Use the Following Information for the Next 3 Questions

question 124

Multiple Choice

Use the following information for the next 3 questions.
Taylor Enterprises sells its product for $40 per unit. Taylor recently received a special order from a customer for 20,000 units. Production costs per unit for regular sales are:
-Suppose the special order price is $600,000 for all 20,000 units, and assume that Taylor has sufficient capacity to fill the special order. Should it be accepted?

• A) Yes, because profits will increase by $120,000
• B) No, because profits will decrease by $200,000
• C) No, because profits will decrease by $40,000
• D) Yes, because profits will increase by $40,000

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Definitions:

Fiscal Policy

Governmental policies regarding taxation and spending to influence an economy.

Monetary Policy

The actions taken by a central bank, currency board, or other regulatory authority to control the supply of money and interest rates in an economy.

Lender Of Last Resort

An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky.

M1 Money Supply

The total money supply that includes cash and liquid assets that are easily convertible into cash, such as demand deposits.