Discussion Questions:

1. Discuss the different types of unemployment that exist in the economy.
2. Explain what is participation rate in the labor force?
3. How much does the labor force participation rate affect the unemployment rate?
4. Do you think one type of unemployment is worse than others and why?
5. What can governments do to assist in reducing this type of unemployment?

Calculations:

1. Table 1.0 below provides nominal GDP, real GDP and GDP deflator data.

(a)            Complete Table 1.0

(b)             What is the base year for the GDP deflator?

(c)             Calculate the percentage change in nominal GDP, real GDP, and the GDP deflator between 2014 and 2015.

(d)            Was the increase in nominal GDP due mostly to an increase in real GDP or to an increase in the price level?            

TABLE 1.0

2. Consider the following data on Canadian GDP:

                                NOMINAL GDP                             GDP DEFLATOR

YEAR             (IN BILLIONS)                (BASE YEAR 2010)

2011                              $725                                         101.2                                          

2012                               $762                                             102.4

a.            What was the growth rate of nominal income between 2011 and 2012? (Note: The growth rate is the percentage change from one period to the next.)

b.            What was the growth rate of the GDP deflator between 2011 and 2012?

c.            What was real income in 2011 measured in 2010 prices?

d.            What was real income in 2012 measured in 2010 prices?

e.            What was the growth rate of real income between 2011 and 2012?

f.            Was the growth rate of nominal income higher or lower than the growth rate of real income? Explain.

3. Suppose that the residents of Wolfgang spend all of their income on cauliflower, broccoli, and carrots. In 2014 they buy 100 heads of cauliflower for $200, 50 bunches of broccoli for $75, and 500 carrots for $50. In 2015 they buy 75 heads of cauliflower for $225, 80 bunches of broccoli for $120, and 500 carrots for $100. If the base year is 2014, what is the CPI in both years? What is the inflation rate in 2015?

**answer all question thoroughly for good rating**

Experiment 2 Diffusion - Concentration Gradients and Membrane Permeability Experiment Inventory

Materials 10 mL 1% Glucose Solution, C6H12O6 4 mL 1% Iodine-Potassium Iodide (IKI) 5 mL Liquid Starch, C6H10O5 4 Glucose Test Strips 4 Small Rubber Bands (Latex Warning: Handle with gloves on if allergic.) *Permanent Marker *Water *Scissors *Paper Towels *Stopwatch/Timer

Labware (5) 100 mL Beakers 6 Pipettes Ruler 100 mL Graduated Cylinder **15.0 cm Dialysis Tubing

**Be sure to measure and cut only the length you need for this experiment. Reserve the remainder for later experiments.

lab

EXPERIMENT DIFFUSION – CONCENTRATION GRADIENTS AND MEMBRANE PERMEABILITY **In this experiment, you will dialyze a solution of glucose and starch to observe the effect of a selectively permeable membrane on the diffusion of these molecules. To assess the movement of these molecules, you will use indicators. An indicator is a substance that changes color when in the presence of the substance it indicates. You will be using an indicator to test for the presence of starch and glucose. Attention! • Do not allow the open end of the dialysis tubing to fall into the beaker. If it does, remove the tube and rinse thoroughly with water before refilling it with the starch/glucose solution and replacing the tubing to the beaker. • Dialysis tubing must be soaked in water before you will be able to open it up to create the dialysis “bag.” Follow these directions for this experiment:

1. Soak the tubing in a beaker of water for 10 minutes. 2. Place the dialysis tubing between your thumb and forefinger, and rub the two digits together in a shearing manner. This motion should open up the “tube” so that you can fill it with the different solutions. • If you make a mistake, the dialysis tubing can be rinsed and used again. • You may need to reuse beakers throughout this experiment. When this is the case, clean beakers between uses.

PROCEDURE 1. Measure and pour 50 mL of water into a 100 mL beaker using the 100 mL graduated cylinder. 2. Label this beaker “water.” Cut a piece of dialysis tubing 15 cm long. Submerge the dialysis tubing in the water for at least 10 minutes. 3. Measure and pour 82 mL of water into a second 100 mL beaker using the 100 mL graduated cylinder. Label this beaker “dialysis.” This is the beaker you will put the filled dialysis bag into in Step 10. 4. Make the glucose/starch mixture. Use a graduated pipette to add 5 mL of glucose solution to a third 100 mL beaker and label it “dialysis bag solution.” Use a different graduated pipette to add 5 mL of starch solution to the same beaker. Mix by pipetting the solution up and down six times. 5. Using the same pipette that you used to mix the dialysis bag solution, remove 2 mL of the dialysis bag solution and place it in a clean beaker. Label this beaker “positive control.” This sample will serve as your positive control for glucose and starch. a. Dip one of the glucose test strips into the 2 mL of glucose/starch solution in the fourth beaker. After 1 minute has passed, record the final color of the glucose test strip in Table 2. This is your positive control for glucose. b. Use a pipette to transfer approximately 0.5 mL of IKI into the 2 mL of glucose/starch solution in the fourth beaker. After 1 minute has passed, record the final color of the glucose/starch solution in the beaker in Table 2. This is your positive control for starch. 6. Using a clean pipette, remove 2 mL of water from the “dialysis” beaker and place it in a clean beaker. Label this beaker “negative control.” This sample will serve as your negative controls for glucose and starch. a. Dip one of the glucose test strips into the 2 mL of water in the beaker. After 1 minute has passed, record the final color of the glucose test strip in Table 2. This is your negative control for glucose. b. Use a pipette to transfer approximately 0.5 mL of IKI into the 2 mL in the beaker. After 1 minute has passed, record the final color of the water in the beaker in Table 2. This is your negative control for starch. Note: The color results of these controls determine the indicator reagent key. You must use these results to interpret the rest of your results. 7. After at least 10 minutes have passed, remove the dialysis tube, and close one end by folding over 3.0 cm of one end (bottom). Fold it again, and secure with a rubber band (use two rubber bands if necessary). 8. Test to make sure the closed end of the dialysis tube will not allow the solution to leak out. Dry off the outside of the dialysis tube bag the paper towels. To open the dialysis tubing, use your thumb and pointer finger to rub the tubing between your fingers. Then, add a small amount of water to the bag and examine the rubber band seal for the leakage. Note: Be sure to remove the water from the inside of the bag before continuing. 9. Using the same pipette that was used to mix the glucose-starch solution in Step 4, transfer 8 mL of the dialysis bag solution beaker to the prepared dialysis bag. 10. Place the filled dialysis bag in the “Dialysis” beaker, leaving the open end draped over the edge of the beaker as shown in Figure 7. 11. Allow the solution to sit for 60 minutes. Clean and dry all materials except the beaker holding the dialysis bag. 12.After the solution has diffused for 60 minutes, remove the dialysis bag from the beaker, and empty the contents of the bag into a clean, dry beaker. Label the beaker “final dialysis bag solution.” 13. Test the final dialysis bag solution for the presence of glucose by dipping one glucose test strip into the dialysis bag. Wait 1 minute before reading the results of the test strip. Record your results for the presence of glucose in Table 3. Figure 7: Step 10 reference. 14.Test for the presence of starch by adding 2 mL IKI. After 1 minute has passed, record the final color in Table 3. 15. Use a pipette to transfer 8 mL of the water in the beaker to a clean beaker. Label this beaker “final dialysis beaker solution.” Test the beaker water for the presence of glucose by dipping one glucose test strip into the beaker. Wait 1 minute before reading the results of the test strip, and record the results in Table 3. 16.Test for the presence of starch by adding 2 mL of IKI to the beaker water. Record the final color of the beaker solution in Table 3.

Diffusion Concentration Gradients and Membrane Permeability

Data Tables

Table: Indicator Reagent Data

Table: Diffusion of Starch and Glucose Over Time

Questions

1. State your hypothesis.
2. Why is it necessary to have positive and negative controls in this experiment?
3. Draw a diagram of the experimental set-up. Use arrows to depict the movement of each substance in the dialysis bag and the beaker.
4. Which substance(s) crossed the dialysis membrane? Support your response with data-based evidence.
5. Which molecules remained inside of the dialysis bag?
6. Did all of the molecules diffuse out of the bag into the beaker? Why or why not?

Reflection (Discuss what you have learned by doing this experiment. How have your ideas changed? Do you have any new questions? What connections did you make between the lab and lecture?):

Question 2
A department at Venta Technology has prepared the following report for 2020. This department has recently faced severe competitive pressures, which has resulted in falling sales and profits over the last 3 years.

Summarised data from the management accounts
Budgeted profit and loss account for 12 months

A new customer has placed an order for 10,000 units at £60 per unit. The current capacity of the factory is 90,000 units.

Note 1. Cost of goods sold includes fixed costs of £500,000. All other costs are variable.

Note 2. If the order is accepted there will be additional fixed costs of £50,000. Staff will receive a bonus of £10,000 if the order is completed on time.

Note 3. Sales commission is 10% of sales and is included in the total cost of £800,000. The sales commission on the new order is only 5%. All other costs are fixed

Required:

1. Advise managers whether or not the order will increase the department’s profits.

2. Calculate the minimum price the company should accept for the order.  

3. Assume that the company will lose 10% of current sales if the order is accepted. What is the lost contribution if the company loses 10% of current sales?           

4. Identify and evaluate what additional information management need about existing and potential customers before finally accepting or rejecting the order.   (14⅓ marks)

CASE STUDY IKEA
The first few years of the twenty-first century were difficult for IKEA, the U$31 billion global furniture powerhouse based in Sweden. The Euro’s strength dampened financial results, as did an economic downturn in Central Europe. The company faced increasing competition from hypermarkets, “do-it-yourself” retailers such as Walmart, and supermarkets that were expanding into home furnishings. Looking to the future, CEO Anders Dahlvig is stressing three areas for improvement: product assortment, customer service, and product availability. With stores in 38 countries, the company’s success reflects founder Ingvar Kamprad’s “social ambition” of selling a wide range of stylish, functional home furnishings at prices so low that the majority of people can afford to buy them. The store exteriors are painted bright blue and yellow: Sweden’s national colours. Shoppers view furniture on the main floor in scores of realistic settings arranged throughout the cavernous showrooms. At IKEA, shopping is a self-service activity; after browsing and writing down the names of desired items, shoppers can pick up their furniture on the lower level. There they find “flat packs” containing the furniture in kit form; one of the cornerstones of IKEA’s strategy is having customers take their purchases home in their own vehicles and assemble the furniture themselves. The lower level of a typical IKEA store also contains a restaurant, a grocery store called the Swede Shop, a supervised play area for children, and a baby care room. IKEA’s unconventional approach to the furniture business has enabled it to rack up impressive growth in an industry in which overall sales have been flat. Sourcing furniture from a network of more than 1,600 suppliers in 55 countries helps the company maintain its low-cost, high-quality position. During the 1990s, IKEA expanded into Central and Eastern Europe. Because consumers in those regions have relatively low purchasing power, the stores offer a smaller selection of goods; some furniture is designed specifically for the cramped living styles typical in former Soviet bloc countries. Throughout Europe, IKEA benefits from the perception that Sweden is the source of high-quality products and efficient service. Currently, Germany and the United Kingdom are IKEA’s top two markets. The United Kingdom represents the fastest-growing market in Europe. Although Britons initially viewed the company’s less-is-more approach as cold and “too Scandinavian,” they were eventually won over. IKEA currently has 18 stores in the United Kingdom and plans call for opening more in the next decade. As Allan Young, creative director of London’s St. Luke’s advertising agency, noted, “IKEA is anti-conventional. It does what it shouldn’t do. That’s the overall theme for all IKEA advertisements: liberation from tradition.” In 2005, IKEA opened two stores near Tokyo; more stores are on the way as the company expands in Asia. IKEA’s first attempt to develop the Japanese market in the mid-1970s resulted in failure. Why? As Tommy Kullberg, former chief executive of IKEA Japan, explained, “In 1974, the Japanese market from a retail point of view was closed. Also, from the Japanese point of view, I do not think they were ready for IKEA, with our way of doing things, with flat packages and asking the consumers to put things together and so on.” However, demographic and economic trends are much different today. After years of recession, consumers are seeking alternatives to paying high prices for quality goods. Also, IKEA’s core customer segment—post–baby boomers in their 30s—grew nearly 10 percent between 2000 and 2010. In Japan, IKEA offers home delivery and an assembly service option. Industry observers predict that North America will eventually rise to the number one position in terms of IKEA’s worldwide sales. The company opened its first U.S. store in Philadelphia in 1985; as of 2010, IKEA operated stores in 48 stores in North America. Plans call for opening at least several more U.S. stores each year through 2015. Goran Carstedt, former president of IKEA North America, described his target market by noting, “Our customers understand our philosophy, which calls for each of us to do a little in order to save a lot. They value our low prices. And almost all of them say they will come back again.” As one industry observer noted, “IKEA is on the way to becoming the Walmart Stores of the home-furnishing industry. If you’re in this business, you’d better take a look.” (Keegan & Green, 2014)

QUESTION >>

1. The process of global market segmentation begins with the choice of one or more variables to use as a basis for grouping customers. Companies such as IKEA should attempt to identify consumers in different countries who share similar needs and desires. By performing market segmentation, marketers can generate the insights needed to devise the most effective approach. Assess the variables that global marketers can use to segment global markets and give an example of each.

Q2
Impact Of Pandemic On Economy And Recovery Policy
Bernama Radio Bernama TV 08/04/2020 05:54 PM
By Dr Norlin Khalid
Apr 8, 2020 - KUALA LUMPUR (Bernama) – The coronavirus or COVID-19
outbreak, which is said to have originated at a wet market in Wuhan, China, has spread
all over the world like lightning and was categorised as a pandemic by the World
Health Organisation (WHO) on March 11. To date, the virus has infected over a
million people in more than 180 countries and caused over 80,000 deaths. In Malaysia
itself, more than 3,000 people have tested positive for COVID-19 and 63 people have
succumbed to it.
According to a study by JP Morgan and projections by WHO, Malaysia’s COVID-19
positive cases may peak in mid-April with over 6,000 people infected. The Malaysian
government has already taken proactive measures to curb its spread by imposing the
Movement Control Order (MCO) from March 18 to 31. However, the MCO period
was later extended to April 14. Although the MCO compliance stands at 95 percent,
case numbers and deaths are continuing to rise.
The COVID-19 pandemic will certainly have an impact on the global economy,
including Malaysia’s. COVID-19 has shocked the world economic structure which
is now in a state of uncertainty. Recently, the International Monetary Fund announced
that the pandemic will cause a global recession this year which could be worse than
the one triggered by the subprime mortgage crisis of 2008. The latter was caused by
the contraction of liquidity in the banking system in the United States after its real
estate bubble burst. The economic crisis ensuing from COVID-19 involves
practically all the countries of the world and recovery is expected to take a long time.
As long as new positive cases of infection are reported, the economic ecosystem will
continue to be disrupted. Studies by the Organisation for Economic Cooperation and
Development and World Bank have projected a 2.4 percent contraction in GDP
(Gross Domestic Product) growth for the world. Bloomberg reported zero percent or
negative GDP growth in the worst-case scenario.
COVID-19 will also have a negative impact on the labour market. The International
Labour Organisation has predicted that 25 million workers throughout the world may
lose their jobs. Malaysia, which is a small country dependent on other nations such as
the US and China, is also expected to feel the pinch. According to a report by the
Malaysian Institute of Economic Research, Malaysia’s GDP growth will contract by
2.61 percent in 2020. Bank Negara Malaysia (BNM) said in a recent statement that
Malaysia’s economic growth will be in the -2.0 percent to +0.5 percent range. It also
estimated that 951,000 people will lose their jobs. The Malaysian Global Innovation
and Creativity Centre predicted that about 40 percent of small- and medium-sized
enterprises will have to wind up their operations if the COVID-19 chain of infection
persists for three to six months.
CONFIDENTIAL BPA12403/BPA10103
CONFIDENTIAL
4
In the face of COVID-19, the government must focus on two objectives: one, focus
on the necessary protective and safety precautions to break the chain of infection and
two, reduce the negative economic effects by implementing recovery policies
involving active fiscal and monetary policy targets. The fiscal policy targets are
related to government spending and taxation while the monetary policies are related
to interest rates, liquidity and control of money supply.
In terms of fiscal policy, the government has announced a series of economic stimulus
packages to help individuals and companies affected by the COVID-19 crisis.
On March 19, the RM20 billion economic stimulus package (PRE 2020) was
launched to help industries that were directly hit by the first wave of the COVID-19
outbreak, such as hotels and transport companies. After the outbreak entered the
second wave and the MCO was imposed, more individuals and businesses were
impacted. The supply chain is disrupted because almost the entire sector has stopped
working. Some production firms have also stopped operations and worse still, laidoff
workers as they are unable to bear the costs. The PRIHATIN package is aimed at
easing the financial constraints of the people and businesses. On March 27, the
government announced the second RM250 billion economic stimulus package
PRIHATIN, which includes the RM20 billion from PRE 2020. Out of RM230 billion,
RM22 billion would come from a direct fiscal injection; RM100 billion (moratorium
in loan repayments); RM55 billion (guarantees); RM40 billion (withdrawal from
Employees Provident Fund); and RM13 billion (various sources). PRIHATIN’s main
objective is to protect the welfare of the people, support businesses and strengthen the
economy. However, the stimulus packages will cause the nation’s fiscal position to
worsen. To add to that, the global economic crisis has caused oil prices to tumble
down to US$25-US$30 a barrel. In comparison, oil prices were around US$60 a barrel
when Budget 2019 was tabled. When government revenue from oil drops, it will cause
an increase in deficits.
In terms of monetary policy, BNM has cut the Overnight Policy Rate or OPR by 25
basis points to 2.5 percent and reduced the statutory reserve requirement ratio or SRR
by 100 basis points to two percent. These cuts will reduce loan costs, improve
liquidity and stimulate economic activities. Apart from that, the restructuring and
rescheduling of the six-month moratorium will ensure that the capital and financial
market returns to stability. It will also help individuals and businesses facing financial
problems and liquidity constraints.
It is difficult to predict when the economy will fully recover as long as COVID-19
positive cases continue to rise and no vaccines are discovered to treat the disease.
Nevertheless, the government’s fiscal and monetary policies complement one another
and will help to revive the economy by increasing aggregate demand such as public
and private consumption and investment. This will help to stimulate economic growth
through the multiplier effect and reduce the hike in the unemployment rate.
https://www.bernama.com/en/features/news.php?id=1829686
CONFIDENTIAL BPA12403/BPA10103
CONFIDENTIAL
5
(a) Examine the impact of COVID 19 pandemic on the Malaysian economy from
the aspects of unemployment and the wages of labor.

(b) To reduce the negative economic effects of COVID-19 pandemic, the
government is implementing recovery policies involving active fiscal and
monetary policy targets. The fiscal policy targets are related to government
spending and taxation while the monetary policies are related to interest rates,
liquidity and control of money supply. Analyze the implementation of expansionary fiscal policy and monetary policy
to stimulate aggregate demand (AD) in the economy during economic recession.

Case Study 3:

QWERTY It is now June 2013. Qwerty Limited is an Irish based company that designs, manufactures and sells a wide range of wireless computer keyboards to retailers in both Ireland and Northern Ireland. QWERTY is co- owned by twin brothers Paul and Joe Hayes, who founded the company after graduating from their local university with undergraduate degrees in Computer Science and Electronic Engineering respectively. Since then, QWERTY has experienced rapid sales growth (with modest but growing profitability) and now employs 55 full-time employees from their Limerick base. Paul and Joe are the only directors of the company. Performance Measurement As a result of the on-going difficulties experienced by QWERTY in acquiring adequate levels of credit from their local financial institutions to fund their working capital, Paul and Joe have decided with immediate effect, that if any of their products are budgeted to be loss-making for the forthcoming year, they should be discontinued immediately in an attempt to protect the future viability of the company. Consequently, the 2014 budgetary data for one of QWERTY's most popular (and to-date profitable) keyboards called “Exile”, is causing Paul and Joe a lot of concern (see Appendix I for the 2014 budgetary data on “Exile”). In an on-going attempt to reduce their costs, all of QWERTY's 2014 budgetary forecasts were jointly prepared by the company's co-owners, having previously been contracted out to a small local firm of Chartered Accountants. In addition to focusing on product profitability as a key performance indicator, Paul and Joe are also keen to consider the use of some non-financial metrics to guide them in making future strategic decisions. Having discussed the various options available, allied to the nature of the industry in which they compete, they have collectively decided on “innovation” as the key non-financial success factor for QWERTY to focus on in the short to medium term, although they have yet to agree on any specific performance measures.
Growth Opportunities Paul has always been more growth focused than Joe and for the past year has been exploring various options to expand the company. He has identified a venture capital investor, with an interest in small technology companies. The investor has made an offer to invest €/£ 2 million in QWERTY for 36% of the equity. Paul and Joe agree that this is an attractive offer. An agreement has been signed and this investment will go ahead within the next three months. The venture capital investor is impressed by Paul and Joe's management of QWERTY but has some concerns that it does not have the corporate governance structures to sustain its growth over the medium to long term. As a condition of the investment the venture capital investor is insisting that he has a position on the board of directors and a veto over major strategic decisions made by the company. Paul and Joe are agreeable to these conditions.
Paul is proposing that they use the funds raised from the new investor to part-finance the acquisition of Screen Magic Limited (“SCREEN”), an Irish company which manufactures computer screens. Paul has had preliminary discussions with the owner (and managing director) of SCREEN, who has told him he is keen to retire soon after finding the last few years increasingly stressful trying to resolve a complex tax issue affecting SCREEN and dealing with increasingly onerous regulations on environmental standards in manufacturing. He may be interested in selling SCREEN and has provided information on the company (see Appendix II). Paul has been pushing a “growth by acquisition” strategy for several years because he believes QWERTY is too narrowly focused on one sector and believes acquisitions almost always deliver significant value through synergies and economies of scale. He is confident that if QWERTY acquires another company he and Joe have the management skills required to ensure a successful integration. Paul is eager to agree the terms of the takeover of SCREEN before the venture capital investor takes his seat on the board as he is not sure if the investor would approve of the takeover. Bridging finance would be available from QWERTY's bank to finance the acquisition pending receipt of the new equity funds. This facility would be personally guaranteed by Paul and Joe.

CASE STUDY 3 QUESTIONS

QUESTION 3: Suggest and justify any three (3) specific performance measures in relation to “innovation” that you think QWERTY should adopt to enhance their future performance.

QUESTION 4: Identify one (1) potential ethical issue facing Paul and Joe and discuss how it should be resolved.

ABC Corp. provides its employees with a defined benefit pension plan. The company's actuary has provided you with the following information as of December 31, 2020: PBO $ 1,200,000 Fair Value Plan Assets 1,650,000 Current Service Cost 480,000 Interest Cost 48,000 PSC amortization 120,000 Expected and actual return on assets 165,000 In the past, contributions made to the pension plan have been equal to the pension expense for the corresponding year. The company has not made any contribution in 2020. In the statement of financial position as of December 31, 2020, ABC must report

a. a net pension asset of $ 1,650,000

b. a net pension debt of $ 78,000

c. a net pension debt of $ 450,000

d. a net pension asset of $ 450,000

1 Prepare the journal entries to set up the partnership as at 1 May 2020.

2 prepare a classified Balance Sheet of the partnership as at 1 May 2020.

Michelle and Peter form a partnership on 1 May 2020.

Michelle agrees to bring in $250,000 of cash.

Peter, who has been trading as a sole trader, is to invest certain business assets at agreed market valuations and also transfer his business liabilities.

Details of Peter’s assets and liabilities and their agreed valuations, are as follows:

On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:

• 5-year lease term
• Annual lease payments are $10,000
• First payment is on January 1, 2020 and the other payments are on 31 December each year
• At the end of the lease the leased asset will revert to the lessor
• The asset’s economic life is estimated at 10 years
• Winthrop could have obtained equivalent financing from its bank at a rate of 5%
• Winthrop’s fiscal year end is December 31
• The equipment has a fair value of $70,000

Required:

1. Calculate the present value of the lease payments.
2. Prepare the amortization table.
3. Classify the lease agreement.
4. Prepare the journal entry(ies) for the lessee for the 2020 fiscal year related to the lease arrangement.