Based on Your Understanding of the AS- AD Model and the IS-

question 64

Essay

Based on your understanding of the AS- AD model and the IS- LM model, graphically illustrate and explain what effect an increase in the minimum wage will have on the economy. In your graph, clearly illustrate the short- run and medium- run equilibria. Also include in your answer an explanation of the effects of this change in minimum wage on the labour market and the equilibrium real wage.

Prepare and interpret journal entries related to share transactions and dividends.

Understand the calculation and significance of share dividends, including bonus issues and cash dividends.

Analyze the impact of treasury shares on shareholders' equity.

Calculate retained earnings and understand its role in shareholder equity.

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Definitions:

Boeing

An American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunication equipment, and missiles worldwide.

Institutional Investor

An organization, such as a bank, pension fund, mutual fund, or insurance company, that invests large sums of money into the financial markets.

Zero-Coupon Bonds

Bonds issued at a discount to their face value, paying no periodic interest but redeemed at par value at maturity.

Par Value

The face value of a bond or stock, as stated by the issuing company.