Discuss the Correct and Incorrect Economic Analysis in the Following

question 210

Essay

Discuss the correct and incorrect economic analysis in the following statements.
"The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers.This increase in the wage rate causes an increase in demand for automobiles,since many consumers now have greater incomes,and also a decrease in the supply of automobiles because the cost of production has increased.These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand for making immediate, minor expenditures.

Journal Entries

The recordation of financial transactions in a company's accounting system, typically involving a debit and credit entry.

Discrepancy

An inconsistency or difference that arises in the course of comparing two sets of figures or facts, often leading to questions that require resolution.

Cash Short And Over

An account that records discrepancies between actual cash received and the expected amount, either indicating missing funds (short) or excess funds (over).