Consider the following Data: MPS = .2 Autonomous spending is 100 What is the consumption function?

HSAs (Health saving Account) and FSAs (Flexible spending Account ) which is better? and why ?

Describe the adjustments in the production possibilities curves in each of the following situations for the Canadian economy. Explain thoroughly with words + graph in each of the below scenarios.

(a) (1.5 points) the economy moves from full employment into a deep recession
(b) (1.5 points) the economy makes great strides in eliminating discrimination
(c) (1.5 points) the end of the Cold War leads to cuts in military spending
(d) (1.5 points) the government significantly increases spending for health and education

1. Generally, when the economy is in a recession, what happens to inflation? How does unemployment change in a recession? Explain your answers.

2. Generally, when the economy is expanding, what happens to unemployment and inflation? Explain.

3. List and explain five factors, other than income, which can change the amount of overall consumption spending for an economy.

4. What did Keynes mean with the phrase “animal spirits”? How do animal spirits affect investment spending for an economy?

Suppose the economy is in a recession. Which of the following is a valid argument for using expansionary fiscal policy, instead of monetary policy?

Select one:

a. Fiscal policy is more effective than monetary policy in a deep recession

b. Fiscal policy is slower than monetary policy

c. Fiscal policymakers are subject to more political influence, so some of their spending tends to be wasteful.

d. Government spending could lead to lower growth through the crowding-out effect

1. Spending at All Levels of Government
   1. How much is spent, (not double counting the transfers from the federal government to state and local governments), by ALL levels of US government right now (2019 FY or 2018 full-year OK to report)?
2. 2. On a per capita basis, how much is this? Compare this amount of spending per person with the overall GDP per person of countries with GDP per person near those levels.
      
   3. As a share of GDP, how much is this?

In Chapter-3 and also in the growth model where we studied about the long run, deficit spending (a higher government spending for a given tax rate) appears to have a negative effect on the economy but in the IS-LM model we can see that the opposite is true. A higher G increases the GDP by enhancing demand. Which one do you think is true? Can you reconcile these two ideas? What is your conclusion in terms of practical policy?

Glitter Inc. uses one-quarter common stock and three-quarters debt to finance their operations. The after-tax cost of debt is 5 percent and the cost of equity is 13 percent.

The management of Glitter Inc. is considering an expansion project that costs $1.2 million. The project will produce a cash inflow of $50,000 in the first year and 150,000 in each of the following 10 years (i.e., $150,000 in years 2 through 11). What is the WACC and should Glitter Inc. invest in this project?

A) 10 percent, do not invest in project

B) 8.5 percent, yes invest in project

C) 8.5 percent, do not invest in project

D) 7 percent, yes invest in project

E) 7 percent, no do not invest in project

Upward Inc. has projected sales to be 10,300 units in January; 12,400 units in February; 8,800 units in March; 10,600 units in April; and 11,800 units in May. There are 860 units on hand on January 1. Management has determined that it needs to carry 4% of the following month’s sales in ending inventory. Assume that each unit requires 4 litres of raw materials. There are 6,300 litres of raw materials on hand at January 1. Management has decided that raw materials ending inventory should be 10% of next month’s production needs. Upward Inc. pays $1.90 per litre for raw materials.

Prepare a raw materials budget for the first quarter, by month and in total. Include quantity of materials to purchase and cost for the purchases.

Karyono has audited the financial statements of PT Lestari for the year ended December 31,2007. Karyono field work was completed on February 27, 2008; Karyono's auditor's report was dated February 28,2008, and was received by the management of PT Lestari on March 5 2008. On April 4,2008 the management of PT Lestari asked that Karyono approve inclusion of this report in their annual report to stockholders, which will include unaudited financial statements for the first quarter ended March 31, 2008. Karyono approved the inclusion of the auditor's report in the annual report to stockholders. Under the circumstances,Karyono is responsible for inquiring as to subsequent events occurring though:
A. February 27, 2008
B. February 28, 2008
C. March 31, 2008
D. April 4, 2008