Question : 21) A decrease in individual income taxes ________ disposable income, : 1244902

Economics

21) A decrease in individual income taxes ________ disposable income, which ________ consumption spending.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

22) Tax increases on business income decrease aggregate demand by decreasing

A) business investment spending.

B) consumption spending.

C) government spending.

D) wage rates.

23) If the economy is growing beyond potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in

A) the money supply and a decrease in interest rates.

B) government purchases.

C) oil prices.

D) taxes.

24) Which of the following is considered expansionary fiscal policy?

A) Congress decreases the income tax rate.

B) Congress increases defense spending.

C) Legislation increases a college tuition deduction from federal income taxes.

D) The Arizona legislature cuts highway spending to balance its budget.

25) Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________.

A) higher; higher

B) higher; lower

C) lower; higher

D) lower; lower

Figure 18-2

26) Refer to Figure 18-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by the Congress and the president would be to

A) lower the discount rate of interest.

B) execute an open market sale of government securities.

C) increase government transfer payments.

D) increase marginal income tax rates.

27) Refer to Figure 18-2. In the graph above, if the economy is at point A, an appropriate fiscal policy by the Congress and the president would be to

A) decrease the required reserve ratio.

B) sell government securities.

C) increase government expenditures.

D) decrease transfer payments.

Figure 18-3

28) Refer to Figure 18-3. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Congress and the president?

A) a decrease in income taxes

B) a decrease in interest rates

C) a decrease in government purchases

D) an increase in the money supply

29) Decreasing government spending ________ the price level and ________ equilibrium real GDP.

A) decreases; increases

B) increases; decreases

C) increases; increases

D) decreases; decreases

Figure 18-4

30) Refer to Figure 18-4. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Congress and the president?

A) an increase in transfer payments

B) an increase in interest rates

C) an increase in the marginal income tax rate

D) an open market purchase of Treasury bills

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July 1, 2023

21. The percentage-of-sales procedure arises from the idea that uncollectible amounts will vary with the volume of credit business. The firm estimates the appropriate percentage by studying its own experience or by inquiring into the experience of similar firms. Default rates generally fall within the range of .01% to .02% of credit sales.

22. The percentage-of-completion method measures the proportion of total work carried out during the accounting period either from engineers' estimates of the degree of completion or from the ratio of costs incurred to date to the total costs expected for the entire contract.

23. A common-size income statement expresses each expense and net income as a percentage of
A. assets.
B. revenues.
C. liabilities.
D. expenses.
E. shareholders’ equity.

24. If the firm has received a promise of payment but cannot measure this promise with reasonable reliability,
A. U.S. GAAP would permit revenue to be recognized, but IFRS would not permit revenue to be recognized.
B. U.S. GAAP would not permit revenue to be recognized, but IFRS would permit revenue to be recognized.
C. neither U.S. GAAP nor IFRS would permit revenue to be recognized.
D. U.S. GAAP and IFRS would permit revenue to be recognized.
E. none of the above

25. Which section includes income derived from a firm’s primary business activities as well as from activities peripherally related to operations? (The firm expects these sources of earnings to continue.)
A. income from continuing operations
B. income, gains, and losses from discontinued operations
C. extraordinary gains and losses
D. retained earnings
E. paid-in-capital

26. Operating risks
A. include variability in sales from changing economic conditions (cyclicality risk).
B. include variability in sales from short product life cycles (because of technological change or changes in consumer taste).
C. include variability of earnings that arises when the firm has a high proportion of fixed costs that do not change as sales change.
D. Answers a, b, and c are correct.
E. None of these answer choices is correct.

27. Ulrich Co. sells an asset to a buyer for a total sales price of $6,000 with a payment schedule of $2,000 in year 1, $2,000 in year 2, and $2,000 in year 3. The cost of the asset is $5,000. Under the cost-recovery-first method, what amount of net profit is recognized in year 3?
A. $2,000
B. $1,000
C. $666.67
D. $333.33
E. $0

28. Which of the following is true regarding income recognition?
A. The seller must have substantially performed its obligations to the customer (for example, by transferring ownership of goods to the customer).
B. The seller must have obtained an asset from the customer that it can reliably measure. If the asset is not cash, the seller must be reasonably certain of converting it into cash.
C. The firm recognizes expenses when it consumes assets.
D. If an event or transaction leads to the recognition of revenue, the firm matches the consumption of any assets (the expense), in time, with the revenue recognized.
E. all of the above

29. Cowden Properties

Cowden Properties sold a condominium to Ms. Roberts for $90,000. Cowden originally acquired the condo at a cost of $40,000 and made improvements to the unit totaling $20,000. The contract for sale required Ms. Roberts to pay the $90,000 as follows: