Suppose the output or goods market is in equilibrium and the level of taxes in that country is increased. How does this affect the output market? Explain your answer through the sequence of change(s) on any variable(s) involved.

1. Intermediate goods and services are ____ production and _____ counted in GDP. A) at the end products of; are B) used up in the process of; are not C) the end products of; are not D) used up in the process of; are

2. Which of the following is not classified as a final good? A) A new car purchased by a family B) Fresh vegetables purchased by a restaurant C) New clothing purchased by a college student D) A new machine purchased by a business   
3. If an automobile manufacturer pays $200 for a car windshield, $400 for four car tires, $100 for a car CD player, and sells cars made with these parts for $20,000, then each car the automobile manufacturer sells contributes how much to GDP?

A) $20,000                    B) $20,700                    C) $20,200                    D) $19,300   

4. If Bountiful Orchard grows $100,000 worth of peaches, sells $50,000 worth of peaches to consumers and uses to rest to make jam that is sold to consumers for $100,000, Bountiful Orchard's contribution to GDP is:

A) $100,000.                 B) $200,000.                 C) $50,000.                   D) $150,000.

These are the equations for the goods, and money market in a hypothetical economy:

C = 250 + .8(Y-T)

I = 100 - 50r

T = G = 100.

Ms = 200

Md = 0.2Y – 100r

ANSWER FROM PART C AND LATER

---a) What is the equation of the IS curve? Is this upward or downward sloping?

----b) If T falls to 50 and everything else is unchanged, what is the equation of the new IS curve?

c) Draw the S+T, I+G and the IS curves for both parts (a) and (b). Keynesian Economics.

d) By how much has the IS curve shifted in part (c)? Does it match up with what is suggested by the multiplier?

e) Derive the LM curve from the Md and Ms equations given above. Is this upward or downward sloping?

f) Using the equation of the IS curve in part (a) and the LM curve in part (e) find the equilibrium levels of Y, r, M, C, S, I, G and T.

g) Using the LM curve in part (e) and the IS curve in part (b), find the equilibrium levels of Y, r, M, C, S, I, G and T.

h) Explain the adjustment process from the old to the new equilibrium when (1) at the same r, you have a different Y, and (2) at the same Y, you have a different r. You might find it helpful to draw IS and LM curves for both equilibria first. Use numbers as much as possible.

i) Suppose the equation of the new LM curve is Y = 1500 + 500r. State one factor that can change the LM curve this way and be as specific as possible. Compare the new and the old LM curves.

j) Using the new LM curve and the IS curve in (b), in other words, both IS and LM have changed. Solve for the equilibrium levels of Y, r, M, C, S, I, G and T.

k) From your answers in part (j), which curve has shifted more? How can you tell? Compare this to the original equilibrium in part (f).

the computation of cost of goods manufactured on the income statement IS . (ASSUME THERE ARE NO WORK-IN- PROCESS INVENTORY)

Suppose that there are two goods, X and Y. The utility function is ?(?, ?) = 5?² ?. The price of Y is $2 per unit, and the price of X is P. Income is $2,400.

A.) Derive the demand curve and state the law of demand in relation to your product or service.

B.) ? = 800 − 10?^0.5 . Calculate elasticity of demand when Q=100, Is the good elastic?

C.) ? = 800 − 10?^0.5 − 0.5?. Calculate elasticity of income when Q=4 and I=100. Is the good normal or inferior?

D.) ?_A = 80 − 10?^0.5 − ?B Calculate cross price elasticity when Q= 16 and ?B =10. Are the goods complementary or are they substitutes?

Explain the relationship between current Account and the goods market.

1. An error in the physical count of goods on hand at the end of the current period resulted in a $2,500 overstatement of the ending inventory. The effect of this error in the current period is to:

a) overstate cost of goods sold

b) understate cost of goods available for sale.

c) understate gross profit.

d) overstate net income.

e) understate ending retained earnings.

2. Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company:

a) the Dividend Revenue account is credited.

b) the Investments account is increased.

c) no entry is necessary.

d) the Dividend Revenue account is debited.

e) the Investments account is decreased.

3. A purchase of common stock of Ajax Corporation for $14,000 was sold three months later for $15,000. The entry to record the sale would include a:

a) debit to Cash of $14,000.

b) credit to Gain on Sale of Investments of $1,000.

c) credit to Investments of $15,000.

d) credit to Interest Revenue of $1,000.

e) debit to Gain on Sale of Investments of $1,000.

What are some of the challenges with measuring benefits of environmental goods?

As part of the calculation for cost of goods sold it is necessary to determine the value of goods on hand, termed merchandise inventory. Accountants use two basic methods for determining the amount of merchandise inventory. Identify the two methods and describe the circumstances (including examples of users of each method) under which each method would be used. Describe the computation necessary to arrive at the cost of goods sold figure on a merchandising company's income statement.