The expenditure method: the sum of the total expenditure on goods and services by households, govts and exports . (the value of exports minus the value of imports) 3. The income method: The sum of the income generated in the production of goods and services, which includes profits, wages and other employee payments, econome from rent and interest earned. Production, income and the circular flow diagram: The circular flow diagram shows the flow of spending and money in the economy. It illustrates the equality between GDP measured from the income and expenditure methods.
What is the price of equity capital? What are the four most fundamental factors that affect the cost of money, or the general level of interest rates, in the economy? The price that a borrower must pay for debt capital is called interest rate. The price of equity capital is expresses as dividend yield + capital gain. The four fundamental factors that affect the cost of money are production opportunities, time preferences for consumption, risk, and expected inflation.
28. If a company uses the periodic inventory system, what is the impact on net income of including goods in transit f.o.b. shipping point in purchases, but not ending inventory? a. Overstate net income.
c. Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax? d. At the output level in part (c), how much is the tax? e. How much tax revenue does government collect? f. What is the deadweight loss borne by society if the externality is left uncorrected?
This is the sum of cost of all the final products and services sold in any economy. There are categories of final products and services. The largest portion of the GDP is purchases by private consumers, from clothes and food to homes and cars, and services purchased such as utilities, housekeeping, and entertainment. Investment purchases done by companies and government spending are the other categories of the GDP. Also included in the sum are the net exports; the total exports minus the imports.
BUSN 5260 Current Economic Analysis Week 5: Personal Assignment There are Internet questions with this assignment at the end. Problems Problem 1 What is the difference between Gross Domestic Product and Gross National Product? Gross Domestic Product the estimated value of the total worth of a country’s production and services, within its boundary, by its nationals and foreigners, calculated over the course on one year. Gross National Product is the estimated value of the total worth of production and services, by citizens of a country, on its land or on foreign land, calculated over the course on one year. Problem 2 The book details four types of unemployment.
Debt to total assets, also known as simply debt ratio, is calculated by taking the total liabilities for the company divided by the total assets for the company; this information is found on the company’s balance sheet. This ratio determines the portion of debts a company has that are paid and financed through its debt. For Huffman Trucking the calculation would look like this for 2011: ($90,283+$71,365)/$267,265 = $161,648/$267,265 = 0.6048 or 60.48% (Huffman Trucking, 2013). Time interest earned, also known as interest coverage ratio, is calculated by taking the earnings before interest and tax and dividing it by interest expense; this information is found on the company’s income statement. This ratio determines the rate and ability in which the company is able to pay its debts off.
1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
P5; The Trading Account; The trading account is an account that shows profits and losses for a business. There are three parts to the trading account, the first one is sales turnover and this is the money that is coming into the business by trading. The formula for sales turnover is quantity sold x the selling price. According to business alpha the sales turnover for this business is 3,057,000. The second component is the cost of sales which includes the costs directly linked to providing the trade.
Although paper monies, such as certificates, stocks, currency, or bonds, are normally kept in financial institutions because of safety or convenience, the popularity to maintain possession of valuables is on the rise. The lack of hassle and ease of liquidity are two reasons for the rise. Standard of Deferred Payment - Money can be used to purchase goods and services, and pay at a later date or with a series of payments. For example, some furniture or electronic stores offer “buy now, pay later” specials as an incentive for purchasing. Federal Reserve and Monetary Policy The Federal Reserve is considered independent because, although it is accountable to Congress, its decisions do not have to be ratified by Congress or the President.