When the government prevents prices from adjusting naturally to supply and demand, efficiency is improved in the economy. ANSWER: F TYPE: T KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y [cxviii]. A market economy cannot possibly produce a socially desirable outcome because individuals are motivated by their own selfish interests. ANSWER: F TYPE: T KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y [cxix]. While the invisible hand cannot guarantee efficiency, it is better at guaranteeing equity.
A flat tax employs territorial taxation, which is when the government only taxes income that is generated within national borders (Meehan). In the global economy, taxes remain a critical component of business; countries with low-taxes benefit from jobs and capital (Meehan). A good tax policy is important to generate revenue for business and also because the penalty for a poorly received tax system on a global scale may be substantial and long-term (Meehan). The flat tax eliminates
Case Study 3-5 Discuss the qualitative concept of comparability. In your opinion, would the financial statements of companies operating in one of the foreign countries listed above be comparable to a U.S. company’s financial statements? Explain. The qualitative concept of comparability from our foreign countries to the United States is not comparable. At this time, our foreign countries cannot be compared to United States because of the size of the marketplace of the country (Schroeder, Clark, & Cathey, 2011).
Development is a change and implies that change is for the better, and improvement. Was traditionally a one dimensional concept simply focussing on the economic growth of a country, however today it is multidimensional incorporating: economic, social, environmental, cultural and political progress in a country. The Human Development Index (HDI) is one method of measuring development. This is a good indicator of development as it includes lots of factors, such as life expectancy and literacy rates, and recognises the multidimensional nature of development. However, there are no environmental factors taken into account, making it difficult to measure over all development.
The providers (savers) are households and the U.S. government when it runs a surplus. The users (borrowers) are non-financial corporations and governments. j. What do we call the price that a borrower must pay for debt capital? What is the price of equity capital?
Net exports (NX: The value of exports minus the value of imports. An equation for GDP where Y-GDP or Total output_ Y-C+I+G+NX Does GDP measure what we want it to
In fact, it is often said that “Cash is King” because if a company can’t generate cash, it won’t survive. To aid in the analysis of cash, the statement of cash flow reports the cash effects of a company’s operating activities, investing activities and financing activities. If you knew the source of a company’s was generated from the operations of the business rather than borrowed, a cash flow statement provides that information. Similarly, net income does not tell you how much the company generated from operations. Neither the income statement, nor the balance sheet can directly answer most of the important questions about cash, but the cash flows statement
Summary As the chapter title suggests, Dr. Roy Spencer discusses the role that government assumes in the United States economy. In his opening remarks Dr. Spencer affirms his intentions to the reader in the statements, “I am not going to address what constitutes the” proper role of government”. “What I am interested in is the extent to which government helps or hurts our efforts to achieve the goal of people providing as many goods and services as possible to each other that we want and need.” There are several methods of government intervention which Dr. Spencer chooses to discuss in this chapter. These methods are as follows: raising tax rates, printing money, subsidies, jobs programs, economic stimulus, rebuilding after disaster, low interest loans, wage controls, and price controls. While at a glance each of these programs may seem harmless, Dr. Spencer illustrates why he believes America’s economy is declining because of the current system.
2. Do increases in gross domestic product necessarily translate into improvements in the welfare of citizens? Explain your answer. A: GDP growth by itself is not a good enough indicator of improving quality of life because there is many other factors that influence quality of life. GDP growth in itself is not enough to indicate quality of life.
If local prices in a country increase more than prices in another country for the same product; being is that foreign exchange forward markets are linked to interest markets; then the local currency may decline in value via its foreign counterpart, presuming there is no change with the structural relationship between the two. Balance of payments are affected when the balance of payments approach suggest that the exchange rates have come from capital transactions and trade. When the internal and external pressures are in equilibrium, this usually means the exchange rate for the equilibrium has been