More expensive government programs will require more taxes to fund them. This is a simple and true statement, sometimes. A closer look at the vast number of programs and their costs reveals a more complex equation. For example, if the cost of the milk subsidy program were compared to the national parks program and legislators were asked to choose one opportunity over the other, the votes from legislators from farming states would most assuredly be in favor of the milk subsidy, while the legislators from tourism states would vote in favor of the national parks program. Is this a comparison of opportunity cost?
I think the case study with its proposed solutions would be useful to the agricultural enterprises seeking to employ management accounting techniques. It is because the study adopts the activity-based method of costing product and cost allocations. Activities are the main focus on activity-based costing. The main theory in ABC is that overhead costs are originated by an array of movements, and those different products make use of these activities in a heterogeneous way. Costing the activity is normally an in-between step in the distribution of overhead costs to products, to acquire more precise product cost information.
Dick Smith’s Population Puzzle Opportunity Cost Opportunity cost is the benefit that could have been gained from an alternative use of the same resource. In Dick Smith’s Population Puzzle, the main opportunity cost addressed is: that allowing immigrants into Australia will put pressure on resources, hence jeopardizing a sustainable Australia. From the transcript, it can be interpreted that farmers are being paid large amounts of money to plough producing crops back into the ground. At the same time, the same Government is planning on increasing Australia’s population by 60%. Consequently, the economic interdependence for food would be reliant on governments globally.
Evaluating Fiscal Policy Alternatives Simulation ECO 372 November 28, 2011 Matthew Angner A government has a couple of roles the need to enforce in order to ensure that their people and land will be able to support them through any times. One of these roles is to invoke and sustain economic growth. The government can achieve this by trying to manipulate the trends in that particular economy, though fiscal policy. Fiscal policy is changes that are made to government spending or taxes that leads to one of two conclusions. One of these conclusions is that the economy will stimulate because of the changes being made, or the economy will slow down.
One reason that there are so many issues in the defense budget spending are because this is one area of the budget that is not a mandatory expenditure. The money allocated here is a discretionary expenditure and is subject to review on a regular basis. National security policy is also highly political because it involves the expenditure of very large amounts of money. Defense spending is generally the second-largest category in the federal budget, behind spending on entitlements (social security, Medicare, and the like) and just ahead of service (paying interest) on the national debt. (Snow, 2011, p.
Macroeconomics (8th ed.). Boston, MA: McGraw Hill/Irwin). Consumption is spending by households this is where the purchasing of groceries comes in. When food is purchased it is easy to recognize that it impacts the economy, the government imposes taxes on import and the sale of groceries this helps to increase the Federal treasury. It also affects the government in determining other commodities and where they should be sold.
7. Some argue that aid is focused on industrialization causing a greater gap in incomes and living standards between those in that sector and those in the traditional agricultural sector. 8. Aid is often available only if the country agrees to adopt certain economic policies and these often reflect the Washington Consensus policies that emphasize free market principles of liberalization, deregulation and privatization to promote economic growth. These policies might be more in the interest of MNCs and the developed countries rather than the developing countries.
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.
Therefore, understanding exactly how monetary policies will affect the economy is extremely important. Monetary policies generally will raise or lower interest rates, which will ultimately affect individuals and business demand for goods and services. Unfortunately, many individuals do not understand the entire concept surrounding the Federal Reserve real interest rate. For example, any magnitude of decreasing the real rates will lower the cost of borrowing; this will increase investment spending, and influence individuals to buy durable goods. These items may consist of automotive, recreational vehicle, homes, and higher educational opportunities.
Conclusion The Federal Reserve is a very powerful entity and has a large amount of influence on how our nation’s economy performs. The Reserve manages our nation’s monetary system through three primary functions; open market operations, discount policies and reserve requirements. The Federal Reserve’s current monetary policy shows an expansionary policy to influence economic growth. The Reserve has an effect of our nation’s production and employment rate as it influences the money demand and interest