Please read the following four examples below. Please identify what they are (i.e., discretionary fiscal policy, monetary policy, or automatic stabilizer) and explain why.  

a) A terrible recession occurs as a result of a bubble in the housing market bursting, and government-funded unemployment compensation is paid out to laid-off workers.

b) As the economy heats up, the resulting increase in equilibrium GDP results in higher income tax payments, which dampen consumption spending somewhat.

c) To stem an overheated economy, the president, using special powers granted by Congress, authorizes emergency impoundment of funds that Congress had previously authorized for spending on some government programs to help reduce government spending (G), and thus help reduce inflation.

d) The Federal Reserve decides to increase the money supply in order to help lower interest rates and stave off a more severe recession.

1) Who is responsible for U.S. monetary policy and what are the roles of the Federal Reserve (the Fed), Congress, and the president?

2) What role does the Fed play in our national debt and federal deficit?

3) How is our fiscal policy going to affect future generations?

4) Does government borrowing crowd out private-sector spending? Explain.

5) Do households generally make a distinction between spending for current expenses and spending for capital expenses? Compare borrowing $5,000 to take a vacation in Hawaii with borrowing $125,000 to buy a condominium and move out of your rented apartment. Explain.

6) Critics of “new accounting” for federal borrowing argue that it does not matter what the government spends the money on. What matters is the total amount that the government spends minus taxes collected. Explain this viewpoint.

Lola and Kira just opened their own bakery in Surrey. They are selling cakes, cupcakes, and muffins. The funds that Lola and Kira are receiving in exchange for their baked goods represent their Select one: a. profit b. variable revenues c. revenue d. profit margin e. markup

Which of the following is correct with regard to the economic system called communism? Select one: a. Overall production expands rapidly because of central planning. b. Producers and consumers control production and allocation decisions through supply and demand. c. In communism, the focus on centralized planning has caused a variety of choices in products at fair prices for consumers. d. In communist economy, the government owns all or most enterprises. e. Most government-operated enterprises are very efficient because of central planning.

Supply and Demand: In early 2020 the COVID-19 pandemic swept across the nation and world. In response, many workers moved from in-person working to remote working.
Webcams in particular showed an increase in the amount sold, especially the most well-known and trusted brands.

a. Most webcams are produced in China. The US is currently in a trade war with the Chinese which effectively causes additional costs on the production of Chinese goods through tariffs (i.e., taxes). Suppose after the next election, the US abandons the trade war and removes the tariffs. What effect should that have on the price of webcams?   

b. Logitech claims that it is ramping up capacity but is working to “overcome component shortages.” Using an elasticity of supply argument,explain what Logitech is claiming here. Do you expect that to last indefinitely?

(a) The price elasticity of demand for smoke grinders in response to changes in the price of purpletts is -2. What formula and concept will we use to study the change in quantity demanded of smoke grinders to a change in price of purpletts? What the -2 elasticity of demand tells us about the goods purpletts and smoke grinders? (b) Given the table below, answer the following question. The quantity demanded of which good decreases the most during a recession (when incomes decrease)?

Given the table below ( income elasticity of demand), answer the following question.

Total brand cereal = 0.3, eclipse galsses = -1.5, office chairs = 0, theater tickets = 4, heart shaped pillows = 2

The quantity demanded of which good decreases the most during a recession (when incomes decrease)?

Anderson Company is preparing budgets for the upcoming quarter ending October 31st. The marketing director has provided the following information to the Budget Committee. Currently, the company sells one product, the korda, for $25 per unit. Budgeted sales (in units) for the next five months are as follows:

August. 15,000

September. 45,000

October. 37,000

November. 25,500

December. 26,250

• To minimize the risk of stockouts, the company has a policy to maintain an ending inventory of 18% of the following month’s budgeted sales. At the beginning of the quarter, the company had 7,500 units of korda in inventory.

• Each unit of korda requires 2 kilograms of direct materials. The company has a policy that materials on hand at the end of each month must be a minimum of 20% of the following month’s production. At the beginning of the quarter, the company has 15,600 kilograms of direct materials on hand. Each kilogram of direct material costs $3.00.

• Each unit of korda requires 0.2 hours (12 minutes) of direct labour. The company pays employees a standard wage of $15.00 per hour. • The company applies overhead on the basis of direct labour hours. The variable manufacturing overhead rate is $12.00 per direct labour hour. Fixed overhead is $81,978 per month.

• The company has variable selling and administrative costs that are equal to $0.75 per unit sold. Fixed selling and administrative costs are estimated to be $100,000 per month. • All sales are made on account. The company collects 65% of the sales revenue in the month of the sale, and the remaining 35% in the month following the sale. At the start of 2 the quarter, the company has $45,000 in accounts receivable that are deemed to be fully collectible.

• As stated, the company pays $3.00 per kilogram of direct materials. The company pays for 70% the direct materials purchases in the month of the purchase and pays the remaining 30% in the month following the purchase. At the beginning of the month, the company owes $20,000 to creditors.

(A) Prepare a budgeted income statement for the quarter-end.

(B) Prepare the schedule of expected cash collections on sales for August, September, and October, and for the quarter-end.

(C) Prepare the schedule of expected cash disbursements for August, September, and October, and for the quarter-end.

Do all the Q1, Q2, Q3 and Q4

Understanding Relationships, Cash Budget, Pro Forma Balance Sheet

Ryan Richards, controller for Grange Retailers, has assembled the following data to assist in the preparation of a cash budget for the third quarter of the year:

1. Sales:

   May (actual)	$100,000
   June (actual)	120,000
   July (estimated)	90,000
   August (estimated)	100,000
   September (estimated)	135,000
   October (estimated)	110,000

2. Each month, 30% of sales are for cash and 70% are on credit. The collection pattern for credit sales is 20% in the month of sale, 50% in the following month, and 30% in the second month following the sale.
3. Each month, the ending inventory exactly equals 50% of the cost of next month's sales. The markup on goods is 25% of cost.
4. Inventory purchases are paid for in the month following the purchase.
5. Recurring monthly expenses are as follows:
   

   Salaries and wages	$10,000
   Depreciation on plant and equipment	4,000
   Utilities	1,000
   Other	1,700

6. Property taxes of $15,000 are due and payable on July 15.
7. Advertising fees of $6,000 must be paid on August 20.
8. A lease on a new storage facility is scheduled to begin on September 2. Monthly payments are $5,000.
9. The company has a policy to maintain a minimum cash balance of $10,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All payments on principal and interest are made at the end of a month. The annual interest rate is 9%. The company must borrow in multiples of $1,000.
10. A partially completed balance sheet as of June 30 follows. (Note: Accounts payable is for inventory purchases only.)

    Cash	$     ?
    Accounts receivable	?
    Inventory	?
    Plant and equipment, net	425,000
    Accounts payable				$     ?
    Common stock				210,000
    Retained earnings				268,750
    Total	$    ?			$    ?

Required:

1. Complete the balance sheet given in Item j.

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1. Use the accounting equation (assets = liabilities and owners' equity).

2. Prepare a cash budget for each month in the third quarter and for the quarter in total (the third quarter begins on July 1). Prepare a supporting schedule of cash collections. If an amount is zero, enter "0" or leave the entry box blank.

3. Prepare a pro forma balance sheet as of September 30.