Other Economics Answers

‘The idea that stock should be included in accounts at the lower of historical cost and net realisable value follows the prudence convention but not the consistency convention.’ Required:

(a) Do you agree with the quotation?

(b) Explain, with reasons, whether you think this idea (that stocks should be included in accounts at the lower of historical cost and net realisable value) is a useful one. Refer to at least two classes of user of financial accounting reports in your answer.

Explain the treatment of the scrap value of the normal loss in the process accounts.                                                                                                                                    

Finance decisions that are facing any financial manager or management of business organization

Which of the following is correct about an increase in interest rate in the Keynesian model?

[1] increase price levels

[2] decrease price levels

[3] increase investment

[4] decrease investment

Which one of the following is correct regarding contractionary fiscal policy in the Keynesian

model? It will…

[1] decrease inventories

[2] increase inventories

[3] increase investment

[4] decrease investmen

In the Keynesian model, when the tax rate increases...

[1] the multiplier increases.

[2] the equilibrium level of income increases.

[3] net exports increase.

[4] the equilibrium level of income decreases.

The multiplier for a Keynesian model with a foreign sector is _____ the multiplier of a

Keynesian model without a foreign sector.

a) lower than

b) higher than

c) same as

[1] a is correct

[2] b is correct

[3] c is correct

[4] all of them are correct

 movement from X to X’ can result from …

[1] a depreciation of the rand against the dollar.

[2] an appreciation of the rand against the dollar.

[3] an increase in domestic income.

[4] a decrease in domestic income.

X, Z

Y

𝑋ത X = 𝑋ത

Z= 𝑍ҧ+ 𝑚𝑌

𝑍ҧ

𝑋ത′

Define regressive transfer as a transfer of money (income) from a poor person to a less poor person. Suppose there is a regressive transfer of $0.50 from person 1 to person 4, i.e., we take $0.50 from person 1 and give it to person 4.

1.    After the regressive transfer (as defined above), what is the new value of ? [1 point]

2.    Did your value of  change after the regressive transfer? Why or why not? [3 points]

3.    Can you propose a different poverty measure that will be able to reflect the regressive transfer? Discuss. [3 points]