Peter Property acquired a vacant building on June 30,2022 . In July, 2022, Peter incurs $20,000 for restoration, routine repairs and maintenance including, $4,000 to patch holes in walls, $5,000 for painting hallways, and $11,000 for restoring floors to its original condition. The property is placed in service on August 15,2020 . How should the taxpayer treat these costs? a. All the costs may be deducted b. Only $4,000 for the patching of holes in the walls may be expensed; the balance will need to capitalized as part of cost of the building. c. Only $5,000 for the painting of the hallways may be expensed; the balance will need capitalized as part of cost of the building. d. Only the $11,000 for floor restoration will need to be capitalized. e. All the costs must be capitalized.
Answers
The correct option is b. Only $4,000 for the patching of holes in the walls may be expensed; the balance will need to be capitalized as part of the cost of the building.
According to the information provided, Peter Property acquired a vacant building on June 30, 2022, and incurred $20,000 for restoration, routine repairs, and maintenance in July 2022. The costs include $4,000 for patching holes in the walls, $5,000 for painting hallways, and $11,000 for restoring floors to their original condition. The property was placed in service on August 15, 2020.
In general, restoration, repairs, and maintenance costs incurred after the property is placed in service are typically capitalized and added to the cost basis of the building. However, there are certain exceptions where some costs may be expensed immediately.
In this case, the cost of patching holes in the walls, amounting to $4,000, maybe expensed and deducted as it is considered routine repair and maintenance. The remaining costs, $5,000 for painting hallways and $11,000 for floor restoration will need to be capitalized and added to the cost of the building.
Therefore, option b is the correct answer.
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Related Questions
stewart county school district is about to raise funds for a new school through a bond issue. the plan is to raise $3,475,000 with a 3.15% coupon, 12-year bond. the underwriter indicates the bonds will be sold at a price of $100.65 per $100. the yield to maturity on the bond is:
Answers
The calculated yield to maturity is approximately -0.9643 or -96.43%.
To calculate the yield to maturity (YTM) on a bond, we need to consider the coupon rate, bond price, and the bond's remaining term.
Given:
Face Value of the Bond (FV) = $100Coupon Rate = 3.15%Bond Price = $100.65Remaining Term = 12 yearsTo calculate the yield to maturity, we can use financial functions or approximation methods. Here, we'll use an approximation method:
Step 1: Calculate the annual coupon payment:
Coupon Payment = Coupon Rate * Face ValueCoupon Payment = 3.15% * $100Coupon Payment = $3.15Step 2: Calculate the total cash inflow from the bond over its remaining term:
Total Cash Inflow = (Annual Coupon Payment * Number of Years) + Face ValueTotal Cash Inflow = ($3.15 * 12) + $100Total Cash Inflow = $37.80 + $100Total Cash Inflow = $137.80Step 3: Calculate the yield to maturity using the bond price and total cash inflow:
\(YTM = (Total Cash Inflow / Bond Price) ^{ (1 / Remaining Years) - 1\)\(YTM = ($137.80 / $100.65) ^ {(1 / 12) - 1\)\(YTM = 1.3708 ^ {(1 / 12) - 1\)YTM = 0.0357 - 1YTM = -0.9643The calculated yield to maturity is approximately -0.9643 or -96.43%.
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Which of the following is true about the sales force of a company? Group of answer choices Salespeople represent customers to the company, championing customers' interests. The sales force plays a minor role in customer-company relationships. Salespeople rarely visit in person with customers. Salespeople do not have the authority to act on customers' objections. Salespeople rely on engineers and manufacturers to learn about customer needs.
Answers
The statement that is true about the sales force of a company is: "Salespeople represent customers to the company, championing customers' interests."
Salespeople play a crucial role in customer-company relationships by acting as a bridge between the two. They serve as the voice of the customers within the company, advocating for their interests and needs.
By interacting with customers directly, salespeople gather valuable feedback, identify customer preferences, and relay this information to the company. They play an active role in understanding customer requirements and ensuring that the company's products or services meet those needs.
Salespeople often meet customers in person to establish strong relationships and build trust. These face-to-face interactions provide an opportunity to address any concerns, answer questions, and provide personalized assistance.
Salespeople also have the authority to act on customers' objections. They are trained to handle objections, negotiate deals, and resolve any issues that may arise during the sales process. By addressing objections and concerns, salespeople aim to close deals and satisfy customers.
While salespeople may rely on engineers and manufacturers for technical knowledge and expertise, they are the primary point of contact for customers. They gather information about customer needs and preferences, and then work with the relevant teams within the company to meet those requirements.
In summary, the statement that accurately describes the sales force of a company is that "Salespeople represent customers to the company, championing customers' interests." They play a significant role in customer-company relationships, visiting customers in person, addressing objections, and gathering crucial information to ensure customer satisfaction.
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Which of the following factors are important considerations when evaluating a business idea? (Check all of the boxes that apply)
Your personality
Location of business
Your finances
Your competition
Number of employees
The number of hours you will work weekly
Answers
Answer:
location of business
your finances
When a firm is producing at the level of output that maximizes profit which of the following is true
Answers
The primary purpose of a firm is to make "Profit" in the Long-run.
The maximization of profit in a firm occurs at the level of output where the marginal revenue equal to marginal cost \({MR = MC}\).As we know, the goal of a firm is to maximize profits and minimize losses, so a shutdown is immininent if a firm is operating at the level of output where marginal revenue is not equal or lesser that marginal cost.In conclusion, firm kept expanding its production capacity as long as its Marginal Revenue is greater than Marginal Cost \({MR > MC}\) but this changes when marginal revenue is equal to marginal cost \({MR = MC}\).
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Answer:
Marginal revenue is equal to marginal cost
long the diffusion of innovation curve, blank make up the second group of consumers to adopt an innovation; they tend to be leaders in a social setting. multiple choice question. first movers innovators pioneers early majority early adopters need help? review these concept resources.
Answers
Early adopters are the second group of consumers to adopt an innovation on the diffusion of innovation curve. They are leaders in a social setting, deliberate in their decision-making process, and can be a key target for businesses and innovators seeking to successfully introduce new innovations to the market.
The second group of consumers to adopt an innovation on the diffusion of innovation curve are the early adopters. They tend to be leaders in a social setting and are eager to try out new ideas and products. They are a crucial group for the success of an innovation because they are the ones who bridge the gap between the innovators and the early majority.
Early adopters are different from the first movers or innovators, who are the first to try out a new idea or product. Early adopters are more deliberate in their decision-making process and tend to be more strategic in their adoption of new innovations. They carefully evaluate the potential benefits and risks before deciding to adopt.
For businesses and innovators, targeting early adopters can be a key strategy for successful adoption of new innovations. Early adopters can provide valuable feedback, create positive word-of-mouth buzz, and help to establish credibility for the innovation among the broader market.
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Find the total deposit if you have: Checks for $152.54 and $147.46, cash of 54 one dollar bills, 12 five dollar bills, 6 ten dollar bills, 35 quarters, 18 dimes, 40 nickels and 75 pennies; less $50 as cash received
Answers
Answer:
$437.30
Explanation:
Checks $ 152.54
$ 147.46
54 one dollar bills 54 x 1 $ 54.00
12 five dollar bills 12 x5 $ 60.00
6 ten dollar bills 6 x 10 $ 60.00
35 quarters 35 x 25 cents $ 8.75
18 dimes 18 x 10 cents $ 1.80
40 nickels 40 x 5 cents $ 4.00
75 pennies 75 x 1 cents $ 0.75
Total amount 487.30
less $50 dollars change = 437.30
N Apple bought goods on credit from Pencil Point Ltd. What is the double entry to record this transaction in the accounting records of Pencil Point Ltd? a. Debit N Apple, Credit Sales b. Debit Sales , Credit N Apple c. Debit Purchases, Credit Pencil Point ltd d. Debit Pencil point Ltd, Credit Purchases.
Answers
Answer:
c. Debit Purchases, Credit Pencil Point ltd
Explanation:
The journal entry for purchasing the goods from the Pencil point ltd on credit is given below;
Since the goods are purchased so here purchase account is debited and we credited the pencil point ltd
So, the journal entry is
Purchase Dr XXXX
To Pencil Point ltd XXXX
(Being goods purchased on credit)
The purchase is debited as it increased the assets and pencil point ltd is credited as it also increased the liability
all of the following are true about the issuance of non-voting common stock except a. it has been issued when the corporation wishes to raise capital through the sale of common stock but does not want to relinquish its voting control b. it has been issued as a defense against an unfriendly takeover c it tends to result in the dilution of voting rights of current stockholders od. it tends to result in unequal voting rights among the shareholders
Answers
The correct answer is d. It tends to result in unequal voting rights among the shareholders.
Non-voting common stock is a class of shares issued by a corporation that does not carry voting rights. It is used in various scenarios, such as when a corporation wants to raise capital through the sale of common stock but does not want to relinquish its voting control (option a). It can also be issued as a defense mechanism against an unfriendly takeover (option b).Additionally, the issuance of non-voting common stock can result in the dilution of voting rights of current stockholders (option c).
This means that the proportion of voting rights held by existing shareholders may decrease when non-voting common stock is introduced.However, the issuance of non-voting common stock does not necessarily result in unequal voting rights among shareholders (option d). Non-voting shares typically carry the same economic rights as voting shares but do not provide the shareholders with the ability to vote on corporate matters. Therefore, while the voting rights may be different, the economic rights are generally equal for all shareholders.So, the correct statement is: "It tends to result in the dilution of voting rights of current stockholders" (option c).
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Dividends are paid out of profits, and:
(A) dividends are paid before a firm's taxes are paid.
(B) dividend payments must be approved by the firm's board of directors.
(C) dividends are guaranteed.
(D) dividends are usually paid twice a year.
(personal finance question)
Answers
Dividends are given out of profits, and it is commonly pay off twice a year. Option D is correct.
What are dividends?A dividend is defined as the amount of profit that is available for the distribution by a corporation to its shareholders, this amount of profit is given only when an enterprise earns a profit.
The majority of dividends are paid four times a year, on a quarterly basis, but some companies pay dividends twice a year.
Therefore, option D is correct.
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individuals in different segments should have ______ within the segment and ______ across the segments.
Answers
Answer:
similarities; differences Is correct answer
Explanation:
individuals in different segments should have similarities within the segment and differences across the segments.
(Hope this helps can I pls have brainlist (crown)☺️)
Trudy’s monthly expenses are outlined in the chart below. Trudy’s job pays her $36,000 annually. Determine Trudy’s DTI (debt-to-income) ratio. Trudy's Debt and Income Income: $36,000 (annually) Rent: $695 (monthly) Car Payment $265 (monthly) Student Loan $200 (monthly) Credit Cards $160 (monthly) a. 28% b. 35% c. 37% d. 44%.
Answers
The correct statement is that Trudy's debt-to-equity ratio is 44% of his annual salary. So, the correct option that matches the quoted statement is D.
The amount of loans taken by Trudy, including the education loan, credit cards, car loan, house rent, etc. These monthly payments are calculated as $2400, $1920, $3180, $8340 annually respectively.
Debt-To-Equity ratioDebt to equity ratio is a ratio that determines the percentage of debts of a person over the person's assets or equities held by such person. This can be explained with the help of the following formula, \(\rm Debt-to-Equity\ Ratio = \dfrac {Loans\ and\ Advances}{Annual\ Salary}\)The debts of Trudy can be calculated by addition of car loan, rent, student loan, credit cards as, \(\rm Debts= 2400+1920+3180+8340\\\\\rm Debts=\$15840\)Now applying the values of debts in to the formula to obtain the ratio as, \(\rm Debt-to-Equity\ Ratio = \dfrac {15840}{36000}\\\\\rm Debt-to-Equity\ Ratio =0.44\)So, the debt-to-equity ratio is calculated as 44 percent.Hence, the correct option is D that Trudy's Debt-to-Equity ratio is 44% on an annual salary of $36,000 and such amount of loans and advances.
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Use the Sollow model to answer the following questions.
(a) Many say that if people save more, that’s bad for the economy: They say that spending money on consumer goods keeps the money moving through the economy. Does this model say that?
(b) Many people say that when machines and equipment get destroyed by bad weather or war, that makes the economy better off by encouraging businesses and families to spend money on new capital goods. Does this model say that?
Answers
Using the Solow model, the answer to (a) is no, saving more does not necessarily mean bad for the economy. It is true that spending money on consumer goods keeps money moving through the economy, however, saving money also contributes to economic growth, as it provides funds for businesses to expand and invest in capital goods, creating more jobs and increasing incomes.
The answer to (b) is also no. The Solow model does not suggest that destruction of machines and equipment makes the economy better off, as this does not increase the available capital. Rather, it suggests that economic growth is driven by investment in capital goods, technological progress, and increased labor supply.
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URGENT- FINANCIAL MATH.One of the variable expenses that Roxy knows she’ll need to include in her budget is utilities. She decides to review her utility costs for the past year. Assuming the cost for utilities is the same in her new apartment, how much should Roxy budget each month for utilities this year? Explain your reasoning.
Answers
Answer:
Roxy should budget 2165. per year. So maybe a monthly of 144 for the average of the total. For the year I added all the months together and then monthly I added them together and then divided the total by 12 and the average is 144 a month.
Explanation:
If you add them all together that is the total. I hope this helps. But the utilities could be different where she is going.
You are the manager of a project that has an operating leverage rating of 2.8 and a required return of 14 percent. Due to the current state of the economy, he expects sales to decrease by 7 percent next year. What change should you expect in operating cash flows next year given your sales forecast?
Answers
Answer:
The change should you expect in operating cash flows next year would be 19.60%
Explanation:
In order to calculate the change should you expect in operating cash flows next year given your sales forecast we would have to make the following calculation:
change should you expect in operating cash flows=operating leverage rating*percentage of decrease sales next year
change should you expect in operating cash flows=2.8*0.07
change should you expect in operating cash flows=19.60%
The change should you expect in operating cash flows next year would be 19.60%
Tell me 3 characteristics of money?
Answers
1.) durability
2.) acceptability
3.) scarcity
4.) portability
5.)divisibility
6.)uniformity
choose any three u want! :)
Characteristics of Money.
Answer:
(a) Divisibility
(b) Limited supply
(c) Durability
More:
(d) Portability
(e) Acceptability
(f) Uniformity
These are the characteristics of money.
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Post-Assessment
Question 2 of 5
Why is buying a car considered "bad debt"?
It decreases in value over time
It increases your net worth as it build equity
It gives you transportation to and from your job
It is worth more than any other investment
Submit
Continue
E
Answers
The reason why buying a car considered "bad debt"is that It decreases in value over time. option A
What is bad debt?The term bad debt can be described as the amount of money that a creditor must write off as a result of a default on the part of the debtor in a case whereby the creditor has a bad debt on the books, then things turn to uncollectible and is recorded as a charge-off.
It should be noted that a case can be regarded as bad debt because the value of the asset you receive from the loan depreciates quickly however in some cases interest charges increase how the amount that is been paid for the vehicle. and in thius case cost is higher compare to what it would be if you'd purchased the car outright with cash.
Hence, option A is correct.
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3. A fine-dining restaurant has been making every- thing from scratch for the five years it has been open; it is the only operation in the area known for scratch- cooking. The management hires a new chef who does a make–buy analysis only to discover that she can get much better pricing on many of her products if she buys them premade. After a tasting comparison, she discovers that the premade products are of high quality and taste only slightly different from her own. Should she switch to the premade products? Would your answer be different if this decision took place when the restaurant first opened?
Answers
Answer:
No
Explanation:
The premade products could have been contaminated with any type of disease because she doesn't know what went inside whereas making it from scratch means she is able to monitor and remove and contaminated product.
:)
g a firm needs to ship 7 high-end computers worth $5000 each across the country. the cost to ship all of them by air and then final delivery by truck is $1000 from a 3pl. the combined air/truck shipment will take 3 days. the firm uses an in-transit holding cost of 0.22 of product value annually. if we assume 365 days per year, what is the total shipping and transit inventory cost of the shipment? (please round your answer to the nearest whole number)
Answers
The total shipping and transit inventory cost of shipment is $1100.
What is an inventory?Inventory refers to the goods and materials that a company keeps on hand with the intention of producing, selling, or using them. The description of the dimensions, arrangement, and location of stocked products is the main aim of inventory management. Moving production and material inventories ahead of the regular and scheduled course is crucial at various points within a facility or throughout a supply network. Inventory is the term used to describe all finished work in a manufacturing production system, including raw materials, partially finished goods, finished goods that haven't been sold yet, and finished goods that have left the manufacturing system. When referring to inventory in the context of services, all work completed prior to sale is included, even incompletely processed data.
Total cost= $5000*0.22= $1100
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What decision did a London Court Reach In this case?
Answers
Answer:
A.
Explanation:
I did B from the person above and got it wrong and it said that A was the answer :)
Answer:
A. The writing of The Da Vinci Code did not violate copyright law.
Explanation:
Right on ED2021, goodluck!
When you purchase an item from Globus Corp., they place the item in a paper bag with handles and vertical yellow, blue, and white stripes. Even without seeing the words "Globus Corp." on the bag, many people recognize that the purchase is from Globus. The bag's coloring and design is considered its ________. Group of answer choices trademark collective mark certification mark service mark trade dress
Answers
The bag's coloring and design are considered its trade dress.
What is a trade dress?The commercial look and feel of a product or service that identifies and distinguishes the source of the product or service are referred to as trade dress. It encompasses the different aspects (such as material design and shape) used to package a product or service.What is a certification mark?A certification mark is a sort of trademark that is used to show consumers that specific goods and/or services, or the providers of those goods and/or services, have satisfied certain requirements.What is a service mark?A "service mark" is a form of trademark that is protected and governed by the Lanham Act. Service marks are used to identify and distinguish one individual's or organization's services, even if they are unique, from those supplied by others.What is a collective mark?A collective trademark, collective trademark, or collective mark is a trademark owned by an organization that is used by its members to identify themselves with a certain degree of quality or accuracy, geographical origin, or other features specified by the organization.Therefore, the bag's coloring and design are considered its trade dress.
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if an increase of an equal percentage in all factors of production increases output of the same percentage, then a production function has the property called:
Answers
if an increase of an equal percentage in factors of production increases output of the same percentage, then a production function has property called constant returns to scale.
A production function's attribute known as constant returns to scale (CRS) describes how inputs also known as factors of production and outputs are related to one another. When a production function displays CRS, all inputs must increase by the same percentage in order to produce an increase in output of the same proportion.
In other words, a company's output will double if all of its inputs are doubled. Its output will also triple if its inputs are increased thrice. Constant returns to scale refer to the fact that this connection is true regardless of the production scale. Therefore, a production function has the property known as constant returns to scale if an increase of an equivalent proportion in components of production increases output by an equal percentage.
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2. Which of the following is not involved in the role of procurement? DE
(1 Point)
O Purchasing supplies
Receiving deliveries
Creating advertising campaigns
Identifying good to buy
O Choosing suppliers
Answers
Elaborate the logistics network design on strategic and tactical level of a restaurant business.
Answers
Logistics network design involves planning, implementing, and controlling the movement of goods and services within and between businesses. Strategic logistics network design refers to the creation of long-term strategies that align with a company’s overall goals.
Meanwhile, tactical logistics network design refers to the implementation of short-term plans that support the company’s strategic goals. Here’s how these concepts apply to a restaurant business:Strategic levelThe strategic logistics network design of a restaurant business involves determining the most efficient and effective way of moving raw materials and finished goods from suppliers to the restaurant and from the restaurant to customers. This involves assessing the company’s overall goals and objectives, such as reducing costs, improving delivery times, or expanding into new markets.
Restaurant businesses also need to take into consideration the specific needs and preferences of their customers in designing their logistics network.Tactical levelThe tactical logistics network design of a restaurant business involves implementing the strategies developed at the strategic level. This involves making decisions about how to allocate resources, such as vehicles and drivers, to ensure that raw materials and finished goods are delivered to the right place at the right time. For example, a restaurant business may use a combination of company-owned vehicles and third-party logistics providers to manage its deliveries. It may also use technology such as GPS tracking and route optimization software to ensure that deliveries are made as efficiently as possible.To sum up, logistics network design is an essential aspect of any restaurant business. By developing both strategic and tactical plans, companies can ensure that they are able to meet their customers’ needs while also achieving their overall business objectives.
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Arrange the following revenues in the federal government, from greatest to
least.
Drag each item to put them in the correct order.
(2 points)
= excise taxes
= Social Security and Medicare taxes
= corporate income taxes
= individual income taxes
= customs duties
= miscellaneous revenue
Answers
Social Security and Medicare taxes
Corporate income taxes
Excise taxes
Custom duties
miscellaneous revenue
Children’s Picture Book. Create a picture book about a career that you are
interested in or passionate about. You will create an original storybook for
children ages 5 through 8 that describes what a person does working in this
specific profession. Your children’s book should include the following: An
original story about a specific career (minimum of 6 pages) with (1)
Descriptions of what it is like to be in this specific profession. (2) Illustrations
that are colorful, rich and add to the text of your book. If you feel
uncomfortable drawing or painting, use a digital camera to stage photos of
your illustrations. Another idea is to use a combination of media: clip art,
drawings, photographs, magazine clippings to create your illustrations. Be
inventive. (3) At the end of the story create a glossary with ten words that
people in this profession use or need to know with descriptive definitions of
each word. (4) Include a blurb about you, the author on the last page of the
book. (5) Bind your book in a beautiful way to enhance the character of your
book. After all your hard work, do not just put a staple in it and call it done.
FOR A CRIME SCENE INVESTIGATOR I NEED THIS ASAP PLEASE
Answers
Picture Below ;)
Keep helping others.!
Never stop learning!
Answer:


Start your adventure with these Collectible Boxed Sets!


BOOK 1
Keeper of the Lost Cities
Twelve-year-old Sophie Foster has a secret. She’s a Telepath–someone who can read minds. It’s a talent she’s never known how to explain. Everything changes the day she meets Fitz, a mysterious (and adorable) boy who appears out of nowhere, and who can also read minds like her. She discovers there’s somewhere she does belong, and that staying with her family will put her in grave danger. In the blink of an eye. Sophie is forced to leave behind everything and start a new life in a place that is vastly different from what she has ever known.
Read the following situation and decide whether or not anyone in the situation commits sexual harassment. Justify your judgement: “Kylie is Hector’s boss. Hector is attracted to Kylie and asks her on a date. Kylie, although flattered, turns Hector down. He feels a little hurt, but doesn’t bring it up again. Kylie, speaking with both male and female coworkers, describes Hector’s proposal and makes a joke about the lack of romantic prospects in his future. Hector hears about this conversation a week later.”
Answers
Answer:
Hector does not commit sexual harassment against Kylie when he asks her out. It is a one time event, and he does not push the issue. Kylie does not commit sexual harassment when she refuses Hector's proposal for a date. She does not demean him. Kylie does commit sexual harassment when she brings the incident up in the workplace. She speaks disparagingly of Hector's sexuality and it gets back to him. He can bring a sexual harassment claim against Kylie through his company.
Explanation:
on e2020
Answer:
Hector does not commit sexual harassment against Kylie when he asks her out. It is a one time event, and he does not push the issue. Kylie does not commit sexual harassment when she refuses Hector's proposal for a date. She does not demean him. Kylie does commit sexual harassment when she brings the incident up in the workplace. She speaks disparagingly of Hector's sexuality and it gets back to him. He can bring a sexual harassment claim against Kylie through his company.
Explanation:
where does McKenna grace live? Brainliest for the correct answer
Answers
Answer:
McKenna grace lives in Texas of America.
Which example does not describe a bank asset category? a) Bonds b) Loans c) Reserves d) Deposits. d) Deposits
Answers
Deposits does not identify a type of bank assets.
How would you define assets?Your possessions are your assets if you can sell them for cash. Any asset that an entity owns or manages serves as an asset in accounting. Something that may be sold for pay qualifies. We may assess the equity value by looking at a balance sheet's inventory and debts.
What classifies as an asset?An asset class is a collection of investments that share similar traits and are governed by the same rules and laws. Common examples of asset types are equities, fixed-income assets, cash and equivalents, real estate, materials, and currencies.
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According to the Taylor rule, if output is above its full-employment level and inflation is less than 2% :
A. what the Fed should do is ambiguous.
B. the Fed should raise the Fed funds rate above 4%.
C. the Fed should reduce the Fed funds rate below 4%.
D. the Fed should make the Fed funds rate exactly 4%
Answers
According to the Taylor rule, if output is above its full-employment level and inflation is less than 2%, the Fed should reduce the Fed funds rate below 4%.
The Taylor rule is a monetary policy guideline that suggests adjusting the short-term interest rates based on deviations of output and inflation from their target levels. In this scenario, since output is above its full-employment level, indicating potential inflationary pressures, and inflation is below the target of 2%, the Taylor rule suggests that the Fed should lower the Fed funds rate to stimulate economic activity and increase inflation towards the target level.
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According to the Taylor rule, if output is above its full-employment level and inflation is less than 2%, the Fed should reduce the Fed funds rate below 4% (option c).
This is because the rule suggests that in such a scenario, the economy is operating above its potential and there is still room for growth without triggering inflation. By lowering interest rates, the Fed can encourage borrowing and spending, which can further boost economic growth and reduce unemployment.
However, it is important to note that the Fed's decision on interest rates is not solely based on the Taylor rule, but also considers other factors such as financial stability and global economic conditions. The correct option is c.
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When the business cycle or economic activity is declining, the economy is said to be in....?
A
the trough
B
contraction
C
expansion
D
recovery
Answers
contraction is to decline the answer is B