"Taxes are a necessary evil to raise revenue for the government, towards funding expenditure on 'public goods and services'. We should aim to do this in the most effective and efficient way - with the lowest marginal tax rates, and lowest distortions possible. This could be achieved by eliminating all forms of taxes on income and replacing them with a uniform tax on expenditure on goods and services instead."  

Provide a critical assessment of this statement based on economic concept

Jaywall Corporation, which uses a perpetual inventory system, recorded the following inventory transactions during 20X3.   

  (a) Using the FIFO cost formula, calculate the amount of the cost of goods sold for the quarter ended June 30. (Show calculations)
(b) Using the average cost formula, calculate the amount of ending inventory at June 30. (Show calculations)

David Palmer identified the following bonds for investment:

1. Bond A: A $1 million par, 10% annual coupon bond, which will mature on July 1, 2025.
2. Bond B: A $1 million par, 14% semi-annual coupon bond (interest will be paid on January 1 and July 1 each year), which will mature on July 1, 2031.
3. Bond C: A $1 million par, 10% quarterly coupon bond (interest will be paid on January 1, April 1, July 1, and October 1 each year), which will mature on July 1, 2026.

The three bonds were issued on July 1, 2011.

(Each Part is Independent)

2. David purchased the Bond C on January 1, 2014 when Bond C was priced to have a yield to maturity (EAR) of 10.3812891%. David subsequently sold Bond C on January 1, 2016 when it was priced to have a yield to maturity (EAR) of 12.550881%. Assume all interests received were reinvested to earn a rate of return of 3% per quarter (from another investment account), calculate the current yield, capital gain yield and the 2-year total rate of return (HPY) on investment for David on January 1, 2016. [Hint: Be careful with how many rounds of coupons has David received during the holding period and thus how much interests (coupons and reinvestment of coupons) he has earned in total during the 2-year holding period.]                                                                                                                           

Please provide steps thanks

Suppose a credit card company wants to examine the difference between credit card spending on groceries and leisure. To do so, it generates a paired sample of 7 credit card customers’ spending in each category. Assume spending in each area is normally distributed. Data are in thousands.

1. If the credit card company believes the population difference in spending is $4,500 (4.5), test whether the mean spending difference in the sample is different from the population mean. Use a .05 level of significance.
2. What is the 95% confidence interval for the difference in spending?
3. Why is a paired sample better than an unpaired sample when testing hypotheses concerning the difference between two population means

Suppose a country that's currently experiencing a recessionary gap wishes to produce at its potential output level. Holding everything else constant, identify which of the following policy initiatives would surely be counter-productive. (Choose all that apply)

Imagine that we live in a country with free public education that is "take it or leave it" (i.e. families can either send their kids to public schools, or they can spend their own money to send them to private schools, but they can not add extra educational spending on top of the public schools). Now, assume the government implements a universal voucher program for education (i.e. families are given a fixed dollar amount per child that they can only spend on education for their children - they can spend up to the voucher amount or they can spend the voucher amount and add extra educational spending on top of the voucher). What does theory suggest will happen to total spending on education?

A. Introducing a universal voucher program will absolutely INCREASE total spending on education.

B. Introducing a universal voucher program will absolutely DECREASE total spending on education.

C. Introducing a universal voucher program will increase spending on education for children in some families, but also decrease spending on education for some children in other families. Thus, theory does not predict whether total spending will increase or decrease.

D. There is no theory that can analyze this situation.

Explain why

BugControl Ltd produces and sells bug repellent. Information about the budget for the last quarter of year 20X1 is as follows:

1. The company expects to sell 40,000 bottles of BugControl in September, 55,000 in October, 93,000 in November, and 36,000 in December. The selling price of BugControl is $8.95 per bottle.
2. The desired ending inventory of finished goods is equal to 20% of next month’s sales whereas the desired ending inventory for material is 15% of next month’s production requirements.
3. At the beginning of October, the company expects to have 57,000 grams of Chemical A, and 97,000 grams of Chemical B on hand.
4. A bottle of BugControl requires 6 grams of Chemical A and 10 grams of Chemical B. The cost of Chemical A is 12 cents per gram, the cost of Chemical B is 9 cents per gram.
5. The cost of direct labour is 60 cents per bottle and the cost of variable overhead is 90 cents per bottle. Fixed manufacturing overhead is $40,000 per month.
6. Variable selling and administrative expense is 12% of sales and fixed selling and administrative expense is $65,000 per month.

Required:

1. Prepare the Sales Budget for the last quarter of the year 20X1.
2. Prepare the Production Budget for October and November of the year 20X1.
3. Prepare a Direct Materials Purchases Budget for both chemicals for October 20X1.
4. Prepare the following budgets  for October 20X1:
   1. Direct Labour Cost
   2. Factory Overhead Cost
   3. Selling and Administrative Expenses
5. 4. Production unit cost computations (Assume the fixed overhead cost per unit is $0.82) and Cost of Goods Sold Budget
   5. Budgeted Income Statement

2. Fiscal policy

Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $16 billion. Four economists agree that expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used.

Economist A believes that the government spending multiplier is 4 and the tax multiplier is 2. Economist B believes that the government spending multiplier is 2 and the tax multiplier is 8.

Compute the amount the government would have to increase spending to close the output gap according to each economist's belief. Then, for each scenario, compute the size of the tax cut that would achieve this same effect.

Economist C favors tax cuts over increases in government spending. This means that Economist C likely believes that:

Tax cuts induce investment spending and improve workers’ incentives.

A dollar in tax cuts immediately and fully adds to aggregate demand.

Economist D is skeptical about the effectiveness of an increase in government spending as an expansionary fiscal policy. Which of the following statements is consistent with Economist D's belief?

How government spends money is less crucial to the success of policy than the magnitude of government spending.

The specifics of how the government spends money are crucial to the effectiveness of an expansionary policy.

Wall Street Journal article: San Francisco apartments market - Read the article and answer the questions at the end

Once Booming San Francisco Apartment Market Goes in Reverse City’s vacancy rate rose to 6.2% in May, up from 3.9% only three months ago

By Will Parker June 18, 2020 5:30 am ET

Rents in San Francisco, the most expensive apartment market in the U.S., are tumbling as the city’s vaunted tech sector sheds jobs and more tenants leave the city.

The apartment vacancy rate in San Francisco rose to 6.2% in May, according to apartment data firm RealPage. That’s up from 3.9% only three months ago, after stay-at-home orders went into effect and more people in the city decided not to renew their leases.

San Francisco’s median rent in May for a one-bedroom apartment was also down 9.2% compared with a year ago at $3,360 a month, according to listings platform Zumper. That was still the highest monthly rent of all major U.S. markets, Zumper said, and a reminder of how steeply rents in the city climbed before their more recent descent.

The dot-com boom of the 1990s drove San Francisco real-estate prices and fueled rent increases, while zoning limitations and high construction costs have kept new apartment supply in check. In more recent years, a growing number of tech employees have flocked to San Francisco, with more opting to take buses to nearby Silicon Valley corporate campuses from the city rather

than living in the suburbs.

Tall Buildings, Lower Rents Apartment asking rents are dropping in majormetros across the country Percentage change in median one-bedroomrents from May 2019 to May 2020 Source: Zumper Boston Los Angeles Chicago Denver 0-7.5% -5 -2.5 Now, the pandemic is upending San Francisco’s workforce more than in most cities, remaking part of its corporate landscape. Several large, high-paying companies, including Yelp Inc., and Lyft Inc., have begun laying off workers in the city. LendingClub reported to the California Employment Development Department earlier this month that it was permanently laying off 306 San Francisco employees.

San Francisco-based startup Stitch Fix Inc., meanwhile, is looking to save costs by hiring or relocating staff to cheaper cities outside of California like Pittsburgh and Cleveland. PG&E Corp. said this month it plans to move to Oakland, ending more than 100 years in San Francisco.

Other Bay Area businesses are allowing their employees to work from home indefinitely, making some San Franciscans question whether it still makes sense to pay exorbitant rents when they no longer have to live in the same city as their office.

“This is a very unusual market,” said local real-estate agent Joanne Fazzino. “Landlords can’t expect the same kind of rents they were expecting.”

San Francisco isn’t the only high-rent city brought back to earth. In Manhattan, the rental apartment vacancy rate is now at its highest point in at least 14 years, according to a report by real estate appraiser Jonathan Miller and brokerage Douglas Elliman. And RealPage found that for all of New York City, renters are signing leases at more than 8% off asking price on

average. Meanwhile, home sales are booming in the city’s suburbs.

Other cities that experienced high rent growth, like Nashville, Tenn.; Orlando, Fla.; Atlanta and Charlotte, N.C., have seen rental vacancy rates grow to 5% or more, according to data from RealPage.

In places where rents aren’t falling, price growth is easing. The pace of rent growth has slowed in 27 major markets over the past year, including Seattle and Austin, Texas, with rents actually falling in 11 of those 27 markets in just the past month, according to real-estate firm Zillow.

But Northern California is among the hardest hit. Rents for one-bedroom apartments are falling in San Francisco, San Jose and Fresno, and are close to flat in Oakland and Sacramento, according to Zumper. Rent cuts on new leases are 8% or more on average in both San Francisco and San Jose, RealPage said.

Still, a few hundred dollars shaved off the rent doesn’t bring prices down to what most people would think of as affordable. The Bay Area has a higher rate of rent-burdened households than do most parts of the country, defined as households spending more than 30% of their gross income on rent.

San Francisco’s City Hall is helping out. Last week, it decided to make permanent a temporary eviction moratorium, which was put in place to protect tenants from being evicted for failure to pay rent during the pandemic. The many renters protected from eviction could actually be preventing the city’s vacancy rate from being even higher.

Some market analysts think tenants shouldn’t expect rents to fall much further. Prices of homes for sale are also not coming down, and that ultimately pushes more people in renting, propping up demand for apartments.

For now, however, it is a renter’s market for a change. Sandeep Giri and his wife, Sunita, began searching for a new San Francisco home in April. For the first several weeks, they offered less than the asking rent. Rental managers wouldn’t even respond. But in June, the couple found a

three-bedroom, single-family home with an asking price of $5,800. The Giris’ lower offer of $5,400 was accepted without question.

“We were really pleasantly surprised,” he said.

The hunt played out very differently when Mr. Giri rented his first apartment during the late 1990s dot-com boom. “We had to literally stand in a long line of applicants, with a résumé and our credit score all printed out in our hands and people would like, outbid you, right in front of you,” he said.

Questions:

1. The article mentioned that the vacancy rate for apartments in San Francisco rose from 3.9 percent in February to 6.2 percent in May. Briefly explain how the rental market changed as the vacancy rate rose. How was the equilibrium price and quantity of apartments affected by this change?

2. The market for apartments in San Francisco is subject to rent control, which limits the amount of rent tenants can be charged and how much the cost of capital improvements can be passed on by landlords to their tenants. What impact does the imposition of rent control have on the quantity demanded of apartments? What impact does rent control have on the quantity supplied of apartments?

3. From the article: “For now…it is a renter’s market for a change.” Briefly explain what is meant by a “renter’s market.”

4. In the article, Sandeep Giri described the first time he and his wife searched for an apartment in San Francisco during the late 1990s: “We had to literally stand in a long line of applicants, with a résumé and our credit score all printed out in our hands and people would …outbid you….” What does this statement imply about the relationship between the quantity supplied and the quantity demanded of apartments in San Francisco in the late 1990s? Briefly explain your answer.

SimpsonSimpson ​Company's inventory records for the most recent year contain the following​ data:

Quantity Unit Cost

Beginning inventory 2,000 $8.00

Purchases during year 18,000 $10.00

Simpson Company sold a total of 19,800 units during this year.