Answer:
the wheat firm is perfectly competitive
A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
he is a price taker and the price of his wheat which would be equal to equilibrium price would be determined by market forces
if he sells at the market price, he would sell all his wheat
Explanation:
If the uncle sells above equilibrium price, he would not sell any wheat
he cannot sell below equilibrium price because he would make losses
Concentration ratios measure the Group of answer choices geographic location of the largest corporations in each industry. degree to which product price exceeds marginal cost in various industries. percentage of total industry sales accounted for by the largest firms in the industry. number of firms in an industry.
Answer:
percentage of total industry sales accounted for by the largest firms in the industry.
Explanation:
The concentration ratio calculated the market share percentage for an industry and the same is held by the larger firms inside the industry. Also it determined the total output that could be generated from the number of firms in the industry
Therefore as per the given options, the above options should be considered correct
A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios, indicate whether the equilibrium consumption of goods X and Y will increase or decrease. Assume good X is a normal good and good Y is an inferior good.
a. Income doubles.
b. Income quadruples and all prices double.
c. Income and all prices quadruple.
d. Income is halved and all prices double.
Answer:
a. Income doubles
consumption of good X will increase (normal good) will consumption of good Y will decrease (inferior good)b. Income quadruples and all prices double.
consumption of good X will increase (normal good) will consumption of good Y will decrease (inferior good)c. Income and all prices quadruple.
consumption of both goods will remain at the same leveld. Income is halved and all prices double.
consumption of good X will decrease (normal good) will consumption of good Y will increase (inferior good)
The major advantage of a regular partnership or a corporation as a form of business organization is the fact that both offer their owners limited liability, whereas proprietorships do not. True False
Answer:
True
Explanation:
Some owners of a regular partnership (limited liability partnership) or a corporation (S-corporation) enjoy limited liability, unlike the owners of proprietorships, whose business liabilities and solvency are backed with the personal assets of the owners. The owners of a C-corporation enjoy full limited liability unless the corporate veil is lifted by the court, depending on prevailing circumstances. With limited liability also comes limited participation in the management of the entity.
Review the transactions and determine the accounts, the account types (use assets; liabilities; owner, capital; owner, withdrawals; revenue; and expenses), if they increase/decrease and if they are DR/CR. List accounts in order they would be in the journal entry.Received cash on account from a customer.Account #1 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccount #2 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccrued liability for utilities.Account #1 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccount #2 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditPurchased office supplies on accountAccount #1 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccount #2 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditPaid cash for rent.Account #1 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccount #2 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditPurchased office furniture on accountAccount #1 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditAccount #2 Account Type Increase/DecreaseIncreaseDecreaseDebit/CreditDebitCreditRecord the following transactions as journal entries.Collected $7,000 cash for servicesCollected $7,000 cash for servicesDateAccounts and ExplanationDebitCreditNov. 3Paid $7,000 cash on account.Paid $7,000 cash on account.DateAccounts and ExplanationDebitCreditNov. 4Paid $7,000 cash for rent.Paid $7,000 cash for rent.DateAccounts and ExplanationDebitCreditNov. 5Paid $5,000 for advertising in the local paperPaid $5,000 for advertising in the local paperDateAccounts and ExplanationDebitCreditNov. 5Bright, the owner, withdrew $7,000 cash.Bright, the owner, withdrew $7,000 cash.DateAccounts and ExplanationDebitCreditNov. 5
On January 1, 2024, an investor paid $261,000 for bonds with a face amount of $315,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2025 (assume annual interest payments and amortization)
Answer:
$26,100
Explanation:
Calculation to determine how much interest income is recognized by the investor in 2025
Using this formula
Interest income = Amount paid* market rate of interest
Let plug in the formula
Interest income= $261,000*10%
Interest income= $26,100
Therefore the interest income that is recognized by the investor in 2025 will be $26,100
Describe the organizational structure of your school or company. What difficulties have you encountered working within this structure
Answer:
My company have a centralized structure of management framework. Under this structure all the decisions are made by the executive level managers of the company.
The main problem that me and my fellow workers face under this structure is that we do not get any space for creativity and judgement of our own. Also the organisation, do not emphasize on our suggestions that we believe can actually make us more efficient.
You are to make monthly deposits of $1,721 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 5 years?
Answer:
FV= $126,585.60
Explanation:
Giving the following information:
Monthly deposit (A)= $1,721
Interest rate (i)= 0.08/12= 0.0067
Number of periods (n)= 12*5= 60 months
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
FV= {1,721*[(1.0067^60) - 1]} / 0.0067
FV= $126,585.60
Suppose the Chester company shifts focus to only competing in the Thrift and Nano segments, while competing on price by reducing costs and passing the savings to the customers, what strategy would they be implementing
Answer: c. Niche cost leader
Explanation:
Niche marketing is when a company focuses on a particular market or good. It is usually done to become more efficient in that niche such that one can dominate the market and become more profitable.
When Chester focuses on these markets with the aim of reducing costs, they are trying to be a cost leader in this niche which means that they are trying to produce at the least cost so that they can charge cheaper prices and capture more market share in this particular niche.
In a market economy, individuals' economic lives are said to be interrelated with many other individuals and firms. almost completely controlled by government regulation. illegal and in violation of government rules on prices and sales. based more on production than on consumption.
Answer:
Interrelated with many other individuals and firms
Explanation:
market economy can be regarded as an economic system whereby decisions as regards to investment, production asvwell as distribution are been guided by the price signals which is been at up by forces of supply and demand. Inthe activities are iunplanned. It should be noted that, In a market economy, individuals' economic lives are said to be interrelated with many other individuals and firms.
You are an adviser to the Indian government. Until now, government policy in India has been to severely limit imports into India, resulting also in a low level of Indian exports. The government is considering a policy shift toward much freer trade. What are the three strongest arguments that you can offer to the Indian government about why the policy shift to freer trade is desirable for India
Answer:
1. The size of the economy as a whole grows as a result of free trade.
2. Consumers benefit from free trade.
3. Free trade can reduce cost of trading:
Explanation:
The three strongest arguments that you can offer to the Indian government about why the policy shift to freer trade is desirable for India are as follows:
1. The size of the economy as a whole grows as a result of free trade: It provides for more efficient production of goods and services. This is because it encourages goods and services to be created in areas with the finest natural resources, infrastructure, or skills and experience. It boosts productivity, which can lead to greater long-term wages. There is universal consensus that growing global trade has boosted economic growth in recent decades.
2. Consumers benefit from free trade: By removing barriers and promoting competition, it lowers prices. Quality and choice are likely to improve as a result of increased competition.
3. Free trade can reduce cost of trading: Non-tariff barriers can be reduced, resulting in less red tape and lower trading costs. Companies that deal in multiple nations might reduce their compliance expenses by working with a single set of laws. In principle, this will lower the cost of goods and services.
Henry had to change the grades of four different students. He did so using his query that was calculating his grades. When he went back to the table, he should expect that
A. the new data was missing.
B. the table was also changed.
C. the new data was added to the table along with the old data.
D. the table required a new query to continue calculations.
Answer:
B. the table was also changed.
Explanation:
Took the test
On February 3, Smart Company sold merchandise in the amount of $2,700 to Truman Company, with credit terms of 1/10, n/30. The cost of the items sold is $1,865. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:
Answer:
Journal entry on February 8 :
Debit : Cash $2,673
Debit : Discount received $27
Credit : Account Receivable $2,700
Explanation:
The journal entry that Smart makes on February should show the Cash payment net of cash discount, a decrease in Total Account Receivable balance and recognition of an expense discount allowed up to 1 %.
A developer of a new townhome community estimates that there will be 1,200 home (all types) sales in University City over the next year. An analysis of demographic information has revealed that the core market share for the townhome project within the community is 10%. Assuming a capture rate of 20%, what is the developer's first-year projection of townhome sales in the new community
PAnswer:
24 units
Explanation:
Calculation to determine what is the developer's first-year projection of townhome sales in the new community
First-year projection=10%*1200*20%
First-year projection=24 units
Therefore the developer's first-year projection of townhome sales in the new community is 24 units
Following are the transactions of a new company called Pose-for-Pics. Aug. 1 Madison Harris, the owner, invested $12,750 cash and $54,825 of photography equipment in the company in exchange for common stock. 2 The company paid $3,500 cash for an insurance policy covering the next 24 months. 5 The company purchased office supplies for $2,423 cash. 20 The company received $2,050 cash in photography fees earned. 31 The company paid $868 cash for August utilities. Prepare general journal entries for the above transactions.
Answer:
Aug 1
Dr Cash $12,750
Dr Photography equipment $54,825
Cr Common stock $67,575
Aug 2
Dr Prepaid insurance $3,500
Cr Cash $3,500
Aug 5
Dr Office supplies $2,423
Cr Cash $2,423
Aug 20
Dr Cash $2,050
Cr Photography fees earned $2,050
Aug 31
Dr Utilities Expense $868
Cr Cash $868
Explanation:
Preparation of general journal entries for the above transactions
Aug 1
Dr Cash $12,750
Dr Photography equipment $54,825
Cr Common stock $67,575
($12,750+$54,825)
Aug 2
Dr Prepaid insurance $3,500
Cr Cash $3,500
Aug 5
Dr Office supplies $2,423
Cr Cash $2,423
Aug 20
Dr Cash $2,050
Cr Photography fees earned $2,050
Aug 31
Dr Utilities Expense $868
Cr Cash $868
The Sit-Ins were accompanied by boycotts of businesses that insisted on segregation. This often meant that protesters would not shop at popular stores, eat at popular restaurants, or go to movies at the local theater. How did boycotting affect these businesses
Answer:
I. Disruption of business activities
II. Severe losses
III. Reduced customer patronage
IV. Reduced revenue
V. Loss of customer loyalty
Explanation:
I. Disruption of business activities: The Sit-ins affected business activities in the businesses as the protesters have to take up spaces for other paying customers preventing effective service delivery to the other customers.
II. Severe losses: The businesses involved incurred high levels of losses as they lost slot of revenue from unused or unsold foods are
III. Reduced customer patronage: Customer patronage dropped as other paying customers have to boycott the businesses affected.
IV. Reduced revenue: Reduced revenue as a result of reduced patronage from the customers.
V. Loss of customer loyalty: When a business does not offer the desired services to its customers caused either through service disruption, other other factors it will most likely lead to reduced number of loyal customers.
Which firm is the oligopolist? Choose one: Firm A is in retail. It is one of the largest and most popular clothing stores in the country. It also competes with many rivals and faces intense price competition. Firm B is in the auto rental business. It is not the nation’s largest rental company, but significant barriers to entry enable it to serve customers across the United States more conveniently and at a lower price than local rivals. Firm C is a restaurant in a small, isolated community. It is the only local eatery. People drive from miles away to eat there.
Answer:
Firm B is in the auto rental business. It is not the nation’s largest rental company, but significant barriers to entry enable it to serve customers across the United States more conveniently and at a lower price than local rivals.
Explanation:
For the given options we considered Firm B to be treated as the oligopolist as the firm nor its competitors would have the major impact over the market also there are entry & exit barriers from the market
So the firm B should be chosen as the oligopolist
Therefore the same should be considered and relevant
Consider the following demand schedule: Price Quantity Demanded $25 20 $20 40 $15 60 $10 80 What is the price elasticity of demand between (using the arc formula) a) Price $25-$20 a) Price $20-$15 a) Price $15-$10
Answer:
3.05
1.38
0.725
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Arc elasticity of demand = midpoint change in quantity demanded / midpoint change in price
Midpoint change in quantity demanded = change in quantity demanded / average of both demands
Price $25-$20
change in quantity demanded = 40 - 20 = 20
average of both demands = (40 + 20) /2 = 30
Midpoint change in quantity demanded = 20/30 = 0.67
midpoint change in price = change in price / average of both price
change in price = $25 - $20 = $5
average of both price = ($25 + $20) / 2 = 22.5
Price $20-$15
change in quantity demanded = 60 - 40 = 20
average of both demands = (60 + 40) /2 = 50
Midpoint change in quantity demanded = 20/50 = 0.4
midpoint change in price = change in price / average of both price
change in price = $20 - $15 = $5
average of both price = ($15 + $20) / 2 = 17.5
midpoint change in price = 5 / 17.5 = 0.29
0.4/0.29 = 1.38
Price elasticity of demand = 0.67 / 0.22 = 3.05
change in quantity demanded = 80 - 60 = 20
average of both demands = (80 + 60) /2 = 70
Midpoint change in quantity demanded = 20/70 = 0.29
midpoint change in price = change in price / average of both price
change in price = $15 - $10 = $5
average of both price = ($15 + $10) / 2 = 12.5
5/12.5 = 0.4
Your company just sold a product with the following payment plan: $40,000 today, $35,000 next year, and $30,000 the following year. If your firm places the payments into an account earning 6% per year, how much money will be in the account after collecting the last payment?
Answer:
the money that will be in the account after collecting the last payment is $112,044
Explanation:
The computation of the money that will be in the account after collecting the last payment is shown below:
Amount is
= $40,000 × (1.06)^2 + $35,000 × (1.06) + $30,000
= $112,044
Hence, the money that will be in the account after collecting the last payment is $112,044
Why are multinational corporations (MNCs) getting involved in corporate social responsibility and sustainable business practice
Answer:
Some are genuinely giving back to the community:
Some MNCs are engaged in Corporate Social Responsibility (CSR) and Sustainable business practices because they genuinely care about the communities they have a presence in and the earth as well. With this is mind, they find out ways to give back to the community to ensure that people's lives are touched and improved so that the wider community benefits from the success of the MNC.
Brand Strengthening and Recognition.
Sometimes MNCs get involved in CSR to build their brand because people would associate their brand with the good works they do. This would go a long way in improving their sales figures as well because people want to support a company that supports its communities.
Tax Considerations.
Various tax credits exist for MNCs across many countries and tax regimes to reward them for their CSR activities. MNCs therefore see this as a chance to kill two birds with one stone as they get to use money that would have gone to taxes to improve their PR standing.
Assume that, on January 1, 2021, Matsui Co. paid $1,795,200 for its investment in 74,800 shares of Yankee Inc. Further, assume that Yankee has 220,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $440,000 at January 1, 2021. The following information pertains to Yankee during 2021:
Net income $240,000
Dividends declared and paid $72,000
Market price of common stock on 12/31/2016 $29/share
What amount would Matsui report in its year-end 2016 balance sheet for its investment in Yankee?
a. $1,608,000.
b. $1,368,000.
c. $1,329,600.
d. None of these answer choices is correct.
Answer: $1,852,320
Explanation:
First find out the proportion owned by Matsui.
= 74,800 shares / 220,000
= 34%
The investment at the end of the year is:
= Cost of investment + Shares of net income - Share of dividend
Share of income:
= Percentage ownership * Net income
= 34% * 240,000
= $81,600
Share of dividend:
= 34% * 72,000
= $24,480
Investment at end of year:
= 1,795,200 + 81,600 - 24,480
= $1,852,320
The initial value of your 401k savings plan is $35,000. The value your 401k savings plan at a later point in time is $44,500. The percent change in the value of your 401k plan over the period is
Answer: 27.14%
Explanation:
Percent change in value of 401k = (Ending value - Initial value) / Initial value * 100%
= (44,500 - 35,000) / 35,000 * 100%
= 9,500 / 35,000 * 100%
= 27.14%
An investment project has annual cash inflows of $4,200, $5,100, $6,300, and $5,500, and a discount rate of 15 percent. a. What is the discounted payback period for these cash flows if the initial cost is $6,900
Answer:
It will take 1 year and 307 days to cover the initial investment.
Explanation:
Giving the following information:
Initial investment= $6,900
Cash flows:
Cf1= $4,200
Cf2= $5,100
Cf3= $6,300
Cf4= $5,500
Discount rate= 15%
The payback period is the time required to cover the initial investment. We need to discount each cash flow.
Year 1= 4,200/1.15 - 6,900= -3,247.83
Year 2= 5,100/1.15^2 - 3,247.83= 608.50
To be more accurate:
(3,247.83 / 3,856.33)*365= 307 days
It will take 1 year and 307 days to cover the initial investment.
If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit
Answer:
the amount of units that should be sold in the case when there is a zero profit is 10,000 units
Explanation:
The computation of the amount of units that should be sold in the case when there is a zero profit is given below:
No. of units to be sold is
= Fixed Cost ÷ Contribution per unit
= $200,000 ÷ $20
= 10,000 units.
hence, the amount of units that should be sold in the case when there is a zero profit is 10,000 units
Assume your entry price for both long and short positions is $50 and you would like to set the reward-risk ratio (RRR) at 1.2. Calculate the profit and loss exit points for both long and short positions.
Answer:
Long Position
Profit exit point: sell limit= 8.33
Loss exit point= 41.66
Short Position
Lost exit point: buy stop= 58
Profit exit point:buy limit=40
Explanation:
Calculation to determine the profit and loss exit points for both long and short positions.
LONG POSITION profit and loss exit points
First step is to calculate the Profit exit point: sell limit
Profit exit point: sell limit=( 50x10% )/1.2
Profit exit point: sell limit=$10/1.2
Profit exit point: sell limit= 8.33
Now let calculate the Loss exit point
Loss exit point=50-8.33
Loss exit point= 41.66
SHORT POSITION profit and loss exit points
Lost exit point: buy stop=20%/x=1.2
Lost exit point: buy stop=20%/2
Lost exit point: buy stop=1.6
Lost exit point: buy stop= 50+(50x1.6)
Lost exit point: buy stop= 58
Now let calculate the Profit exit point:buy limit:
Profit exit point:buy limit=50-(50*.20)
Profit exit point:buy limit=40
The predetermined overhead rate for Marigold Corp. is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $7608 variable and $4824 fixed, and standard hours allowed for the product produced in June was 2400 hours. The total overhead variance is:________
a. $700 F.
b. $1,800 F.
c. $700 U.
d. $1,800 U.
Answer:
$11,568 favorable
Explanation:
The computation of the total overhead variance is shown below:
Total Overhead cost variance
= Actual total overhead - Budgeted total overhead
= ($7,608 + $4,824) - (2,400 hours × 2 × 5)
= $12,432 - $24,000
= $11,568 favorable
This is the answer but the same is not provided in the given options
In 1 to 2 paragraphs, analyze how a person's ethics or values might affect his performance on the job
Answer:
In simple words, Individual workers' ethical convictions have an impact on team and department productivity as well as individual achievement. Being an ethical worker allows you to be a stronger team participant constantly contributing positively in group situations and just never impeding collective success.
Even though all individuals are important in and of themselves, ethical individuals can be more monetarily useful to their companies as well as more respected by their colleagues and competitors. Reflecting on workplace ethics may help you become a better employee, and it's a good thing to begin if you want to do the right thing all of the time.
Answer:
How can poor ethics devalue you as an asset on the team? Well, if you have poor moral standards and beliefs and what not, people can somewhat easily identify your personality as a negative trait. However if you're a good person with good values and spot on ethics, people will quickly realize that you're a good asset to have on the team.
Your energy, work ethic, and values also determine how good or bad your work ethic is.
Explanation:
For Connections Academy Career Development Unit Test
Use the cost information below for Sundar Company to determine the total manufacturing costs added during the current year:
Direct materials used $19,000
Direct labor used 24,500
Factory overhead 55,100
Beginning work in process inventory 10,700
Ending work in process inventory 11,300
Answer:
cost of goods manufactured= $98,000
Explanation:
Giving the following information:
Direct materials used $19,000
Direct labor used 24,500
Factory overhead 55,100
Beginning work in process inventory 10,700
Ending work in process inventory 11,300
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 10,700 + 19,000 + 24,500 + 55,100 -11,300
cost of goods manufactured= $98,000
g A company shows a balance in Salaries and Wages Payable of $50,000 at the end of the month. The next payroll amounting to $75,000 is to be paid in the following month. What will be the journal entry to record the payment of salaries
Answer and Explanation:
The journal entry is
Salaries and Wages Payable $50,000
Salaries and Wages Expense $25,000
To Cash $75,000
(Being cash paid is recorded)
Here salaries & wages payable and salaries & wages expense is debited as it decreased the liabilities & increased the expense while the cash is credited as it decreased the assets
At year-end, the following additional information is available: a. The balance of Prepaid Rent, $4,920, represents payment on October 31, 2018, for rent from November 1, 2018, to April 30, 2019. b. The balance of Deferred Revenue, $1,100, represents payment in advance from a customer. By the end of the year, $275 of the services have been provided. c. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2019. d. The balance of Supplies, $2,100, represents the amount of office supplies on hand at the beginning of the year of $750 plus an additional $1,350 purchased throughout 2018. By the end of 2018, only $610 of supplies remains.
Question Completion:
The December 31, 2018, unadjusted trial balance for Demon Deacons Corporation is presented below.
Accounts Debit Credit
Cash $ 8,100
Accounts Receivable 13,100
Prepaid Rent 4,920
Supplies 2,100
Deferred Revenue $ 1,100
Common Stock 11,000
Retained Earnings 4,100
Service Revenue 37,520
Salaries Expense 25,500
Total $ 53,720 $ 53,720
Use the following additional information to prepare the adjusted Trial Balance.
Answer:
Demon Deacons Corporation
Adjusted Trial Balance
As of December 31, 2018
Accounts Debit Credit
Cash $ 8,100
Accounts Receivable 13,100
Prepaid Rent 3,280
Supplies 610
Deferred Revenue $ 825
Common Stock 11,000
Retained Earnings 4,100
Salaries Payable 700
Service Revenue 37,795
Rent Expense 1,640
Salaries Expense 26,200
Supplies Expense 1,490
Total $ 54,420 $ 54,420
Explanation:
a) Data and Analysis:
a. Rent Expense $1,640 Prepaid Rent, $1,640 ($4,920 * 2/6) rent from November 1, 2018, to April 30, 2019.
b. Deferred Revenue, $275 Service Revenue $275
c. Salaries Expense $700 Salaries Payable $700
d. Supplies Expense $1,490 Supplies $1,490
Accounts Debit Credit
Cash $ 8,100
Accounts Receivable 13,100
Prepaid Rent 4,920 - 1,640 = 3,280
Supplies 2,100 - 1,490 = 610
Deferred Revenue $ 1,100 -275 = 825
Common Stock 11,000
Retained Earnings 4,100
Salaries Payable 700
Service Revenue 37,520 + 275 = 37,795
Rent Expense 1,640
Salaries Expense 25,500 + 700 = 26,200
Supplies Expense 1,490
Total $ 53,720 $ 53,720
4. Which of the following situations typically would result from an appreciating U.S. dollar relative to the
Canadian dollar?
A. More Canadian tourists visit the U.S.
B. Canadians purchase more U.S. goods
C. Fewer American tourists visit Canada
D. Americans purchase more Canadian made products.
Answer:
D. Americans purchase more Canadian made products.
Explanation:
The situation that would typically result from an appreciating U.S. dollar relative to the Canadian dollar is "Americans purchase more Canadian made products."
When Americans purchase more Canadian-made products, the Canadian dollar will rise or appreciate against the U.S. dollar. This is based on the principle of trade balance, whereby the monetary value of a country's imports and exports are evaluated over a given period.
In this case, the monetary value of Canadian exports against the U.S. dollar will indicate a positive trade surplus, hence, the Canadian dollar or currency will appreciate against the U.S. dollar.