According to the Stabilization Policy Video,one Problem with Discretionary Fiscal

question 65

Multiple Choice

According to the Stabilization Policy video,one problem with discretionary fiscal stimulus is that

• A) as you expand the economy, spending on foreign goods increases, thus reducing its impact on domestic output and employment.
• B) consumers and businesses do not expect the policies to work, so they are unprepared to take advantage of the opportunities created.
• C) it works only when monetary authorities reduce the money supply to counter inflation.
• D) the employment created is primarily in government agencies and not in the private sector.
• E) it leads to stabilization in the long run while allowing existing economic hardship to persist indefinitely.

Estimate sales required to achieve a target profit.

Understand the concept of contribution margin ratio and its application in determining target profit sales.

Compute margin of safety in both dollars and percentage terms.

Calculate monthly break-even points in units and total dollar sales.

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Definitions:

Stakeholders

Individuals or groups that have an interest, stake, or investment in a company and can either affect or be affected by the business’s actions, objectives, and policies.

Shareholders

Individuals or entities that legally own one or more shares of stock in a joint-stock company.

Consumers

Individuals who purchase goods and services for personal use.

Mission Statement

A concise description of a company’s purpose, its goals, and how it serves its stakeholders.