Answer:
false
Explanation:
the answer is false.
Which statement about the purpose of PESTEL is correct? A. It helps managers understand how a firm's external environment affects the firm. B. It helps managers understand how a firm's internal strength may help it take advantage of an external opportunity C. It helps managers understand the relationship between the firm's industry and its buyers and suppliers D. It helps managers understand the firm's internal environment, such as its employees' union.
Answer:
A. It helps managers understand how a firm's external environment affects the firm.
Explanation:
PESTEL is an acronym that stands for Political, Economic, Socio-cultural, and technological. It analyses the environment in which a business operates.
In marketing it has found an application in forecasting market decline and growth, market direction, and potential.
The analysis is an external one that identifies strengths and weaknesses in macro-environmental factors. This knowledge can now be used in SWOT analysis by the business.
Devin transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to Suns Corporation. In return, Devin receives 80% of Suns Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000). In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which Suns Corporation assumes. With respect to this transaction, Devin’s recognized gain is
Answer:
$62,000
Explanation:
Calculation for Devin’s recognized gain
Fist step in to calculate the Consideration amount received by Devin’s
Consideration received by Devin’s=$65,000×0.80+$5,000+$20,000
Consideration received by Devin’s=$77,000
Second step is less the adjusted basis to the Consideration received by Devin’s in order to know the gain
Consideration received by Devin’s $77,000
Less Adjusted basis $15,000
Gain $62,000
($77,000-$15,000)
Therefore Devin’s recognized gain is $62,000
Andre, a commercial real estate developer, has been described as having “the gift of gab.” To which personality category does Andre likely belong? social artistic enterprising investigative realistic
Answer:
enterprising
Explanation:
_____ refers to how people act when they're purchasing products to use either directly or indirectly to produce other products.
Aaron prefers to fly with Qantas rather than Alaska Airlines because of their better safety record. He prefers Jet Blue to Qantas because they have inflight television. However, he would rather fly Alaska than Jet Blue because they have a better customer satisfaction rating. This preference ranking violates the order rule of the five Rules of Actional Thought. True False
Answer:
True
Explanation:
Five Rules of Actional Thought is often referred to as Five Axiom of Decision Making. It includes the following:
1. Probability
2. Order
3. Equivalence
4. Substitution
5. Choice.
The Order Rule declared that one must be ready to have a decision order without any cycles. This can be expressed as follows: If an individual prefers A to B and B to C, he or she must prefer A to C.
Therefore, in this situation: Aaron prefers Qantas to Alaska, and Jet Blues to Qantas. However, since he would rather fly Alaska than Jet Blue because they have a better customer satisfaction rating, shows CYCLE in his decision order.
Hence, in this case, it is TRUE that this preference ranking violates the order rule of the Five Rules of Actional Thought.
A taxpayer, age 64, purchases an annuity from an insurance company for $64,000. She is to receive $533 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming that she receives $6,400 this year, what is the exclusion percentage, and how much is included in her gross income?
Answer:
Exclusion percentage = 48.10
$3321.6 IS included in her gross income
Explanation:
Exclusion Percentage = Investment in Total /(Payments made * Life Expectancy *Total months in a year)
Exclusion Percentage = $64,000 / ($533 * 20.8 *12)
Exclusion Percentage = 0.4810
= 48.10%
The Included in income amount can be calculated using the following formula:
Included in Income = (Received amount - Return on Capital)
& Return on Capital = ( Received amount * Exclusion percentage)
When ROC = $6,400 * 0.4810 = $3078.4
Hence, Included in income = $6,400 - $3078.4 = $3,321.6
Please review example below and indicate what is wrong with the bucket. (2 points)
Output • S Output 01/02/2019 CURS PODE 109,316,00 1265013000 135,28,000.00 18,517,00.00 4,04,000 125,738,000 15,424,0.00 147.540,000
Output · S Output 01/02/2019 CURS 100E 109,314,000 126,013,000.00 125,28,000.00 18,517,000 46,04,000 125,788,00.00 135,424,00 147,540,000
Output : 5 Output - 01/02/2019 CURA PODE -109,316,00 -26,013,000.00 -15.20,000.00 184,517,00.00 49,04,000 -125,758,00 -135,424,000.00 - 149,500.00
A) A sign should be flipped
B) A label is incorrect
C) Scaling is incorrect
D) A value label is incorrect
Answer:
A) A sign should be flipped
Explanation:
The given value labels are correct as output. The signs place should be flipped as then there will be negative sign with the output which will make the output invalid. The brackets and values are correctly entered which are giving the desired results.
(3) A total of 1000 units of a certain product must be completed by the end of the current week. It is now late Monday afternoon, so only four days (8-hour shifts) are left. The standard time for producing each unit of the product (all manual operations) is 11.65 min. How many workers will be required to complete this production order if it is assumed that worker efficiency will be 115%
Answer:
6 workers
Explanation:
Calculation for How many workers will be required to complete this production order
First step is to find the Workload WL
Workload WL= 1,000(11.65)/1.15
Workload WL=11,650/1.15
Workload WL = 10,130.4 min
Workload WL converted from minutes to hour= 168.84 hr
Second step is to find the Available time
Available Time= 4(8.0)
Available Time= 32 hr/worker
Last step is to find How many workers will be required to complete this production order
Workers= 168.84/32
Workers = 5.28 Approximately 6 workers
Therefore 6 workers will be required to complete this production order.
The Nelson Company has $1,522,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $395,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.2? Do not round intermediate calculations. Round your answer to the nearest dollar.
Answer:
$308,750
Explanation:
Current ratio = Current asset / Current liabilities
To get the short term debt increase, to the value of current assets and current liabilities, an amount must be added whereas the result must be 2.2
1,522,500 + y / 525,000 + y = 2.2
1,522,500 + y = 2.2 × (525,000 + y)
1,525,500 + y = 1,155,000 + 2.2y
1,525,500 - 1,155,000 = 2.2y - y
370,500 = 1.2y
y = 370,500 / 1.2
y = 308,750
It therefore means that the maximum amount that should be borrowed to purchase the inventory is $308,750
g If you could reinvest the cash flow stream of $798, $508, $509, $967, $503, $1,362, $1,015, and $1,387 at 8.6% interest, how much will you have from this investment in 8 years? (In other words, what is the future value of this stream of cash flows?) Note that the cash flows are not necessarily the same as the previous problem's cash flows. The cash flow stream starts in one year; so, the last cash flow is 8 years from now. Round to the nearest cent.
Answer:
$4,707.92
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = $798
Cash flow in year 2 = $508
Cash flow in year 3 = $509
Cash flow in year 4 = $967
Cash flow in year 5= $503
Cash flow in year 6 = $1,362
Cash flow in year 7 = $1,015
Cash flow in year 8 = $1,387
I = 8.6%
Present value = $4,707.92
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On July 1, 20X4, Pillow Corp. obtained significant influence over Sleep Co. through the purchase of 3,000 shares of Sleep's 10,000 outstanding shares of common stock for $20 per share. On December 15, 20X4, Sleep paid $40,000 in dividends to its common stockholders. Sleep's net income for the year ended December 31, 20X4, was $120,000, earned evenly throughout the year. In its 20X4 income statement, what amount of income from this investment should Pillow report
Answer: $18,000
Explanation:
Income from investment is the percentage of the acquired company's income that the company that acquired it will report as their own based on their percentage of ownership.
By purchasing 3,000 shares out of 10,000, Pillow Corp owns;
= 3,000 / 10,000
= 30% of Sleep Co.
These shares were bough on July 1 so the relevant period will be half a year.
At the end of the year, Pillow Corp will report 30% of half of Sleep Co. income as income from investment for the year.
= 30% * 120,000 * 0.5
= $18,000
As businesses have become more dependent on information systems, they have faced a(n): decrease in the number and severity of security threats. increase in the number and severity of security threats. decrease in the number of security threats, but an increase in their severity. increase in the number of security threats, but a decrease in their severity.
Answer: increase in the number and severity of security threats.
Explanation: An increase in the number and severity of security threats can be directly linked to the increasing dependency of businesses on information systems which are used in turning raw data into useful information for decision making in businesses. They are designed to support a particular process within an organization or to carry out very specific analysis. The increase in the number and severity of security threats which target these data for nefarious purposes has led to businesses struggling to hire enough qualified professionals to safeguard against the growing threat. Hence, a strong, smart digital workforce is essential to combat the more frequent, more sophisticated threats emanating from across governments, businesses and organizations.
An environmental analysis can accurately foretell the future.
a) true
b) false
You are given the following long-run annual rates of return for alternative investment instruments: U.S. Government T-bills 3.80 % Large-cap common stock 11.65 Long-term corporate bonds 5.35 Long-term government bonds 4.40 Small-capitalization common stock 12.70 The annual rate of inflation during this period was 2 percent. Compute the real rate of return on these investment alternatives. Do not round intermediate calculations. Round your answers to two decimal places.
Answer:
0.0176
0.0946
0.0328
0.0235
0.1049
Explanation:
The formular that is used to calculate the real rate of return is
(1+return)/(1+inflation) -1
The real rate of return for U.S. Government T-bills 3.80% can be calculated as follows
Inflation rate = 2%
Return= 3.80%
Real rate of return= (1+3.80/100) / (1+2/100)
= (1+0.038)/(1+0.02) -1
= 1.038/1.02 -1
= 1.0176 -1
= 0.0176
The real rate of return for large cap common stock 11.65% can be calculated as follows
Inflation rate= 2%
Return= 11.65%
Real rate of return= (1+11.65/100)/(1+2/100)-1
= (1+0.1165)/(1+0.02)-1
= 1.1165/1.02 -1
= 1.0946 -1
= 0.0946
The real rate of return for long term corporate bond 5.35% can be calculated as follows
Inflation rate= 2%
Return= 5.35%
Real rate of return= (1+5.35/100)/(1+2/100) -1
(1+0.0535)/(1+0.02) -1
1.0535/1.02 -1
= 1.0328 -1
= 0.0328
The real rate of return for long term government bond 4.40%
Inflation= 2%
Return= 4.40%
Real rate of return= (1+4.40/100)/(1+2/100) -1
= (1+0.044)/(1+0.02) -1
= 1.044/1.02 -1
= 1.0235-1
= 0.0235
The real rate of return for small capitalization common stock 12.70% can be calculated as follows
Inflation rate= 2%
Return= 12.70%
Real rate of return= (1+12.70/100)/(1+2/100) -1
= (1+0.127)/(1+0.02) -1
= 1.127/1.02 -1
= 1.1049-1
= 0.1049
A higher interest rate (discount rate) would:________
A) Reduce the price of corporate bonds.
B) Reduce the price of preferred stock.
C) Reduce the price of common stock.
D) all of the above.
Answer: C) Reduce the price of common stock.
Explanation:
A Rise in interest rates would tend to contradict the economy. Because Everyone cuts back on thier spending because there is less money to spend. This results in earnings falling or dropping, next affected are stock prices. Conversely, when rates drops everyone has more money to spend and earnings tend to rise along with prices.
The rising income gap among highly educated workers in the United States:_____.
a. has not been a cause of concern for income inequality policy makers.b. has been present for the past 80 years.c. is an important feature of the increase in income inequality.d. is less of a concern than the effect of increased immigration on income inequality.
Answer:
c. is an important feature of the increase in income inequality
Explanation:
Income inequality measures how unevenly income is distributed throughout a population.
Springer Company had the following transactions in August: Earned $3,600 of revenues on account; collected $5,300 from a customer for services provided last month; incurred $840 of repair expense and paid cash; paid $200 for rent that it owed from the previous month. What is the net income in August?
Answer:
Net income in August = $2,760
Explanation:
This is an example of matching concept in accounting which states revenue must recorded in the period in which it is earned whether or not cash is received, and cost must recorded in the period in which it is incurred whether or that cash is paid.
The net income in August can be calculated by considering only income earned in August and expenses incurred in August whether or not cash exchanges hands. Therefore, net income in August can be calculated as follows:
Net income in August = Revenue earned on account - Repair expense incurred and paid in cash = $3,600 - $840 = $2,760
Therefore, the net income in August is $2,760.
Note: Both $5,300 collected from a customer for services provided last month and $200 paid for rent that it owed from the previous month are not considered in the calculation because they only shows that cash exchanged but they are not part of the revenue and expenses for August.
Eaton Tool Company has fixed costs of $340,400, sells its units for $80, and has variable costs of $43 per unit. a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $270,000. However, more labor will now be required, which will increase variable costs per unit to $46. The sales price will remain at $80. What is the new break-even point? (Round your answer to the nearest whole number.)
Answer and Explanation:
The computation is shown below:
But before reaching to the final answers, first determine the contribution margin per unit which is
a. Contribution margin per unit =Sales-Variable cost
= $80 - $43
= $37 per unit
Now
Breakeven = Fixed expenses ÷ Contribution margin
= $340,400 ÷ $37
= 9,200 units
b.Contribution margin = Sales - Variable cost
= $80 - $46
= $34 per unit
Now
New Breakeven = Fixed expenses ÷ Contribution margin
= $270,000 ÷ 34
= 7,941 units
Frantic fast foods had earnings after taxes of 460,000 in 20X1 with 310,000 shares outstanding. On January 1 20X2, the firm issued 34,000 new shares. Because of the proceeds from these new shares and other operating improvements, earning after taxes increased by 23 percent.
For cost-based pricing in multiple-product companies, which of the following is most likely to be used as a possible cost basis?
a. Direct materials costs
b. Variable selling costs
c. Administrative costs
d. Corporate overhead costs
Answer:
A. i think
Explanation:
Oxford Company uses a job order costing system. In the last month, the system accumulated labor time tickets total $24.600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid, which entry should Oxford make to record the indirect labor used?
A) Debit Factory Overhead $4,300, credit Factory Wages Payable $28.900
B) Debit Payroll Expense 524.600credit Factory Wages Payable $28,900.
C) Debit Payroll Expense $28,900, credit Cash $28.900
D) Debit Work in Process Inventory $20,900 credit Factory Wages Payable $28.900.
E) Debit Work in Process Inventory $24600, credit Wages Payable $28.900
Job order costing is a technique to decide the expense of assembling every item.Debit Payroll Expense with 524.600 and credit Factory Wages Payable with $28,900.
What is job order costing system?It is a costing technique which is utilized to decide the expense of assembling every item. This technique is used when the producer creates an assortment of items which are not same and necessities to ascertain the expense for making a singule Item.
Given:
Direct labor cost = $24,600
Indirect labor cost = $4,300
So while passing the general entry we will debit the payroll expense and credit the total factory wages (i.e. Direct as well as Indirect labor cost) with $28,900.
Therefore option B aptly describes the statement.
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The individual that has the greatest ability to conduct an external search for information is the consumer that has: Question 20 options: a low level of knowledge about the product category. an extensive knowledge of the product category. some knowledge of the product category, but not enough to make an intelligent decision. a low educational level.
Answer: some knowledge of the product category, but not enough to make an intelligent decision
Explanation: An external search usually may begin with dissatisfaction from a previous purchase, and this is when an individual seeks for alternatives and other information regarding a product. The individual that has the greatest ability to conduct an external search for information is the consumer that has some knowledge of the product category, but not enough to make an intelligent decision. This is because, an individual who has an extensive knowledge of a product category will most likely not spend more time in the external search process than someone with just a moderate level of product category knowledge and the greater the motivation for this individual with some knowledge, the greater the extent of external search for information.
State two benefits a country may gain from immigration.
Answer:
A country can gain from immigration when immigration is controlled so that immigrants contribute to society. If the immigrants have needed skills and come in appropriate numbers this is good for the country. Also by getting people from all over, they will benefit by having a much richer culture.
Explanation:
Answer:
Immigration can give substantial economic benefits – a more flexible labour market, greater skills base, increased demand and a greater diversity of innovation. However, immigration is also controversial. It is argued immigration can cause issues of overcrowding, congestion, and extra pressure on public services.
Explanation:
The following items and amounts were taken from Familia Inc.’s 2022 income statement and balance sheet, the end of its first year of operations. Interest expense $ 2,200 Equipment, net $ 54,700 Interest payable 700 Depreciation expense 3,200 Notes payable 11,800 Supplies 4,100 Sales revenue 44,300 Common stock 26,800 Cash 2,900 Retained earnings ? Salaries and wages expense 15,600 Supplies expense 900
Question is:
(a) In each case, identify whether the item is an asset, liability, stockholders' equity, revenue, or expense item as attached as picture
Answer
Items Identification
Interest expense Expense
Interest payable Liability
Notes payable Liability
Sales revenue Revenue
Cash Asset
Salaries and Expense
wages expense
Equipment, net Asset
Depreciation expense Expense
Supplies Asset
Common stock Stockholder's equity
Retained earnings Stockholder's equity
Supplies expense Expense
Happy inc.uses the double declining method of depreciation for its truck. The company purchased the truck for $17,200 and a $250 delivery fee. The company expects the truck to last 20 years and have a $2000 salvage value at that date. Calculate the following:
a. Double-declining-balance rate
b. Depreciation expense for year
Answer:
Straight line Rate = 5 %
Double-declining-balance rate= 10%
Double-declining- Depreciation for the year= $1745
Straight Line Depreciation for the year = $ 772.5
Explanation:
a. Double-declining-balance rate
The number of years of life gives us the rate of depreciation .
So life in years = 20
Straight line Rate = 100 %/20 = 5 %
Double-declining-balance rate= 2* Straight line Rate
= 2* 5= 10%
b. Depreciation expense for year
Depreciation expense for year= Double-declining-balance rate* Beginning period book value
= 10 % * ( 17200 + 250) = 10 % * 17450= $1745
Straight Line Depreciation for the year = Cost - Salvage Value / Life in yrs
= 17450 - 2000 / 20 = $ 772.5
Alternating periods of economic expansion and recession are known as the:_______.
A) Fisher effect.
B) business cycle.
C) market risk.
D) systematics.
A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. Work in Process Inventory Beginning WIP 116,900 Direct materials ? Direct labor ? Applied overhead ? To finished goods ? Ending WIP 152,000 Factory Overhead 116,900 105,210 Finished Goods Inventory Beginning FG 137,100 376,700 349,100
Answer:
The cost of direct materials used is $124,090
Explanation:
Ending Finished Goods = $349,100 - $376,700 = $137,100 - ($27,600)
Ending Finished Goods = $109,500
Calculation of Direct labor
Here, the company's overhead cost is 60% of direct labor cost
Ending factory overhead cost = 60% * Direct labor cost
$109,500 = 60% * Direct labor cost
Direct labor cost = $109,500 / 60%
Direct labor cost = $182,500
Calculation of direct materials cost
Particular Amount
Beginning finished goods inventory $376,700
Add: Ending WIP $152,000
Less: Beginning WIP $116,900
Less: Direct labor $182,500
Less: Ending Factory overhead $105,210
Direct Material Cost $124,090
Hence, the cost of direct materials used is $124,090.
Management finds the variation in quarterly unit product costs to be confusing. It has been suggested that the problem lies with manufacturing overhead because it is the largest element of total manufacturing cost. Accordingly, you have been asked to find a more appropriate way of assigning manufacturing overhead cost to units of product. Required: 1. Assuming the estimated variable manufacturing overhead cost per unit is $0.60, what must be the estimated total fixed manufacturing overhead cost per quarter? 2. Assuming the assumptions about cost behavior from the first three quarters hold constant, what is the estimated unit product cost for the fourth quarter? 3. What is causing the estimated unit product cost to fluctuate from one quarter to the next? 4. Assuming the company computes one predetermined overhead rate for the year rather than computing quarterly overhead rates, calculate the unit product cost for all units produced during the year.
Question Completion:
Company A makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes predetermined overhead rates on a quarterly basis, using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:
Quarters
First Second Third Fourth
Direct materials $240,000 $120,000 $60,000 $180,000
Direct labor 96,000 48,000 24,000 72,000
Manufacturing overhead 228,000 204,000 192,000 ?
Total manufacturing costs $564,000 $372,000 $276,000 ?
Number of units produced 80,000 40,000 20,000 60,000
Estimated unit product cost $7.05 $9.30 $13.80 ?
Answer:
Company A
1. Total fixed manufacturing overhead cost per quarter:
Quarters
First Second Third Fourth
Fixed manufacturing o/h $180,000 $180,000 $180,000 $180,000
2. Estimated unit product cost for the fourth quarter:
= Total manufacturing costs divided by estimated units produced
= $468,000/60,000 = $7/80
3. The fluctuation in the estimated unit product cost is caused by the fixed manufacturing overhead vis-a-vis the units produced. When more units are produced, the fixed manufacturing overhead per unit is less than when less units are produced.
4. Calculation of the unit product cost for all units produced during the year = total manufacturing costs divided by total units produced
= $1,680,000/200,000
= $8.40
Explanation:
Data and Calculations:
a) Estimated variable cost = $0.60
Quarters
First Second Third Fourth
Direct materials $240,000 $120,000 $60,000 $180,000
Direct labor 96,000 48,000 24,000 72,000
Manufacturing overhead 228,000 204,000 192,000 216,000
Total manufacturing costs $564,000 $372,000 $276,000 $468,000
Number of units produced 80,000 40,000 20,000 60,000
Estimated unit product cost $7.05 $9.30 $13.80 $7.80
b) Variable manufacturing overhead = $0.60 * units produced
Quarters
First Second Third Fourth
Number of units produced 80,000 40,000 20,000 60,000
Variable manufacturing
overhead (units * $0.60) $48,000 $24,000 $12,000 $36,000
c) Fixed manufacturing overhead = Total manufacturing overhead minus variable manufacturing overhead
Manufacturing overhead $228,000 $204,000 $192,000 $216,000
Variable overhead $48,000 $24,000 $12,000 $36,000
Fixed manufacturing o/h $180,000 $180,000 $180,000 $180,000
d) Total manufacturing costs per annum:
Total manufacturing costs $564,000 $372,000 $276,000 $468,000
= $1,680,000
Number of units produced 80,000 40,000 20,000 60,000
Total units produced = 200,000 units
John Maynard Keynes supported economics policies that?
A). encouraged businesses to maximize their productivity.
B). protected citizens during periods of economic difficulty .
C). removed the government from most economic decisions.
D). led to workers collectively owning all factories and land.
John Maynard Keynes supported economics policies that "Protected citizens during periods of economic difficulty
Option (b) is correct
John Maynard Keynes was a leading economist of the 20th century who advocated for government intervention in the economy to mitigate the effects of economic downturns. He believed that government spending during periods of economic hardship could stimulate demand and prevent unemployment. This idea is known as Keynesian economics.
Keynes argued that government spending on public works projects and social programs during times of economic recession could create jobs and increase demand for goods and services, which would, in turn, help to stimulate economic growth. He also believed that governments should use monetary policy tools, such as lowering interest rates, to encourage borrowing and investment during economic downturns.
John Maynard Keynes supported economic policies that aimed to protect citizens during periods of economic difficulty by advocating for government intervention to stimulate demand and prevent unemployment.
Therefore the correct answer is (b)
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Explain which expenditure category of GDP changes and the direction of the change that results for each transaction described. a. A domestic business purchases a domestically produced computer to use in a business office. b. A domestic business produces a computer that is sold to a foreign company. c. The federal government purchases a domestically produced computer to use in a court house. d. A domestic household purchases a domestically produced computer to use in a home. e. A domestic household purchases a computer produced in a foreign country to use in a home.
Answer:
Investment spending increases
b. Net export increases
c. Government spending increases
d. consumption spending increases
e. consumption spending increases
net export decreases
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
A domestic business purchases a domestically produced computer to use in a business office increases business inventory.
The purchase of a computer by a foreign company increases export. export is a positive function of net export, so net export increases
The government's purchase increases government spending
The purchase of a computer is a durable purchase by households. This increases consumption spending
Also, the purchase of a computer from a foreign country is an import Import is a negative function of net export. so net export reduces
The financial value of all the welfare and commodities manufactured in a country during a definite period is called gross domestic product (GDP).
The answers are:
a. A domestic business purchases a domestically produced computer to use in a business office: Investment spending rises
It raises the business inventory as they are buying the goods.b. A domestic business produces a computer that is sold to a foreign company: Net export raises.
Exportation is a positive determinant in GDP and the acquisition of domestically manufactured goods globally will raise the GDP.c. The federal government purchases a domestically produced computer to use in a courthouse: Government spending rises.
Buying was done by the government so that their spending will raise.d. A domestic household purchases a domestically produced computer to use in a home: increment in consumption spending.
The possession of the system by a household will raise its spending.e. A domestic household purchases a computer produced in a foreign country to use in a home: consumption spending increases and net export decreases.
The buying of systems from a foreign country will raise the imports and spending hence reducing the export.To learn more about GDP follow the link:
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