In a Human Capital Solow Model. What happens to total capital stock (human and physical) per work, output per worker, output, and consumption per worker over time when:

A) G spending on military ↑
B) G spending on education, infrastructure, healthcare ↑
C) T ↑
D) Foreign Direct Investment (trade) allows domestic investment (I) to ↑

The Dynamic Credit Company issues credit cards and uses software to detect fraud. After tracking the spending habits of one customer, it is found that charges over $100 constitute 35.8% of the credit transaction. Among 30 charges made this month, 18 involve totals that exceed $100. Does this constitute an unusual spending pattern that should be verified? Explain.

Many government programs have both an efficiency-enhancing function and an equity / redistributive function. Choose any government spending program.

a. Which government spending program did you choose?

b. Describe two ways in which the program you chose enhances efficiency.

c. Describe two ways in which the program you chose redistributes income.

1) An economy is currently producing at an equilibrium level of real GDP of $14 trillion. What will happen if government spending (alone, with no other changes) decreases by $100 billion? Will real GDP increase or decrease? Explain why it will change by $100 billion, by less, or by more.

2)Explain why rising prices reduce the spending multiplier effect of an increase in aggregate demand.

An economy has no government sector and no international trade. One year, desired investment spending equals $481 billion, consumption spending in this economy equals $623 billion, and total output equals $1,401 billion.

4.1 Is this economy in equilibrium? Explain why or why not.

4.2 What is the unplanned increase in inventories in this economy?

4.3 What is total investment in this economy?

Custom Prints Inc. (CPI) specializes in logo-imprinted coffee mugs. CPI tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, December 31. The inventory’s selling price is $11 per unit.

1. Compute the amount of goods available for sale at December 3 [1 mark]

2. Compute the ending inventory, and cost of goods sold at December 31, under each of the following inventory costing methods: Specific identification, first in first out, weighted average method

1. Assuming that the December 10 sale was from the beginning inventory and the December 17 sales was the December 12 purchase. [2 marks]

Cost of goods sold =

Ending Inventory =

1. Assume that the actual amount of one of a company’s variable expenses was $45,198. The company’s planned level of activity was 19,000 machine-hours, and its actual level of activity was 18,475 machine-hours. The spending variance for this particular expense was $9,114 favorable. The cost formula per machine-hour for this expense is:

• $1.92.

• $1.96.

• $2.88.

• $2.94.

2. Assume a company is considering using available space to make 10,000 units of a component part that it has been buying from a supplier for a price of $40.50 per unit. The company’s accounting system estimates the following costs of making the part:

One-half of the traceable fixed manufacturing overhead relates to a supervisor that would have to be hired to oversee production of the part. The remainder of the traceable fixed manufacturing overhead relates to depreciation of equipment that the company already owns. This equipment has 20,000 units of unused capacity, no resale value, and it does wear out through use. The allocated fixed manufacturing overhead relates to general overhead costs, such as the plant manager’s salary, lighting, heating and cooling costs, and plant insurance costs. What is the financial advantage (disadvantage) of making 10,000 units instead of buying them from the supplier?

• $(20,000)

• $20,000

• $(55,000)

• $55,000

3. Assume the following:

• The standard price per pound is $2.10.
• The standard quantity of pounds allowed per unit of finished goods is 4 pounds.
• The actual quantity of materials purchased was 53,000 pounds, whereas the quantity of materials used in production was 50,400 pounds.
• The actual purchase price per pound of materials was $2.25.
• The company produced 13,000 units of finished goods during the period.

What is the materials quantity variance?

• $5,460 F

• $5,850 F

• $3,600 F

• $3,360 F

4.Assume the following information appears in the standard cost card for a company that makes only one product:

During the most recent period, the following additional information was available:

• 21,200 pounds of material was purchased at a cost of $10.50 per pound.
• All of the material that was purchased was used to produce 3,900 units.
• 8,000 direct labor-hours were recorded at a total cost of $132,000.

What is the direct materials price variance?

• $9,750 F

• $10,600 U

• $10,600 F

• $9,750 U

5. Assume a company’s estimated sales is 32,000 units. Its desired ending finished goods inventory is 8,500 units, and its beginning finished goods inventory is 3,500 units. What is the required production in units?

• 44,000 units

• 28,500 units

• 20,000 units

• 37,000 units

6. Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked):

The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. The actual amount of supplies expense for the period was $7,830. What is the spending variance for supplies expense?

• $230 U

• $230 F

• $460 U

• $460 F

7. Assume the following (1) variable expenses = $308,000, (2) unit sales = 10,000, (3) the contribution margin ratio = 20%, and (4) net operating income = $10,000. Given these four assumptions, which of the following is true?

• The total fixed expenses = $61,600

• The total sales = $369,600

• The break-even point in sales dollars is $335,000

• The total contribution margin = $246,400

Which of the following statement is incorrect? Select one:

a. Calvin Klein, Liz Claiborne, The Gap, and other garment industry companies that manufacture clothing outside of the United States to control labor costs must balance the moral issues of human rights against their obligations to stockholders.

b. Psychological and political factors also affect exchange rates.

c. Most of the answers are correct.

d. When the U.S. dollar strengthens against the Mexican peso, U.S. importers of Mexican goods will require more dollars to purchase Mexican goods that are sold in pesos.

e. The risk that a multinational corporation faces due to fluctuating exchange rates can be managed by using forward contracts, futures contracts, and currency swaps.

1. What are the most important instruments of international economic policy? Check all that apply.

A. External balance

B. Income-changing instruments

C. Expenditure-changing instruments

D. Expenditure-switching instruments

2. Evaluate the following statement about expenditure-changing and expenditure-switching policies.

An expenditure-changing policy induces changes in aggregate demand, via fiscal policy or monetary policy, whereas an expenditure-switching policy diverts expenditures away from foreign goods to domestic goods.

A. True

B. False

Which of the following are examples of an expenditure-changing policy? Check all that apply.

A. Currency devaluation

B. Fiscal policy

C. Monetary policy

D. Import barriers