Assume that in the first quarter of 2020, real GDP and potential GDP were both $20 trillion and the unemployment rate was 3.5%. Assume that potential GDP is still $20 trillion in the second of 2020 but that actual real GDP is $19 trillion.

a. What is the annualized growth rate of real GDP between the first and second quarters?

b. What is the output gap in the second quarter of 2020?

c. According to Okun’s law, what will be the unemployment rate in the second quarter of 2020?

d. Assume that in the second quarter consumption is equal $13 trillion, net exports are equal to -$0.5 trillion, and government purchases and planned investment are both equal to $3 trillion. What is the amount of inventory investment?

Calculate the future value of the following annuity streams: (LG 2-9) a. $5,000 received each year for five years on the last day of each year if your investments pay 6 percent compounded annually. b. $5,000 received each quarter for five years on the last day of each quarter if your investments pay 6 percent compounded quarterly. c. $5,000 received each year for five years on the first day of each year if your investments pay 6 percent compounded annually. d. $5,000 received each quarter for five years on the first day of each quarter if your investments pay 6 percent compounded quarterly.SHOW in excel please.

Describe the effect of government's cutting spending would most likely have on: (1) the aggregate demand curve (2) inflation (3) unemployment rate

3. Betty Lovelace wants to set up a fund which will provide in perpetuity a scholarship of $2,600 to a deserving student at the end of each year with the first payment being made one year from today . Find the amount Betty should deposit today into the fund to provide for this scholarship if the interest rate is 3.8% compounded quarterly

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

• Each T-shirt is expected to sell for $23.
• The purchasing manager buys the T-shirts for $9 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to fill 33 percent of the next quarter’s sales demand.
• Selling and administrative expenses are budgeted at $96,000 per quarter plus 12 percent of total sales revenue.

Required:
1. Determine budgeted sales revenue for quarters 1, 2, and 3.
2. Determine budgeted cost of merchandise purchased for quarters 1, 2, and 3.
3. Determine budgeted cost of good sold for quarters 1, 2, and 3.
4. Determine selling and administrative expenses for quarters 1, 2, and 3.
5. Complete the budgeted income statement for quarters 1, 2, and 3.

Part 1:

Budgeted Sales Revenue : Quarter 1: Quarter 2: Quarter 3:

Part 2:

Budgeted cost of Merchandise Purchased : Quarter 1 : Quarter 2 : Quarter 3 :

Part 3

Budgeted cost of goods sold : Quarter 1: Quarter 2: Quarter 3 :   

Part 4

Budgeted Selling ad administrative expenses : Quarter 1: quarter 2 : Quarter 3 :

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1.         Using the Aggregate Demand-Aggregate Supply logic of Chapter 10, suppose that at first, the economy is at long-run equilibrium, on both the short-run and long-run aggregate supply curves (in other words, unemployment is at the Natural Rate of Unemployment). Then, government spending rises with no change in taxes.   

A.        What happens in the short-run to output (Y) and the prices of goods?

Explain why using Aggregate Demand and Supply logic (you don’t need to draw the graphs unless you want to).

B.        In the short-run, is there a surplus or a shortage of goods? Is there a surplus or a shortage of labor? (No need to explain)

C.        Because of the shortage/surplus in part B, what happens to the prices of goods as we move beyond the short run toward the long-run? What happens to the wages of workers? (no need to explain)

D.        In the end, in the long-run, will the prices be higher, lower, or equal to what they were before anything changed? In the end, will unemployment be higher, lower, or equal to the Natural Rate of Unemployment? Explain your answer.

Morrisey & Brown, Ltd., of Sydney, Australia, is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company’s income statements for the three most recent months follow:

(Note: Morrisey & Brown, Ltd.’s Australian-formatted income statement has been recast into the format common in Canada. The Australian dollar is denoted by A$.)

2-a. Using the high-low method, separate each mixed expense into variable and fixed elements.

2-b. Using the high-low method, state the cost formula for each mixed expense.

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

2. Actual sales for December and budgeted sales for the next four months are as follows:

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.

4. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

5. Monthly expenses are budgeted as follows: salaries and wages, $36,000 per month: advertising, $60,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $45,460 for the quarter.

6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8. During February, the company will purchase a new copy machine for $3,100 cash. During March, other equipment will be purchased for cash at a cost of $80,500.

9. During January, the company will declare and pay $45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter:

1. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursements for merchandise purchases:

3. Cash budget:

4. Prepare an absorption costing income statement for the quarter ending March 31.

5. Prepare a balance sheet as of March 31.

Complete the Schedule of expected cash collections:

Complete the merchandise purchases budget:

Complete the schedule of expected cash disbursements for merchandise purchases.

• Required 2A

Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.

Prepare an absorption costing income statement for the quarter ending March 31

4.      Create a memo in Word. Comment on the trend shown in question 1 above.  During the first 5 days, was the euro rising or falling? And during those 10 days?                

5.    Most of your exports to the US belong to the model 600 RTM. The experience shows that, if the price of this product rises over 78000 dollars, the exported units will be reduced.  If this product is priced in euros, and assuming the trend shown in question 1 continues, what would be the consequences for your company’s exports?           

Q1.    In the table below are the euro-dollar exchange rates for the first ten days of November 2019. The data shows dollar per euro. Draw a line chart that shows the evolution of the euro relative to the dollar. Add a trendline.

                                    USD

            10/11/2019      1,0385

            09/11/2019      1,0443

            08/11/2019      1,0262

            07/11/2019      1,0481

            06/11/2019      1,0385

            05/11/2019      1,0566

            04/11/2019      1,0384

            03/11/2019      1,0301

            02/11/2019      1,0139

            01/11/2019      1,0019

Kaizen Costing Gordon Company produces custom-made machine parts. A setup activity is required for the batches of parts that it produces. Activity output is measured using setup hours. The value-added standard (SQ) for this activity is zero. On July 1, at the beginning of the fiscal year, 18 setup hours were allowed and used per batch. The standard wage rate for setup labor is $17 per setup hour. During the first quarter of the new fiscal year, the company is planning to implement a new setup method developed by Gordon’s industrial engineers that is expected to reduce setup time by 20 percent. The new procedure was implemented during the first quarter and the improvement expected was realized. If required, round hours to two decimal places and costs to the nearest cent. Required: 1. What is the setup standard for setup hours and the associated expected cost at the beginning of the first quarter? (set up standard hours per batch, and expected cost per batchs. 2.the kaizen standard and expected associated cost? 3.what is the setup standard for setup hours and the associated cost at the end of the first quarter? (setup standard, expected cost) 4. What if the new procedure implemented in the first quarter only produced a 10 percent reduction in setup time instead of the expected 20 percent reduction? what would the new maintance and standard cost be? (maintance standard per batch cost and standard batch cost)