“The Reserve Bank of Australia declared it would stop buying government debt”. Discuss, in terms of fiscal policy, how government debt can be a problem and how interest rates affect government debt.

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Answer 1

When it comes to fiscal policy, it can be a problem if government debt is no longer purchased as the government will turn to taxes for funding or reduce spending.

Government debt is affected by interest rates in that when rates are higher, the government borrows less.

What is the effect of government debt on fiscal policy?

If the government decides to stop buying government debt as is the case with Australia, it means that the government will either reduce its spending, or increase taxes.

Both of these things will lead to a lower economic growth and so are not desired. The government however, might be forced to reduce borrowing due to high interest rates that make borrowing more expensive.

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Related Questions

If price is initially less than minimum average total cost, resulting losses will cause firms to leave the industry eventually resulting in _____.

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Answer:

industry contraction that decreases supply until price rises again to equal minimum average total cost (ATC)

Explanation:

An industry contracts when firms incur losses and leave the industry. The loss of firms or suppliers causes supply to decrease resulting in increases in price until once again the price is equal to the minimum ATC.

What are two methods of analyzing capital investment proposals that both ignore present value?

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The two methods of analyzing capital investment proposals that both ignore present value are cash payback period and the average rate of return.

What is the cash payback period method?

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow

What is the average rate of return method?

Average rate of return is a capital budgeting method. It is used to determine if a firm should invest in a project or should not invest in a project

Average rate of return = average net income / average cost of investment

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Many small businesses rely on factoring as a source of short-term financing because Multiple Choice interest paid to a factor qualifies for a tax credit. small firms often find it difficult to qualify for bank loans. factoring provides a much cheaper source of funds than bank loans. loans provided by factors do not require collateral.

Answers

Factoring is a popular short-term finance option for many small enterprises because Small businesses frequently struggle to obtain bank loans. So, "small firms often find it difficult to qualify for bank loans" is the correct answer.

Why do small businesses rely on short-term financing?

Short-term loans are more common for small firms than long-term debt funding.

Short-term loans are frequently preferred by businesses over factoring or merchant cash advances, which have higher interest rates and terms.

An unsecured business line of credit may be more difficult to obtain than this sort of loan.

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Rylen develops a new type of software and asks you how to go about making money through distribution of it. Rylen has been told to sell the software as opposed to issuing licenses for its use. What should you tell Rylen?

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Answer:

Rylen has been told to sell the software as opposed to issuing licenses for its use. What should you tell Rylen? By licensing, rather than by selling, a software vendor can avoid the doctrine of first sale, which allows a lawful owner to sell or otherwise dispose of the copy.

Which best describes the idea behind the "invisible hand"? producers decide what to make for consumers, which guides the economy. individuals seeking their own self interest benefit the economy as a whole. government sets policy for producers and consumers, which guides the economy. consumers decide what they need and want to buy, which guides the economy.

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The invisible hand is the phrase initiated by Adam Smith as the economic theory. The idea behind the invisible hand has been the development of the policy by the government guiding the economy.

Who was Adam Smith?

Adam Smith was the Scottish economist of the eighteenth century. In his book,  "The Wealth of Nations" he introduced the phrase the invisible hand.

The idea has been the development of the policies by the government as the invisible hand for the producers and the consumers that made the guide to the economy.

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Answer:

Individuals seeking their own self interest benefit the economy as a whole.

Explanation:

Producers and consumers Just took the unit test on edge!

The NCAA operates as a(n): Group of answer choices Natural monopoly. Incidental cartel. Perfect-competitor in collegiate athletics. For-profit cartel.

Answers

The NCAA operates as an Incidental cartel concerning the TV Broadcasts of college football games.

What do you mean by NCAA?

The NCAA is an organization that is created from an agreement between a group of producers of a good, products, or services to regulate or manipulate the prices.

A cartel refers to the collection of the country or a business acting together as a single producer that influences the prices for certain goods or services.

NCAA can be viewed as a cartel. So, B is the correct option.

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The name for the theory illustrated in this diagram is the conservative revolution. supply-side economics. slash-and-burn economics.

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The theory presented by the diagram in the question is known as trickle-down economics theory.

What exactly is trickle-down economics?

This is referred to as supply-side economics. It teaches that tax breaks and corporate benefits eventually reach everyone in the economy.

Reaganomics detractors have consistently expressed their dissatisfaction with this type of economics.

Therefore, the above explanation explains the statement

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Answer:

First question: B. supply-side economics

Second question: C. "trickle-down economics"

Explanation:

Suppose an economy's marginal propensity to consume (MPC) is 0.6. Then 1 + MPC + MPC2 + MPC3 = 2.176 and, if we continued adding up terms in this geometric series, we would get closer and closer to the multiplier value of

Answers

If we continued adding up terms in this geometric series, we would get closer and closer to the multiplier value of 2.5.

What do you mean by marginal propensity?

The marginal propensity to consume plus the marginal propensity to save equals 1.

Solution:

Multiplier=1/(1-MPC)

Multiplier=1/(1-0.6)

Multiplier=2.5

MPC of n the number of cycle:

=1 + MPC + MPC2 + MPC3

=1+0.6+0.6^2+0.6^3=2.176

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What economic system focused on exports and acquiring precious metals?.

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Mercantilism is an economic system focused on exports and acquiring precious metals.

What is Mercantilism?

Mercantilism is an practice of economics that all was by which governments make use of their economy to enhance power.

They reduce the level of importation and increase the level of exportation.

Therefore, Mercantilism is an economic system focused on exports and acquiring precious metals.

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If your marginal propensity to consume is 0. 4 and you get an additional $300 in income, you would spend ________ on consumption.

Answers

Answer:

$120

Explanation:

.4 x 300 = $120

the MPC (Marginal propensity to consume) is essentially the same as saying this is how much of your additional income to spend. In this case, you spend .4 of your additional income. Multiplying .4 by $300 in additional income results in $120

Joan is a manager with Steel Works, Inc. Joan would love to beat the budget this year. She believes that revenues for the coming year will be $200,000 and expenses will be $120,000. To build in budgetary slack, Joan is least likely to budget for

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The amount of $130,000 in Expenses will be the least likely to be budgeted for while building a budgetary slack.

What is a budgetary slack?

This is a special consideration in a budget that seeks to increase the chances of the actual performance being better than the budget.

Joan will likely budget for $110,000 of expenses, $210,000 of revenue and $80,000 of income.

Therefore, the amount of $130,000 in Expenses will be the least likely to be budgeted for

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If the economy starts below full employment, an expansionary fiscal policy will shift the aggregate demand curve from _____ to _____, and equilibrium will move from point _____ to

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The expansionary fiscal policy will shift the aggregate demand curve from AD0 to AD1 and equilibrium will move from point a to b if the economy starts below full employment.

What is the below full employment?

Its means when an the short-run real gross domestic product is lower than that same long-run potential real gross domestic product.

Hence, the economic situation will elicit a policy of expansionary fiscal which will affect the aggregate demand graph.

Therefore, the aggregate demand curve from AD0 to AD1 and equilibrium will move from point a to b if the economy starts below full employment.

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Acme Inc. is surveying customers as to what kinds of services they would like the company to add. It is involved in the marketing function of

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Acme Inc. is surveying customers as to what kinds of services they would like the company to add. It is involved in the marketing function of Research.

What is Marketing Research?

Marketing research is the process by which organisation and buisnesses obtain systematic information through the process of

gatheringanalysisrecording of data  

relating to marketing products  and its customers acceptance of such products.

The major aim of Marketing Research is to produce only products which will provide consumer satisfaction.

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The financial manager for Appleton Brewing Company is working with the firm's marketing department to bring out a new line of hard cider. The new product development and subsequent production will require a long-term investment of funds by the company. Which source of financing would be representative of such a long-term funding requirement

Answers

Answer:

Brainliest pls

Explanation:

issuance of bonds

The source financing that would be representative of such a long-term funding requirement is issuance of bonds.

What is issuance of bonds?

Issuance of bonds is one way for companies to raise money. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a certain amount of money for a specific period of time. In exchange, the investor receives periodic interest payments. When the bond reaches its maturity date, the company repays the investor.

The decision to issue bonds instead of selecting other methods of raising money can be driven by many factors. Comparing the features and benefits of bonds versus other common methods of raising cash provides some insight. It helps to explain why companies often issue bonds when they need to finance corporate activities.

Bonds have several advantages over bank loans and can be structured in many ways with different maturities.

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Your grandmother is giving you $1,000 as a graduation present but has indicated that you must open an account with a financial institution so you have financial foundations in place when you start college. In town, there are a commercial bank, credit union, and a savings and loan. Using the PACED model, compare these three institutions to determine which one you would select and explain why.

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Using the PACED model, after comparing  these three institutions. The best choice to open an account with is commercial bank.

What is  commercial bank, credit union, and a savings and loan?

Commercial bank can be defined as a  financial institution that offers several financial services such as:

Depoist Saving accountLoans

A credit union ia also a financial institution that is non profit and they as well accept deposit and gives out loan to their members.

Savings and loan is a institution accept deposit  and give out real estate loan.

The best choice when using PACED model for decison making is for her to open a savings account with a commercial bank reason being she will be able to save while she earn interest on the amount saved.

Inconclusion  Using the PACED model, after comparing  these three institutions. The best choice to open an account with is commercial bank.

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How does the interest rate and consumer expectations affect the
business cyde?

Answers

Answer:

the lower interest rates encourage companies to the expansion.This is due to the fact that the companies are able to borrow money at a lower interest rates.This provides an opportunity to borrow money necessary to expand the business.The inflation and interest rate expectations of consumers and firms are important variables determining bond prices.They are also key in determining the level of consumption, private investment, and debt levels in the economy.

Explanation:

hope this helps if not let me know :)

Which of the following is considered a purchase tax? a. income tax b. social security c. property tax d. excise tax please select the best answer from the choices provided a b c d

Answers

The purchase tax is paid by the consumer over a commodity. The excise tax has been considered as the purchase tax.

What are taxes?

The taxes are the contribution to the state made to develop the contribution to the revenue. The Purchase tax has been the tax paid by the individual over the product buy.

The following tax is paid as:

Income tax: Over income Social security: Over the protection Property tax: Over the land ownedExcise tax: Over the purchase

Thus, the excise tax has been the type of purchase tax. Thus, option D is correct.

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Answer:

D: Excise tax

Explanation:

EDGE: 2022

How to get bonded and insured for a small business?.

Answers

1.Select your number of employees and bond amount

2.Enter your contact information

3.Enter your company information

4.Select when you would like your bond to start and the type of work you will be doing

5.Pay online and a receipt will be sent to your inbox immediately

A good website to visit is suretybonds.com

In most countries, companies have an incentive to use ______ because ______ payments are tax deductible. Multiple choice question.

Answers

Tax laws in most countries are such that companies are encouraged to use loan facilities / bonds because interest payments are deductible.

What do companies have an incentive to use?

In most nations, the interest payments that a company makes on loans and bonds are removed from taxes.

This reduces the tax liability of a company which encourages them to use more loan facilities and bonds knowing that they would pay less in taxes.

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In a hypothetical situation, the united states and mexico have labor forces of the same size. The production possibilities curves in the figure show that the united states has an absolute advantage over mexico in vegetables and beef. This means that if both countries use the same amount of resources on those products, ______.

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If the United states has an absolute advantage in the production of vegetables and beef over Mexico, the United States produces more of both products.

What is absolute advantage?

The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.

A country has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries

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The main categories of cash flow activities on the statement of cash flows are:.

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The cashflow statement is broken down into three categories: Operating activities, investment activities, and financing activities.

What is cashflow statement?

A cash flow statement is also called as the statement of cash flows. It is a financial statement that exhibits how modifications in the accounts of the balance sheet and income impact cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities.

Therefore, the cashflow statement is split up into three parts, i.e.,  operating activities, investment activities, and financing activities.

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The governance mechanism MOST closely connected with deterring unethical behaviors by holding top management accountable for the corporate culture is:

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When top management need to be held accountable for unethical behavior, the best way is to use a Board of Directors.

What does a Board of Directors do?

These are the representatives of the shareholders in the leadership of the company.

They are the highest authority in the company and the policies they implement are meant to hold top management accountable for unethical behavior that might threaten the shareholders.

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Which of the following is true when workers specialize in the production of one good

A) there is increased competition among the producers of similar goods

B) The quantity of output produced by the worker increases

C) The satisfaction of the worker increases

D) The cost of producing the good increases

Answers

The statement that is true when workers specialize in the production of one good is: A) there is increased competition among the producers of similar goods.

What is specialization?

Specialization  means to be an expertise when it comes to production of goods and service.

When employee are specialize in the production of goods it tend to lead to more competition between manufacturer that produce similar products.

Therefore the correct option is A.

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Which type of specialized fire company generally has the primary duty of searching for victims and removing them from areas of danger or entrapment

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The type of specialized fire company that has the primary duty of searching for victims and removing them from areas of danger or entrapment is the Rescue company.

What is a Fire Agency?

This refers to a government or private agency that has the job of assisting in fire situations and also removing trapped people in buildings,

Hence, we can see that in the fire company, there is a specialized company that rescues victims from fire and removes them from areas of danger or entrapment and they are known as the rescue company.

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As long as you do not have any debt, you will have a high credit score.

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Some people say that if you don't have debt, your credit score will be high but this is a FALSE statement.

Will you have a high credit score without debt?

One of the things that goes into calculating a person's credit score is their credit history. If you have a short credit history, you will have a lower score.

For this reason, having no debt will not give you a high credit score because lenders will not be sure of your ability to pay off debt.

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Bryne Co. Sells merchandise and collects a 5% state sales tax. The tax is recorded on Bryne's general ledger as a(n) ______ account

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The state sales tax (5%) on sales of merchandise will be recorded on Bryne's general ledger as a liability.

What is a sales tax?

This is an imposed taxation that is based on the purchased price of products.

In United states, the sales tax varies from state to state because every state determines its rates unlike the general federal tax rate.

In conclusion, the sales tax on sales of merchandise will be recorded on as a liability because it is an outflow on his personal account.

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What is ISO 14001 used for?

Answers

Answer:

ISO 14001 is an internationally agreed standard that sets out the requirements for an environmental management system. It helps organizations improve their environmental performance through more efficient use of resources and reduction of waste, gaining a competitive advantage and the trust of stakeholders.

Explanation:

hehe

The control principle related to not having the same person authorize and pay for goods is known as.

Answers

The control principle related to not having the same person authorize and pay for goods is known as:establishment of responsibility.

What is establishment of responsibility?

Establishment of responsibility can be defined as the way in which a person is assign to only one responsibility or assign to one particular roles.

This person is the only individual that has the right or authority to authorize and approve all transactions or to pay for goods.

Therefore  the control principle related to not having the same person authorize and pay for goods is known as:establishment of responsibility.

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As Miles considers approaching a venture capital firm to provide funding for his new mobile app, he should realize that a venture capital firm will Multiple Choice charge a higher interest rate than a commercial bank. offer no more than 20% of the funding he needs. probably want an ownership interest in the business. expect the company to provide a steady dividend income.

Answers

Answer:

Probably want an ownership interest in the business.

When studying the worth of work performed by its employees, a company identifies what it values about each of the jobs the employees do. These job characteristics are called

Answers

These job characteristics, which a company identifies while studying the worth of work performed by employees or job values, are called compensable factors.

What are compensable factors?

Compensable factors are job attributes that a job evaluation plan provides for the employer to ascertain the worth of a job relative to others.

Some of the compensable factors are:

SkillResponsibilitiesEffortWorking Conditions.

Thus, these job characteristics are called compensable factors.

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