Suppose that the lump-sum and the proportional tax systems coexist in the economy. Consider the following fiscal policy changes: the government increases the labor income tax rate and gives the money back to the consumer through a decrease in lump-sum tax in a way that an increase in consumer’s labor income tax amount and a decrease in lumpsum tax amount offset each other. Are consumer’s optimal choices affected by these fiscal policy changes? Explain why or why not. (Note: There are opposing effects working in this example. For full credit, you should explain how each effect works on the changes in optimal c and l, followed by the total effect.)

1. In general, derivative instruments are

a. Not reported in a company's balance sheet, because their impact on the company is not yet known

b. Reported in the balance sheet at fair value and changes in their fair value are reported in earnings

c. Reported in the balance sheet at historical cost and changes in their fair value are reported in earnings

d. Reported in the balance sheet at fair value and changes In they fair value are reported in other comprehensive income

2. A company can accomplish off-balance sheet financing using all of the following except

a. Operating leases

b. Zero-coupon bonds

c. Special purpose entities

d. All of the above

A publically traded company more than doubled its EPS by changing depreciation methods. In justifying the change, management supported the change as follows: In comparison to direct competitors, the previous depreciation method was more conservative and thus had a negative impact on earnings. Although difficult to prove, there is considerable evidence that accounting changes are made for reasons other than improved financial reporting. GAAP are flexible in the initial selection of accounting methods and in making subsequent changes. However, the accounting standards specifically require that only changes to preferable accounting methods be made. Does this violate GAAP? Is this ethical? What would be an alternative course of action?  

Light can be seen through glass, water, and other transparent materials. When light is incident on a transparent material (such as water) at an angle, which of the following are true? (Select all that apply.)

A. The light will all be reflected and will not enter the transparent material.

B. The speed of the light changes as it enters the transparent material.

C. The frequency of the light changes as it enters the transparent material.

D. The speed of light remains constant as it enters the transparent material.

E. The direction of light remains constant as it enters the transparent material.

F. The frequency of the light remains constant as it enters the transparent material.

G. The direction the light is moving changes as it enters the transparent material.

According to Hall, consumption spending follows a random walk. 1. What determines changes in consumption in this case? 2. What is the implication of following a random walk for predicting changes in consumption? What is the impact on current consumption of a temporary tax cut according to: 3. the Keynesian consumption function? 4. the permanent-income hypothesis?

The Federal Budget

1. What would you do if you had a magic budget wand, and you could make three changes to the way we raise federal revenues on an annual basis?
2. Using that same wand what three changes would you make in how we spend that money on an annual basis?

The Federal Budget

1. What would you do if you had a magic budget wand, and you could make three changes to the way we raise federal revenues on an annual basis?
2. Using that same wand what three changes would you make in how we spend that money on an annual basis?

Revisit the picture of leadership you created in the first module. Contrast your picture of leadership with the description of transformational leadership in the readings. Has your picture of leadership changed? In what ways?Consider these changes for a moment: are they based on behavior, thinking, or worldview? How might these changes support or overturn assumptions or perceptions of transformative leadership?