Suppose you run the central bank in an open economy. What happens to the following variables of interest in response to the below events (analyze each event separately)?

I) The president cuts government spending to reduce the budget deficit

II) The president restricts the import of Chinese goods

Use the standard open economy IS-LM model (not the Fleming-Mundell model). Also, assume direct effects of shifts are larger than indirect effects.

a) IS – Direct Effect (increase / decrease / indeterminate / no change)?

b) IS – Exchange Rate Effect (increase / decrease / indeterminate / no change)?

c) LM (increase / decrease / indeterminate / no change)?

d) Interest rate (increase / decrease / indeterminate / no change)?

e) Exchange rate (increase / decrease / indeterminate / no change)?

f) Output (increase / decrease / indeterminate / no change)?

g) If the goal of the Central Bank is to stabilize income, the bank should change the money supply in which way (increase / decrease / no change)?

Provide a microeconomic analysis of suppliers with explanation and analysis of forecasts  of labor, capital stock, and intermediate inputs as it relates to the agrochemical industry in the United States and Syngenta specifically.

You’ll need to identify the suppliers of intermediate goods, labor, and discuss the physical capital stock. Here you’ll want to discuss the outlook for oil prices, which influence the macroeconomic outlook, and are an important intermediate input into any good that is transported (as well as anything plastic). You will also want to discuss labor supply. Who are the firm’s employees? Are they highly educated? Does your firm hire locally or nationally? You will use data on the unemployment rate here. Here is where you can discuss the physical capital stock (machinery, buildings). This is natural place to discuss the connection between monetary policy (interest rates) and investment spending. For instance, is the expected interest rate environment conducive to additional investment in the capital stock.

Summer Breeze Inc. (SBI) is a retail outlet specializing in equipment and apparel for the summer months. SBI is trying to prepare a comprehensive budget for the first quarter of 2018. SBI has accumulated the following data:

SBI sales are seasonal, growing through June and then declining through the rest of the year.

December 2017 sales were $200,000. November 2017 sales were $150,000.

Cost of goods sold is 76% of sales.

Fixed Selling, General & Administrative Expenses are $50,000 per month. Variable selling expenses (commissions) are 10% of sales. SG&A are paid in the month incurred. Commissions are paid the following month.

Depreciation is $60,000 annually.

Other Payables on the December 31, 2017 Balance Sheet includes Taxes Payable - $8,200 and Commissions Payable - $20,000.

The Income Tax rate is 40%. Taxes are paid the month after they are incurred.

SBI’s inventory policy is to maintain enough inventory to meet 20% of next month’s sales.

Sales are collected 70% in the current month, 20% in the month after sale and 10% in the second month after sale.

Purchases are paid 75% in the month of purchase and 25% in the month after purchase.

SBI has a line of credit with a local bank. The line of credit has a $200,000 limit and 6% rate. Borrowings are made on the last day of the month. Interest Expense is recognized the following month. Interest is paid the month after the expense is recognized.

SBI’s policy is to maintain a minimum cash balance of $10,000

SBI pays a $500 dividend to its shareholders each month.

Projected sales are as follows:

Use the information above to prepare SBI’s comprehensive budget for the first quarter of 2018. SBI’s budgets follow the format on the following pages. Round all balances to the nearest dollar.

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Required: Create SBI’s master budget using an Excel spreadsheet that follows the format above. Only the professionally completed budget is required

Summer Breeze Inc. (SBI) is a retail outlet specializing in equipment and apparel for the summer months. SBI is trying to prepare a comprehensive budget for the first quarter of 2018. SBI has accumulated the following data:

SBI sales are seasonal, growing through June and then declining through the rest of the year.

December 2017 sales were $200,000. November 2017 sales were $150,000.

Cost of goods sold is 76% of sales.

Fixed Selling, General & Administrative Expenses are $50,000 per month. Variable selling expenses (commissions) are 10% of sales. SG&A are paid in the month incurred. Commissions are paid the following month.

Depreciation is $60,000 annually.

Other Payables on the December 31, 2017 Balance Sheet includes Taxes Payable - $8,200 and Commissions Payable - $20,000.

The Income Tax rate is 40%. Taxes are paid the month after they are incurred.

SBI’s inventory policy is to maintain enough inventory to meet 20% of next month’s sales.

Sales are collected 70% in the current month, 20% in the month after sale and 10% in the second month after sale.

Purchases are paid 75% in the month of purchase and 25% in the month after purchase.

SBI has a line of credit with a local bank. The line of credit has a $200,000 limit and 6% rate. Borrowings are made on the last day of the month. Interest Expense is recognized the following month. Interest is paid the month after the expense is recognized.

SBI’s policy is to maintain a minimum cash balance of $10,000

SBI pays a $500 dividend to its shareholders each month.

Projected sales are as follows:

Use the information above to prepare SBI’s comprehensive budget for the first quarter of 2018. SBI’s budgets follow the format on the following pages. Round all balances to the nearest dollar.

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Required: Create SBI’s master budget using an Excel spreadsheet that follows the format above. Only the professionally completed budget is required

Summer Breeze Inc. (SBI) is a retail outlet specializing in equipment and apparel for the summer months. SBI is trying to prepare a comprehensive budget for the first quarter of 2018. SBI has accumulated the following data:

SBI sales are seasonal, growing through June and then declining through the rest of the year.

December 2017 sales were $200,000. November 2017 sales were $150,000.

Cost of goods sold is 76% of sales.

Fixed Selling, General & Administrative Expenses are $50,000 per month. Variable selling expenses (commissions) are 10% of sales. SG&A are paid in the month incurred. Commissions are paid the following month.

Depreciation is $60,000 annually.

Other Payables on the December 31, 2017 Balance Sheet includes Taxes Payable - $8,200 and Commissions Payable - $20,000.

The Income Tax rate is 40%. Taxes are paid the month after they are incurred.

SBI’s inventory policy is to maintain enough inventory to meet 20% of next month’s sales.

Sales are collected 70% in the current month, 20% in the month after sale and 10% in the second month after sale.

Purchases are paid 75% in the month of purchase and 25% in the month after purchase.

SBI has a line of credit with a local bank. The line of credit has a $200,000 limit and 6% rate. Borrowings are made on the last day of the month. Interest Expense is recognized the following month. Interest is paid the month after the expense is recognized.

SBI’s policy is to maintain a minimum cash balance of $10,000

SBI pays a $500 dividend to its shareholders each month.

Projected sales are as follows:

Use the information above to prepare SBI’s comprehensive budget for the first quarter of 2018. SBI’s budgets follow the format on the following pages. Round all balances to the nearest dollar.

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Required: Create SBI’s master budget using an Excel spreadsheet that follows the format above. Only the professionally completed budget is required

Master Budget Project

Summer Breeze Inc. (SBI) is a retail outlet specializing in equipment and apparel for the summer months. SBI is trying to prepare a comprehensive budget for the first quarter of 2018. SBI has accumulated the following data:

·       SBI sales are seasonal, growing through June and then declining through the rest of the year.

·       December 2017 sales were $200,000. November 2017 sales were $150,000.

·       Cost of goods sold is 76% of sales.

·       Fixed Selling, General & Administrative Expenses are $50,000 per month. Variable selling expenses (commissions) are 10% of sales. SG&A are paid in the month incurred. Commissions are paid the following month.

·       Depreciation is $60,000 annually.

·       Other Payables on the December 31, 2017 Balance Sheet includes Taxes Payable - $8,200 and Commissions Payable - $20,000.

·       The Income Tax rate is 40%. Taxes are paid the month after they are incurred.

·       SBI’s inventory policy is to maintain enough inventory to meet 20% of next month’s sales.

·       Sales are collected 70% in the current month, 20% in the month after sale and 10% in the second month after sale.

·       Purchases are paid 75% in the month of purchase and 25% in the month after purchase.

·       SBI has a line of credit with a local bank. The line of credit has a $200,000 limit and 6% rate. Borrowings are made on the last day of the month. Interest Expense is recognized the following month. Interest is paid the month after the expense is recognized.

·       SBI’s policy is to maintain a minimum cash balance of $10,000

·       SBI pays a $500 dividend to its shareholders each month.

·       Projected sales are as follows:

Use the information above to prepare SBI’s comprehensive budget for the first quarter of 2018. SBI’s budgets follow the format on the following pages. Round all balances to the nearest dollar.

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Master Budget (Continued)

Summer Breeze Inc. Budget Template

Required: Create SBI’s master budget using an Excel spreadsheet that follows the format above. Only the professionally completed budget is required. In addition, a cover page with the assignment name, your section time, team member names and team number should be included.

#1

In what ways is criminal behavior similar to consumer behavior? Why do most people obtain goods via legal behavior as opposed to illegal behavior? What are society's main option for reducing illegal behavior?

#2

Critique the following statement:

"The problem with our democratic institutions is that they don't correctly reflect the will of the people! If the people - rather than self-interested politicians or lobbyists - had control, we wouldn't have to worry about government taking actions that don't maximize allocative and productive efficiency.

Note, a critique is an evaluation of what was said. I want you to critique the thinking behind this particular statement. Tell my why it is or isn't a logical or rational argument. This is meant to be an argumentative essay where you state your position and then defend it.

Procter & Gamble Embraces Continuous Planning and Execution

The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer health, and personal care and hygiene products; these products are organized into several segments including Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine, & Family Care. Before the sale of Pringles to Kellogg's, its product portfolio also included foods, snacks, and beverages.

Procter & Gamble's mission statement is “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come.”

The Procter & Gamble Company today expanded its sustainability goals to continue creating value with consumer-preferred brands and products while conserving resources, protecting the environment, and improving social conditions for those who need it most.
P&G is guided by 12 established Environmental Sustainability Goals toward its vision of 100% renewable energy use, 100% renewable or recycled materials for all products and packaging, and zero consumer and manufacturing waste going to landfills. Since establishing its goals in 2010, P&G has made considerable progress. There now are 70 zero-waste manufacturing sites; energy consumption, water use, C02 emissions, and truck transportation are all down significantly; use of renewable energy and the number of virgin-materials certifications are up substantially. P&G also has expanded its social sustainability work, touching and improving the lives of more than 50 million people each year through disaster relief and programs such as Children’s Safe Drinking Water and the Pampers UNICEF partnership.



Nowadays, P&G has operated on the global stage for decades and has seen its share of challenges, failures and successes along the way. The company successfully operates in over 180 countries. Also, P&G has created a groundbreaking business intelligent system called Business Sphere which allows it to respond rapidly to changes in the marketplace and uncover new opportunities. It is a visually immersive data environment that transforms decision-making at P&G by harnessing real-time business information from around the globe.

Moreover, comparing the results to its competitors, P&G reported Total Revenue decrease in the fourth quarter of 2015 by -16.1%, despite revenue increase by most of its competitors of 0.17 %, recorded in the same quarter. With net margin of 19.08% P&G achieved higher profitability than its competitors.

The Procter & Gamble Company’s management strategy follows goals for optimization in efficiency and effectiveness in satisfying various needs of the business in consumer goods markets worldwide. For example, based on higher productivity, Procter & Gamble’s managers can implement higher production capacity directives. These conditions contribute to the company’s ability to stabilize its global business.

Procter & Gamble’s managers are concerned about product specifications and development within organizational capabilities, while supporting goals for innovation. In applying this approach, the company’s managers focus on cost minimization without sacrificing product quality. In addition, quality management’s objective at P&G is to implement quality standards based on the expectations of target customers or consumers.

Also, Procter & Gamble’s objective is to develop and implement short-term and intermediate operational schedules for optimum utilization of resources to support business needs. For example, Procter & Gamble’s corporate office employees adhere to their fixed schedules for data processing and analysis. On the other hand, operations managers apply rotating schedules for manufacturing processes. Some of these rotating schedules are variable to enable Procter & Gamble to correspondingly vary its productivity as a way of addressing changes in market demand for consumer goods.

1. The external environment is continually changing and dynamic environments are more the norm than the exception. Managers should effectively plan in such environment.
a. Do you believe in that? How can managers plan effectively in such environment? ?
b. How turbulent is Proctor & Gamble’s environment and how well do you believe that they adapt to it? Support your answer by example from the case .

1. There are two economies, Essos and Westoros. In Essos, most aggregate economic shocks happen in the market for goods and services. In Westoros, money demand fluctuates a lot but the demand for goods and services is very stable. In each economy, the central bank is contemplating two alternative monetary policies:
   • Policy 1: pick a target interest rate, and try to hold it constant by varying the money supply.
   • Policy 2: pick a target amount of money supply, and try to hold it constant by letting the interest rate adjust freely.

The central banks' goal is to "stabilize" the economy, that is, to make GDP fluctuate as little as possible. Which of the two policies should Essos and Westoros each adopt? Why? (Hint: you will need to use the Liquidity Preference model AND the IS-LM model)