.e. $95.34 per unit.
Explanation:
Cost of 420 units of D28K product = 460 machine hour cost + 80 order cost + 10 inspection hour cost + 420 direct materials cost + 420 direct labor cost.
18000 machine hours = 228060
so 460 machine hours = 228060 x 460 /18000 = 5828.2
1200 orders = 34068
80 orders = 80 x 34068 / 1200 = 2271.2
1720 inspection hours = 125560
10 inspection hours = 10 x 125560/1720 = 730
So cost of 420 units of D28 products = 5828.2 + 2271.2 + 730 + 420 x 48.96 + 420 x 25.36
=40043.8
So cost of 1 D28K product = 40043.8 / 420 = 95.34
When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred, then the lowest acceptable transfer price as far as the selling division is concerned is:
Answer: c. the market price charged to outside customers
Explanation:
When a division is able to sell its products to customers outside the company for a certain price but instead has to transfer these to another division in the company, the minimum transfer price will have to be the selling price to the customers outside so that the division would not make losses.
The division that this good is transferred to will then reflect the cost of acquiring the goods as that selling price. This cost will be accounted for when the new division wants to sell their own goods that way this cost will be recuperated on a company level.
What are the process of microeconomics?
Answer:
Microeconomics is the study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. Individual actors are often grouped into microeconomic subgroups, such as buyers, sellers, and business owners.
Explanation:
Define the advantages that the law affords affords to business corporations. In view of the many advantages that the law affords affords to business corporations, what additional responsibilities or obligations if any should a business corporation have to the public. If you were advising a client on picking a business form explain why a corporation would be a good choice. Also explain why a corporation would be a bad choice.
The following are the benefits that the law provides to business corporations:
Personal property protection- because the proprietors will have limited accountability for the debts of the company and commitments, lenders will not go for their property funds if the firm cannot give them the money.It is simple to obtain funds by selling stock, allowing the firm to develop by acquiring additional investors.The following are extra responsibilities that a business entity has to the public:
The business company is required to practise Corporate Responsibility, often referred as CSR, which is defined as the public's legal, moral, or political demand of a corporate enterprise. This indicates that the organisation will engage in certain ethical, moral, and charitable actions to assist better the lives of the people in the communities where they operate.This can take the shape of building roads, clinics, schools, bridges, planting trees, or any other operation that benefits society but does not generate a return for the business.
Learn more:
https://brainly.com/question/19793205?referrer=searchResults
34.Mr. Hoffman has always been cautious with his money, but over the past two weeks he has developed grandiose plans to bet his entire life savings on a single horse race. With unrestrained exuberance he has also been giving everybody he sees unsolicited advice on how to make millions in the stock market. Mr. Hoffman's behavior is most indicative of
Answer:
mania
Explanation:
From the question we are informed about Mr. Hoffman who has always been cautious with his money, but over the past two weeks he has developed grandiose plans to bet his entire life savings on a single horse race. With unrestrained exuberance he has also been giving everybody he sees unsolicited advice on how to make millions in the stock market. Mr. Hoffman's behavior is most indicative of mania. Mania can be regarded as psychological condition which is responsible for a person to be experiencing intense moods,delusions as well as unreasonable euphoria and hyperactivity. Mania can also be regarded as manic episodes, and this is a symptom of bipolar disorder, one that is experiencing this may not be able to sleep very well or eat well, they have experience of hallucinations as well as some perceptual disturbances.
Blackwell, Inc. has a $125,000 liability it must pay five years from today. The company is opening a savings account so that the entire amount will be available when this debt needs to be paid. The plan is to make an initial deposit today and then deposit an additional $30,000 each year for the next three years, starting one year from today. The account pays a 5 percent rate of return. How much does the firm need to deposit today
Answer:
Initial investment= $23,838.78
Explanation:
Giving the following information:
Future Value (FV)= $125,000
Number of periods (n)= 5
Interest rate (i)= 5%
First, we need to calculate the future value of the three deposits using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {30,000*[(1.05^3) - 1]} / 0.05
FV= $94,575
Difference= 125,000 - 94,575= $30,425
Now, the initial investment today:
FV= PV*(1 + i)^n
Isolating PV:
PV= FV / (1 + i)^n
PV= 30,425 / (1.05^5)
PV= $23,838.78
All companies try to have happy workers as they know the relationship between satisfaction and performance. This is why they are focusing on motivating their employees in a variety of ways. From what you have learned please suggest what companies should do to have a working place that could effectively motivate their employees.
Answer:
1. Reward and incentivize workers
2. Set smaller weekly or biweekly goals for them.
3. Foster trust between the managers and workers.
Explanation:
In order to have workers who are motivated to put in their best in the company, employers should take certain positive actions. These actions include;
1. Reward and incentivize workers: Rewards which could be monetary, as word of praise, or formal recognition can move workers to give their best. Humans are motivated when their efforts are recognized and praised. Therefore, incentivizing workers is a good way to get them motivated.
2. Set smaller weekly or biweekly goals for them: Setting humongous goals and targets can scare off and pressurize the workers. But when these large goals are broken into smaller goals, they can then be motivated to reach those goals.
3. Foster trust between the managers and workers: When workers have a sense of belonging and know that they are trusted, they will be in a more relaxed frame to achieve their goals. Unwarranted allegations and suspicions can put the workers on edge.
Cash Short and Over Entries
Listed below are the weekly cash register tape amounts for service fees and the related cash counts during the month of July. A change fund of $100 is maintained.
Date Change Fund Cash Register Actual Cash
Receipt Amount Counted
July 2 $100 $281.80 $379.00
July 9 100 311.50 411.50
July 16 100 304.10 406.90
July 23 100 318.20 416.00
July 30 100 293.60 397.50
1. Determine the ending balance of the cash short and over account.
2. Does it represent an expense or revenue?
Answer:
1. Ending balance of cash short and over account:
Ending cash = 100 beginning balance + Cash register amount - Actual cash counted
July 2 = 100 + 281.80 - 379.00
= $2.80 shortage because actual cash is less than it should be
July 9 = 100 + 311.50 - 411.50
= $0
July 16 = 100 + 304.10 - 406.90
= $2.80 surplus because actual cash is more
July 23 = 100 + 318.20 - 416.00
= $2.20 shortage
July 30 = 100 + 293.60 - 397.50
= $3.90 surplus
Balance = Surplus - shortages
= (3.90 + 2.80) - (2.80 + 2.20)
= $1.70
2. This is revenue because it is a surplus.
Bearington Enterprises uses an activity-based costing system to assign costs in its auto-parts division.
Activity Est. Indirect Activity Costs Allocation Base Cost Allocation Rate
Materials $60,000 Material moves $5.00/move
Assembling $175,000 Direct labor hours $5.00/dir. labor hour
Packaging $70,000 # of finished units $2.50/finished unit
The following units were produced in December with the following information:
Part # # Produced Materials Costs # Moves Dir. Labor Hrs.
Part 001 1,350 $2,500 100 500
Part 002 5,500 $5,000 400 200
Part 003 4,050 $7,000 2,800 1,550
Total manufacturing costs for Part 003 are : _______
Answer:
the Total manufacturing costs for Part 003 is $38,875
Explanation:
The computation of the Total manufacturing costs for Part 003 is given below:
= material cost + indirect cost
= $7000 + (2,800 × $5) + (1550 × $5) + (4,050 × $2.50)
= $7,000 + $14,000 + $7,750 + $10,125
= $38,875
Hence, the Total manufacturing costs for Part 003 is $38,875
The same should be considered and relevant
Tamarisk, Inc. issued 20800 shares of $1 par common stock for $40 per share during 2022. The company paid dividends of $50000 and issued long-term notes payable of $458000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows
Answer:
$1,240,000
Explanation:
Calculation to determine the amount of cash flows from financing activities will be reported on the statement of cash flows
Cash flow from Financing activities
Issue of common stock $832,000
(20800 shares × $40)
Add Issued of long term notes payable $458,000
Less: Dividend paid -$50,000
Net Cash flow from Financing activities $1,240,000
Therefore the amount of cash flows from financing activities will be reported on the statement of cash flows is $1,240,000
Unearned Revenue: The company collected $24,000 rent in advance on September 1,
debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12
months' rent in advance and occupancy began September 1. Answer the four questions
below as of 12/31. Whenever you see the word "unearned," it always indicates a liability
account. Most liability accounts include the word "payable," as those liabilities will be
paid back. An unearned account is a liability that will be worked off, rather than paid
off.
1. The beginning balance of Unearned Revenue: (5 pts)
Answer:
Time period from September 1 - December 31 is 4 months and this means that the tenant has occupied the place for 4 months. Hence, 4 months rent would be accrued.
12 Month rent amount = $24,000
Per month rent amount = $240,00/12 month = $2,000
So, Rent for 4 months = 4 month * $2,000 = $8,000
Adjusting Entry
Date Account titles Debit Credit
Dec 31 Unearned Rent Revenue $8,000
Rent Revenue $8,000
A project has an initial cost of $44,000. Expected cash flows as a result of this project are projected as follows. Calculate the payback period for this project. Assume a discount rate of 9%.
Answer:
3.5 year
Explanation:
The computation of the payback period is given below:
Year Cash Inflow Cumulative Cash Inflow
1 $10,000 $10,000
2 $10,000 $20,000
3 $15,000 $35,000
4 $18,000 $53,000
Now the payback period is
= 3 year + ($53,000 - $44,000) ÷ $18,000
= 3 year + 0.5
= 3.5 year
You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 7.5 percent, and the bond account will pay 5.5 percent. When you retire, you will combine your money into an account with a 2.5 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period?
a. 5.545.73.
b. 6,081.31.
c. 5,870.85.
d. 6.205.66
Answer:
Monthly withdraw= $5,870.6
Explanation:
Giving the following information:
Stock:
Monthly deposit= $700
Interest rate= 0.075/12= 0.00625
Number of periods= 30*12= 360
Bond:
Monthly deposit= $400
Interest rate= 0.055/12= 0.0045833
Number of periods= 30*12= 360
First, we need to calculate the value of the investment at the moment of retirement:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
Stock:
FV= {700*[(1.00625^360) - 1]} / 0.00625
FV= $943,211.797
Bond:
FV= {400*[(1.00458^360) - 1]} / 0.00458
FV= $365,447.415
Total FV= $1,308,659.212
Now, the monthly withdrawal:
Interest rate= 0.025/12= 0.002083
Number of periods= 25*12= 300
Monthly withdraw= (FV*i) / [1 - (1+i)^(-n)]
Monthly withdraw= (1,308,659.212*0.002083) / [1 - (1.002083^-300)]
Monthly withdraw= $5,870.6
Dextra Computing sells merchandise for $16,000 cash on September 30 (cost of merchandise is $11,200). Dextra collects 9% sales tax. Record the entry for the $16,000 sale and its sales tax. Also record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.
Answer:
See journal entries under the explanation below:
Explanation:
The journal entries will look as follows:
Dextra Computing
Journal Entries
Date Particulars Debit ($) Credit ($)
Sep 30 Cash 17.440
Sales 16,000
Sales Taxes Payable ($16,000 * 9%) 1,440
(To record the cash sale and 9% sales tax)
Cost of Goods Sold 11,200
Merchandise Inventory 11,200
(To record the cost of sales.)
Oct 15 Sales Taxes Payable ($16,000 * 9%) 1,440
Cash 1,440
(To record sending sales tax to the government.)
a face value of $450 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 8%. Assuming that Auerbach issued the bonds for $388,844,955, what interest expense would it recognize in its 2021 income statement
Answer:
$7,776,899
Explanation:
Calculation to determine what interest expense would it recognize in its 2021 income statement
Interest expense= $388,844,955 * 8% * (3 months/12 months)
Interest expense= $31,107,596.4 * 3/12
Interest expense= $7,776,899
Therefore the interest expense that would be recognize in its 2021 income statement is $7,776,899
Because of ________ if a city government decides to spend money on beautifying its downtown and attracting tourism to its city when no money has been devoted to those efforts before, then gains in tourism may be significant. Group of answer choices
Answer:
The answer is the production possibility frontier.
Assuming a specific single project with normal cash flows and a cost of capital of 10%, which of the following statements will ALWAYS be true?
a. If NPV > 0 at the stated cost of capital (i.e., 10%), then NPV will also be > 0 at a cost of capital of 12%.
b. If NPV > 0, then Profitability Index > 0.
c. If NPV > 0, then Payback Period > 0.
d. If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).
e. If NPV > 0, then IRR > 0.
Answer:
b. If NPV > 0, then Profitability Index > 0.
c. If NPV > 0, then Payback Period > 0.
d. If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).
e. If NPV > 0, then IRR > 0
Explanation:
The net present value shows the net worth of the assets or the project at the discount rate or the cost of capital. In the case when the net present value comes in positive so the internal rate of return should be more than the cost of capital
Also the profitability index lies between -1 and +1 so if the net present value is positive so the profitability should be more than 1
Hence, b to e statements are correct
Information technology has been used to improve both internaland external access and sharing of information. Three main kinds ofinformation technology allow access and sharing of informationinternally among employees: executive information systems,intranets, and portals.
For each description in the following table, identify thecorresponding information technology.
Description Executive Information System Intranet Corporate Portal
1. Helps managers monitor and analyze organizationalperformance
2. A hybrid system that uses a web address to give employeesaccess to customized information and specialized transactions
3. An internal company network that provides employees witheasy access to information
Answer:
1. Executive Information System (EIS).
2. Corporate Portal.
3. Intranet.
Explanation:
Information technology (IT) can be defined as a set of components or computer systems, which is used to collect, store, and process data, as well as dissemination of information, knowledge, and distribution of digital products.
An information technology (IT) interacts with its environment by receiving data in its raw forms and information in a usable format.
Information technology (IT) has significantly helped to improve both internal and external access and sharing of information between two or more business firms and individuals. Basically, there are three (3) main kinds of information technology (IT) which allow informations to be accessed and shared internally among employees; executive information systems (EIS), intranets, and portals.
1. Executive Information System (EIS): it assist managers working in an organization to monitor and analyze organizational performance. An Executive information system is also referred to as an Executive support system and it can be defined as a management support system that enhances and supports all of the senior executive information and decision-making process.
2. Corporate Portal: it's a hybrid system that uses a web address (uniform resource locator-URL) to give employees access to customized information and specialized transactions with respect to an organization.
3. Intranet: it's an internal company network which is private and provides employees with easy access to information.
On July 1, Sterns Co. acquired patent rights for $36,000. The patent has a useful life of 6 years and a legal life of 15 years.
Required:
Journalize the adjusting entry on December 31 to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Dr Amortization Expense $3,000
Cr Patents $3,000
Explanation:
Preparation of the journal adjusting entry on December 31 to recognize the amortization.
Dec. 31
Dr Amortization Expense $3,000
Cr Patents $3,000
(To record Amortization)
Amortization=(Patent rights/Useful life)*6/12
Amortization=($36,000/6)*6/12
Amortization=$3,000
(July 1 to Dec 31 =6months)
Whispering Winds Corp. has the following inventory data: July 1 Beginning Inventory 37 units at $18 $666 7 Purchases 129 units at $19 2451 22 Purchases 18 units at $20 360 $3477 A physical count of merchandise inventory on July 30 reveals that there are 46 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is
Answer:
Whispering Winds Corp.
Using the FIFO inventory method, the amount allocated to cost of goods sold for July is:
= $2,585
Explanation:
a) Data and Calculations:
Date Description Units Unit Cost Total Cost
July 1 Beginning Inventory 37 $18 $666
July 7 Purchases 129 $19 2,451
July 22 Purchases 18 $20 360
July 30 Total available 184 $3,477
July 30 Ending inventory 46
July 30 Units sold 138
Cost of goods sold, using FIFO inventory method:
Date Description Units Unit Cost Total Cost
July 1 Beginning Inventory 37 $18 $666
July 7 Purchases 101 $19 1,919
Total cost of goods sold = $2,585
Ending inventory = $892 (18 * $20 + 28 * $19)
s borrows $12,000 for a shortterm purpose. The loan will be repaid after 120 days, with Simpson paying a total of $12,400. What is the approximate cost of credit using the APR, or annual percentage rate, calcula
Answer:
the approximate cost of credit using the APR, or annual percentage rate is 10.34%
Explanation:
The computation is shown below:
Interest Paid should be
= $12,400 - $12,000
= $400
Now
Cost of capital for 120 days is
= $400 ÷ 12000
= 3.33%
And, finally
Annual percentage rate is
= 3.33% × 365 ÷ 120
= 10.34%
Hence, the approximate cost of credit using the APR, or annual percentage rate is 10.34%
HELPPP PLEASE !
1. Write one paragraph about a person who decides that taking an hourly job with
tips is a better choice than accepting a salaried job with benefits.
We want to help the user to understand why it gives more preference to the hourly job as compared to the salaries job with benefits
The reasons why the hourly job is better than accepting the salaried job with benefits are as follows:
Hourly job considered to be the goods job for earning the money in haste or at the time when the insurance & vacation should not be considered as the deciding factor. The question that arises is that you are searching for a job or interested to run a family business that has various benefits.Salary jobs provides the compensation along with the other benefits the company provides like insurance, vacation time, incentives, life insurance. In the case of hourly job, the number of hours they actually work and how much energy they would put into their work. They could choose their time also eligible for overtimeIn the case of salaried job, the same amount of money should be provided but along with it the stress should be there like working on weekends, working 10-12 hours a day, etcTherefore in these ways hourly job is better than accepting a salaried job with benefits
Learn more about hourly jobs here: brainly.com/question/764472
anh chị hãy phân tích phản ứng của người tiêu dùng trong lần tăng giá xăng gần đây nhất
Answer:
translate into English
Colorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new washing machine and must choose between two alternative ones. The first machine requires an initial investment of $25,000 and generates annual after-tax cash inflows of $6,500 for each of the next 8 years. The second machine requires an initial investment of $75,000 and provides an annual cash inflow after taxes of $9,500 for 15 years.
Required:
a. Determine the payback period for each machine.
b. Comment on the acceptability of the machines, assuming that they are independent projects.
c. Which machine should the firm accept? Why?
d. Do the machines in this problem illustrate any of the weaknesses of using payback? Discuss.
Answer:
a) Payback period = period up to which cumulative cash flow is negative +
(negative cumulative cash flow /cash flow succeeding
the above period)
Project A - Up to year 4 ,cash flow recovered = 3000 * 4 = 12,000
Payback period =14,000/3,000 = 4.67 years
Project B= Cash flow recovered up to year 5 = 4000 * 5 = 20000
Payback period = 21,000/4,000 =5.25 years
b) On the basis of the Payback period, Project A should be selected, as it has a lower payback period and is also within the maximum acceptable payback period. back period.(4.67 < 5)
Project B should not be selected as its payback recovery is not within the maximum acceptable payback period (5.25 >5 )
c) Machine A should be selected as it has a lower payback period. than machine B.
d)The payback period ignores the life present value of cash flow and also the life of the machine each project has.
so the decision on the basis of the payback period may not be accurate.
As operations manager, you are concerned about being able to meet sales requirements in the coming months. You have just been given the following production report: JAN FEB MAR APR Units produced 2,250 1,750 2,750 2,950 Hours per machine 318 194 393 315 Number of machines 5 7 6 5 Find the average of the monthly productivity figures (units per machine hour).
Answer: 2.81 per hour
Explanation:
Average monthly productivity = (January productivity + February productivity + March productivity + April productivity) / 4
January productivity:
= Units produced / ( Hours per machine * Number of machines )
= 2,250 / ( 318 * 2 )
= 3.537
February productivity:
= 1,750/ ( 194 * 4 )
= 2.255
March productivity:
= 2,750 / ( 393 * 3 )
= 2.332
April productivity:
= 2,950/ ( 315 * 3)
= 3.121
Average monthly productivity = (3.537 + 2.255 + 2.332 + 3.121)/ 4
= 2.81 per hour
A company is trying to decide between two independent projects. Each project has a cost of capital of 12%. Project A has an IRR of 11.4%. Project B has an IRR of 11.1%. Which project should the company choose if the goal of the firm is to maximize shareholder wealth
Answer:
Neither project should be chosen
Explanation:
Given that
Each project cost of capital is 12%
The IRR of project A is 11.4%
And, the IRR of project B is 11.1%
As we can see that the cost of capital of each project with their internal rate of return so no project should be selected
Therefore the above statement represent an answer
The same should be relevant
Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Assets of $210.761 million Total Common Stock of $6.350 million Cash of $10.050 million Retained Earnings of $47.491 million. What were the Digby Corporation's total liabilities
Answer:
the Digby Corporation's total liabilities is $156.92 million
Explanation:
The computation of the total liabilities is given below:
Total Liabilities is
= Total Asset - (Total Common Stock + Retained Earnings)
= $210.761 - ($6.350 + $47.491)
= $210.761 - $6.350 - $47.491
= $156.92 million
Hence, the Digby Corporation's total liabilities is $156.92 million
The same should be relevant
Below is a list of account balances for Currie Hospital as of December 31, 2013. Prepare a balance sheet as of December 31, 2013, in proper form. (Hint: You will need to compute the net assets account. Assume that all net assets at the beginning of the year are unrestricted.) You may use either a Word document or an Excel spreadsheet to construct the balance sheet.
Account Balance
Gross plant & equipment $6,000,000
Accounts payable 130,000
Inventories 100,000
Other current liabilities 70,000
Net accounts receivable 650,000
Accrued expenses 100,000
Accumulated depreciation 200,000
Long-term debt 5,000,000
Cash 210,000
Answer: See explanation
Explanation:
The balance sheet is illustrated below:
Currie Hospital Balance Sheet
ASSETS
Current Assets
Cash $210,000
Inventories $100,000
Accounts receivable, net $650,000
Total Current Assets $960,000
Gross plant & equipment $6,000,000
Less: Accumulated depreciation $200,000 5,800,000
Total Assets 6,760,000
Liabilities and net assets
Current liabilities
Accounts Payable $130,000
Accrued expenses and other liabilities $170,000
Total current liabilities $300,000
Long-term debt $5,000,000
Total Liabilities $5,300,000
Net assets
Unrestricted $1,460,000
Total net assets $1,460,000
Total liabilities and net assets $6,760,000
Assuming no change in government spending, an decrease in taxes of $100 billion with an MPC of 0.90 will add a total of $_____________ billion to the economy after the multiplier effect.
A. 800
B. 400
C. 500
D. 900
Answer:
D. 900
Explanation:
MPC = 0.90
The multiplier = MPC \ {1 - MPC} = 0.90 / (1-0.90) = 0.90 / 0.10 = 9
The Effect = Decrease in taxes * Spending multiplier
The Effect = $100 * 9
The Effect = $900
So, an decrease in taxes of $100 billion with an MPC of 0.90 will add a total of $900 billion to the economy after the multiplier effect.
Banks are financial intermediaries because they Group of answer choices print money as needed for borrowers whether business, individual, or government entities. hold all the money in the economic system in currency form. link savers who deposit money and borrowers who seek loans.
Answer: link savers who deposit money and borrowers who seek loans.
Explanation:
Loans are simply savings that someone else put into a bank. Without the bank however, it would be hard to connect the people who did the saving with the people who wanted to borrow.
The bank therefore acts as an intermediary for these people. Those who want to save, put money in a bank and those who want to get money, will then be loaned it by the bank. Because the banks has developed expertise in borrowing, it also protects the savings of the savers by not loaning out money to those that might not pay back. This is just one advantage of having the bank as an intermediary.
