____________ refers to identifying the elements of a job and arranging its tasks and responsibilities for the purpose of creating a productive work unit.

Answer:

correct answer is d . $6,778

Explanation:

we get here total federal income tax that will be

as we know that

federal income tax withholding barbara  = $2784

federal income tax withholding mark =$2253

form SSA 1099          =  $1721

and form 1099 interest income = $20

we get total federal income tax that is sum of all four

total federal income tax = $2784 + $2253 + $1721 + $20  

total federal income tax =  $6,778

so correct answer is d . $6,778

Answer:

amount record inventory = 13,167

correct option is c. $13,167

Explanation:

given data

purchased =  $13,300

terms =  1/15, net 30

Freight charges = $280

solution

we get here amount record inventory from the purchase

amount record inventory = purchased  × ( 1 - 0.01 )

amount record inventory = 13300 × (1 - 0.01)

amount record inventory = 13300  0.99

amount record inventory = 13,167

correct option is c. $13,167

Answer:

B. There will be a decrease in supply.

Explanation:

The switch would cause the amount of cow rearers to fall. The amount of cow available would fall and there would be a decrease in the supply of beef.

I hope my answer helps you

If people raising cows switch to selling t-shirts, the supply of beef will decrease. Fewer producers in the market mean less quantity of beef produced and supplied. Other variables, such as importation of beef, are ignored.

If many people who earn a living raising cows decide to switch occupations and start selling t-shirts, this will lead to a decrease in supply of beef. This is because when these producers exit the beef production market, less beef is produced and supplied. Less producers in the market equates to less quantity of the product (in this case, beef) being supplied. This concept is fundamental in the realm of supply and demand in economics. It's important to note, however, that other variables, such as importation of beef, is ignored in this scenario.

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Answer:

Explanation:

Labor productivity = Total output/ Total Input  

Labor rate = $10. Labor hours = 1,000

So total labour input = 1,000*10= 10,000.

Materials and energy cost input = 2000+500

⇒ total input = 10,000+ 2000+500= 12500

Total output (units produced) = 10,000

Labor productivity= 10,000/12500= 0.80

Answer:

A. Your high school or college transcript

Explanation:

The banks will evaluate the loan application considering all factors that are pointers to the person's or entity's ability to repay the loan and in due time.

These factors include employment status and your ability to make payments now and in the future, credit history report, savings or other assets (in case there is a need to recover the loan through asset seizures).

The option not considered is high school or college transcript.

Option A.

Answer:

Labor leads to more love when participants successfully completed the task.

Explanation:

The answer is already provided in the question.

Answer:

Explanation:

The journal entry is shown below:

Supplies expense A/c Dr $1,700

                  To Supplies A/c $1,700

(Being supplies account is adjusted)  

The supplies expense is computed below  

= Purchase value of supplies - supplies on hand  at year end

= $2,100 - $400

= $1,700        

For recording, this given transaction we debited the supplies expense account as the remaining balance is transferred to supplies expense and credited the supplies account

Answer:

The correct answer is letter "A": Deciding how they wish to balance the available organizational resources among the different types of projects.

Explanation:

While managing a portfolio system, the governance team has many duties such as assessing the risk the portfolio represents, giving also an overview of all the project management activities and the measure of those projects compared to competitors. How to allocate the company resources for each organizational project of the firm, relies on managers directly.

The responsibilities of the governance team when managing a portfolio system involve tasks such as resource allocation, project prioritization, and progress evaluation.

The responsibility of the governance team when managing a portfolio system involves several tasks, including:

Therefore, the correct answer is C. Evaluating the progress of the projects in the portfolio.

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Answer:

1.33

Explanation:

The size of the multiplier is the one which grounded on the marginal decisions of the household for spend, that is called as the MPC (stands for Marginal Propensity to consume), also referred to as the marginal propensity to save (MPS).

The formula to compute the size of the multiplier is as follows:

Size of multiplier = 1 / MPS

where

MPS is 0.75

So,

Size of multiplier = 1 / 0.75

= 1.33

Information sharing reduces information lead time, enabling each organization to plan according to end demand and not according to the orders placed immediately downstream.

Explanation:

The Bullwhip effect is a trend of the distribution channel where estimates result of inefficiencies in the supply chain. Of reaction to fluctuations the market demand the inventory swings are growing, as the supply chain continues to grow.

The effect of the bullfight generally flows up the supply chain, starting from the retailer, wholesaler, dealer, producer and then the supplier of the raw materials.

This method does not include daily fluctuations to run level. Another way of reducing the bullwhip effect is by eliminating the delays along the supply chain. In general, the fluctuations in the supply chain can be reduced by 80% by cutting order to supply time by half in both real supply chains and supply chain simulations

a) Information sharing reduces information lead time, enabling each organization to plan according to end demand and not according to the orders placed immediately downstream.

Information sharing is crucial in eliminating the bullwhip effect within a supply chain. By reducing information lead time, organizations can better predict actual customer demand rather than reacting to the orders placed by their immediate downstream partners. This helps to eliminate misunderstandings and amplifications of demand variations as information moves upstream. Key benefits include:

Agile and adaptive supply chains that prioritize knowledge-flow can swiftly respond to changes in market and environmental conditions, ultimately aligning interests across the supply chain to optimize overall performance.

Explanation:

Option A: Agent is the mediator who is responsible for answering all questions in the application.

Option B: The clients are not the person who can be taken into account for answering all the question. The client acts according to the agent

Option C: The owner does not have a role to answer question. So he cannot be taken into consideration. This option stands invalid.

Option D: None of these is invalid. Somebody has to be responsible for the said scenario.

The owner is responsible for determining if all of the questions on an application have been answered.

The owner is responsible for determining if all of the questions on an application have been answered.

When an application is submitted, it is the owner's role to review it and ensure that all required questions have been answered. They have the authority to request additional information or clarification if needed.

The agent may assist the owner in reviewing the application, but ultimately, the responsibility lies with the owner.

Answer:

True

Explanation:

If more money is coming into your account as compared to going out then you are in "positive cash flow". This means that you are in a situation where you can easily pay your bills and also save some money which is good.

If less money is coming into your account as compared to going out then you are in "negative cash flow". This means that you are in a situation where it is very diificult for you to cover your bills and you need more money to survive.

To conclude, the statement is true that you can give yourself a raise by increasing the flow of money into your account and decreasing the out flow.

The statement is false. Simply increasing the flow of money into your own account and decreasing the flow out does not guarantee an increase in income.

The statement that you can give yourself a raise by increasing the flow of money into your own account and decreasing the money flowing out is false. Giving yourself a raise typically refers to increasing your income, which generally requires negotiating with your employer or finding additional sources of income. Simply increasing the flow of money into your own account and decreasing the flow out does not guarantee an increase in income.

While managing your finances effectively can contribute to a healthier financial situation, it does not necessarily lead to a raise in the traditional sense. It is important to explore various avenues for increasing your income, such as career advancement, additional education or skills development, or starting a business.

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Answer:

1. Standards

2. Audit and Attest Standards

3. Generally Accepted Accounting Principles (GAAP)

4. Shareholders

Explanation:

1. Financial statements are required to be audited and should be in accordance with all applicable standards followed in the country.

2. AICPA issues, develops and enforces different standards (example code of professional conduct and consulting services standard). Auditing standards board of AICPA pronouncements are also known as Audit and Attest Standards.

3. The standards which are followed in the United States is GAAP Generally Accepted Accounting Principles. It’s a rule based accounting principle which is enforceable in the United States.

4. Audit report is required to be addressed to the Board of Directors and the company shareholders.

Answer:

1. Financial Reporting Framework

2. Statements on Auditing Standards (SASs)

3. Generally Accepted Accounting Principles (GAAP)

4. Shareholders

Explanation:

1. The purpose of an audit conducted in accordance with generally accepted auditing standards is to provide financial statement users with an opinion by the audtor on whether the financial statements are presented fairly in all material respects, in accordance with the applicable Financial Reporting Framework.

2. The serially numbered pronouncements issued by the Auditing Standards Board of the AICPA as generally accepted auditing standards are known as Statements on Auditing Standards (SASs).

3. Investors need to compare financial statements of different companies. The standards most frequently followed to prepare financial statements in the United States are Generally Accepted Accounting Principles (GAAP).

4. Public company audit reports must be addressed to the board of directors and the Shareholders.

Answer:

1. 2.5; 1.2

2. Project A

Explanation:

Given that,

Project 1 requires:

Initial investment = $520,000

Present value of cash flows = $1,300,000

Project 2 requires:

Initial investment = $5,000,000

Present value of cash flows = $6,000,000

1.

Profitability index = Present Value of Cash inflows ÷ Investment

Project A = $1,300,000 ÷ $520,000

                = 2.5

Project B = $6,000,000 ÷ $5,000,000

               = 1.2

2. Project A will be preferred because it has a higher profitability index than project B.

Final answer:

To determine the preferable project for Yokam Company, the profitability index is calculated for both projects. Project 1 has a profitability index of 2.5, and Project 2 has a profitability index of 1.2. Thus, Project 1 is preferable due to its higher profitability index.

Explanation:

The question asks to compute the profitability index for two projects and determine which project Yokam Company should prefer based on this index. The profitability index (PI) is calculated as the present value of cash flows divided by the initial investment.

Based on the profitability index, Yokam Company should prefer Project 1 as it has a higher PI, indicating a greater return per dollar invested.

Answer:

Option (d) is correct.

Explanation:

The opportunity cost refers to the benefit that would be obtained from the next best alternative.

Here, given that

Tuition cost for attending college = $14,000 per year

Room cost = $5,000

Money income could be earned = $26,000

Therefore, the Opportunity cost is as follows:

= $14,000 + $5,000 + $26,000

= $45,000

My choice would be "Coordinating work with customer and other units of the organization".

Explanation:

The given options talk about team work and it purely depends on the responsibility assigned by Team lead to the team under him/her.

Work teams in organizations often assume activities traditionally for managers including selecting new team members, scheduling work, and coordinating with customers and other units. This allows organizations to be more responsive to changes and needs while fostering a better understanding amongst team members and their tasks.

In modern organizations, work teams often take on many of the activities traditionally managed by managers. Among these responsibilities are selecting new team members, scheduling work, and coordinating work with customers and other units within the organization. This shift allows organizations to be more agile and responsive to changes and needs.

Selecting new team members involves assessing candidates for skills and fit within the team's culture. This can often result in a better match than a manager might achieve because the team members understand their needs and dynamics more intimately.

Scheduling work involves planning and ensuring the jobs and tasks within the team are completed in a timely and effective manner. The team can adjust schedules based on their understanding of the tasks, their complexity, and interdependencies.

Coordinating work with customers and other units requires communication and collaboration skills. Teams may be better placed to understand and respond to the needs of customers and other units, as they are closely involved in the actual work.

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Answer:

E. All the statements are correct

Explanation:

i. Corporations rarely pay tax on the interest income.

This statement is correct. Some companies do not even pay any income taxes.

ii. Higher tax bracket people tend to buy municipal bond because it is federal tax exempt.

Correct, people who have high incomes, and are subject to a high federal income tax rate often buy municipal bonds because these bonds are exempt from federal income tax.

iii. Short term capital gain and long-term capital gain are treated differently for individuals.

Correct. Short-term capital gains are those obtained from the sale of property that was owned for less than one year. This gains are often treated with the highest tax rate.

Long-term capital gains are those obtained from the sale of property that was owned for more than one year, and are treated with more favorable tax rates.

iv. The corporate tax rates in the U.S. is one of the lowest among the developed nations.

This statement is correct. The corporate tax rate in the U.S. is a nominal 21% (the effective rate can be as low as 0% for some companies). This is one of the lowest rates among developed nations, whose rates hover around 25 to 30% on average.

Answer:

The correct answer is letter "D": Research and theory are interdependent.

Explanation:

A theory is the conclusion of an idea regarding a certain topic. To support that idea, facts are needed. Those facts are found thanks to research. However, research itself would not have a purpose if the main intention of the study would not be to propose a theory. Thus, both theory and research are interdependent.

Answer:

The effective rate on the loan is 13/18% or 0.722%

Explanation:

36 monthly payments of $700 will give = 700*36=$25200

Amount= $25200

Principal= $20000

Interest= amount - principal

Interest= 25200 -20000

=$5200

Rate= (100* interest)/principal*time

= (100*5200)/(20,000*36)

=13/18 %

= 0.722%

The effective annual rate on the loan is 0.722%

Answer:

debt ratio = 31.67 %

Explanation:

given data

Total Assets = ​$420,000

Total Liabilities ​= 133,000

Total Equity = ​287,000

to find out

debt ratio

solution

we get here debt ratio that is express as

debt ratio  = [tex]\frac{total\ liability}{total\ assets}[/tex] ×  100   ............................1

put here value and we will get

debt ratio = [tex]\frac{133000}{420000}[/tex] ×  100

debt ratio = 0.31666 ×  100  

debt ratio = 31.67 %

The debt ratio of Durable Plastics Company as of December 31 is 31.67%.

The debt ratio is a financial ratio that measures the proportion of a company's total debt to its total assets. It indicates the percentage of a company's assets that are financed by debt. To calculate the debt ratio, divide the total liabilities by the total assets and multiply by 100. In this case, the debt ratio for Durable Plastics Company as of December 31 would be:

Debt Ratio = (Total Liabilities / Total Assets) × 100

Debt Ratio = (133,000 / 420,000) × 100

Debt Ratio = 31.67%

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Answer:

The correct answer is letter "B": Deposit lapping.

Explanation:

Deposit lapping is the fraudulent act in which an individual alters accounts receivables -typically in the form of checks, to cover transactions for cash that has been stolen. The individual takes the following account receivable to cover the theft over and over for as many times as he wishes.

The question involves recording transactions in general ledger accounts, preparing financial statements, and analyzing a company's financial health. Accounting profit is determined by subtracting explicit costs from total revenues. Shareholders invest in a company typically through the purchase of stock, and a bank's net worth can be calculated by subtracting its liabilities from its assets.

The student's question covers several fundamental accounting tasks, including recording transactions, preparing financial statements, and analyzing financial health through ratios. To record the events in the general ledger accounts, each transaction must be categorized and entered according to the principles of double-entry bookkeeping. Subsequently, financial statements such as the income statement, statement of changes in equity, balance sheet, and statement of cash flows can be prepared using the information from the ledger accounts.

For example, to calculate accounting profit, we subtract explicit costs from total revenues. Using the self-check question as a guide:

Accounting profit = total revenues minus explicit costs = $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000.

To address the question about shareholders and company financing:

To create a T-account balance sheet for a bank:

Assets                                  | Liabilities
-----------------------------------------|-------------------
Government Bonds: $70 | Deposits: $400
Loans:                        $500 |                            
Reserves:                    $50  |
-----------------------------------------|-------------------
Net Worth:                              $220

The bank's net worth is calculated as total assets ($70 + $500 + $50) minus liabilities ($400), which equals to $220.

Lastly, it is not possible to directly determine the cash in retained earnings from the information provided without additional context or a complete set of financial statements.

Answer:

Goodwill    35,000 debit

   Investment in Gates      25,000 credit

  Retained Earnings          10,000 credit

--to adjust for change of method--

Explanation:

600,000 x 15% = 90,000

purchased at     105,000

goodwill of 15,000

+ 150,000 x 15% of net income = 22,500

- 50,000 x 15% dividends          =   (7,500)

investment at the end of 2013:

90,000 + 22,500 - 7,500 = 105,000

Then we purchase 25%

105,000 represent 15%

thus 25% would be: 105,000 / 0.15 x 0.25 = 175,000

purchased at 200,000

goodwill of 25,000 to be recognized.

So, equity method will be:

105,000 + 175,000 = 280,000 for the proportional equity

and 15,000 + 25,000 = 35,000 goodwill

Total of 315,000

While fair value will not recognize goodwill. and also, the investment is not modified when dividends and the gain for the year are delcared.

It measure at cost unless the market value of the stock decrease so we got:

105,000 1st purchase + 200,000 2nd purchase = 305,000

To adjust we are going to decrease investment by 25,000 and increase goodwill by 35,000 the other will go into retained earnings to balance out.

To switch from the fair-value method to the equity method, an adjustment is needed for the initial investment in Gates Corporation.

To change from the fair-value method to the equity method, an adjustment needs to be made for the initial investment in Gates Corporation. The fair-value method recognizes changes in the value of the investment each reporting period, while the equity method only recognizes the investor's share of the net income or loss of the investee. Therefore, the adjustment would involve removing any fair-value adjustments made under the fair-value method and recording the initial investment at its original cost.

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Answer:

At the microeconomic level there is confidence in the markets and people increase spending, leaving savings. Officials must demonstrate that they have knowledge of how to handle finances.

Appropriate services must be created in the cities and in this way at the social level, there will be confidence to increase overall spending.

Answer:

The correct option is C.

the plaintiff had no role in causing the harm.

Explanation:

red IPSA loquitur is a Latin word that means 'the things speaks for itself.'

It means a situation that occurred due to negligence

Therefore the right option is c.

The plantiff must demonstrate all but ;

the plaintiff had no role in causing the harm.

Final answer:

In establishing res ipsa loquitur, direct evidence of the defendant's lack of due care is not required. This legal doctrine implies negligence from the nature of the accident or injury, under circumstances indicating that the defendant had control, and it would not have occurred without negligence.

Explanation:

To establish res ipsa loquitur in most states, a plaintiff must demonstrate certain elements. These typically include that the harm would not ordinarily occur without negligence, the plaintiff did not contribute to the cause of the harm, and the defendant had exclusive control of the thing that caused the harm. The one element that is not required for res ipsa loquitur is direct evidence of the defendant's lack of due care because res ipsa loquitur is a doctrine used precisely when there is a lack of direct evidence, and the circumstances of the incident imply negligence.

Therefore, the correct answer is A: direct evidence of the defendant's lack of due care is not necessary to establish res ipsa loquitur.

Answer:

Explanation: Unbiased Expectations Theory states that current long-term interest rates contain an implicit prediction of future short-term interest rates. More specifically, the theory states that an investor should earn the same amount of interest from an investment in a single two-year bond today as that person would with two consecutive investments in one-year bonds.

From the above question:

1 + 1R5= {(1 + 1R4)4(1 + E(5r1))}1/51.0215

= {(1.016)4(1 + E(5r1))}1/5(1.0215)5

= (1.016)4(1 + E(5r1))(1.0215)5 / (1.016)4

= 1 + E(5r1)1 + E(5r1)

= 1.0438E (5r1) = 4.38%

Answer:

Revenues = $47,850

Explanation:

To find the revenue, we have to consider some of the things.

1. Increase in retained earnings: Net income increases retained earnings. To get net income, we need more revenues than expenses.

2. Expenses: As we have expenses, we can find the revenues with the help of retained earnings.

3. Dividends: After deducting the dividends, we can get whether retained earnings increase or decrease.

The following formula can be used -

Beginning retained earnings + Net income (current year) (revenues - expenses) - Dividends = Increase in retained earnings

Putting the value in the formula,

$0 + Revenues - $30,000 - $2,800 = $15,050

or, Revenues - $32,800 = $15,050

or, Revenues = $32,800 + $15,050 = $47,850

Answer:

c. Motivating managers and other employees toward the organization's goals.

Explanation:

Answer:

Part A)  

Consumer price index is an amount of the average variation over time in the amounts paid by customers for a market basket of customer goods and services.

CPI= (Updated Cost/Base Period Cost) x 100

For multiple products, we have to ruminate the weights or proportion of expenditure of an item

CPI2= (P2Red xQ1Red) + (P2grn x Q1grn) / (P1Red xQ1Red) + (P1grn x Q1grn)

CPI2= (2 x 10) + (1x0)/ (1x10) + (2x0)

CPI2= 2

Based on the CPI in year 2, prices have doubled.

Part B)

Nominal expenditure is the total worth of outcome produced or expended in each year.

In year 1 and year 2, Abby buys

Year 1= $1 x 10= $10

Year 2= $1 x 10= $10

So, nominal expenditure remains constant at $10.

Part C)

Real expenditure is the quantity consumed or the basket in the current year calculated at the base year price.

Base year prices: Red $1& Green $2

Real expenditure in year 1  = (P1rQ1r) + (P1gQ1g)

                                               =$1x10 + X2x0

                                               = $10

Real expenditure in year 2  = (P1rQ2r) + (P1gQ2g)

                                       = (1x 0) + (2 x 10)

                                       = $20

So, real expenditure has increased from $10 to $20

Part D).

Implicit value deflator in year 1, it is the base year so it will be continuously 1 as the actual and nominal amounts are equal.

Implicit price deflator in year  = nominal expenditure/real expenditure

Implicit price deflator in year 1 = 10/10

                                                = 1

Implicit price deflator in year2  = 10/20

                                                = 0.5

Thus, the implicit value deflator proposes that prices have dropped by half. The cause for this is that the deflator evaluations how much Abby standards her appeals using prices dominant in year 1.

We can perceive from this perception that the green apples are appreciated more .And when Abby consumes more green apples in year 2, it appears that her consumption has augmented as the price deflator standards green apples more than the red apples.

Part E)

Abby considers that red apples and green apples as perfect alternatives, then the cost of living in this budget has not changed in both year it costs $10 to eat 10 apples.

Permitting to the CPl, however, the cost of living has gathered. This is because it only takes into justification the detail that the red apple price has gathered; the CPl overlooks the fall in the price of green apples as they were not in the consumption package in year 1.

In difference to the CPI, the implicit value deflator approximations the cost of living has shared.

CPI is calculated based on the Laspreyers Index method, where the amount in the numerator is the amount in the base year. Where as in the Passche price index, the numerator is the Recent price calculated for current capacity of consumption.

The Laspeyres index inclines to exaggerate rise (in a cost of living framework), while the Paasche index tends to understate it, because the indices do not account for the fact that consumers typically react to value variations by changing the amounts that they buy. For example, if prices go up for good X then, at ceteris paribus, amounts of that good should go downcast.

a) The consumer price index (CPI) for apples is 100 in Year 1 and 200 in Year 2.

b) Abby’s nominal spending on apples is $10 in both Year 1 and Year 2.

c) Abby’s real spending on apples is $10 in Year 1 and $5 in Year 2.

d) The implicit price deflator is 1 in Year 1 and 2 in Year 2.

Let's go through each part of the problem with detailed step-by-step calculations.

Part (a): Compute a Consumer Price Index (CPI) for Apples

Year 1 (Base Year):

- Red apples: $1 each

- Green apples: $2 each

- Abby buys 10 red apples.

Cost of the basket in Year 1:

[tex]\[ \text{Cost}_{\text{Year 1}} = 10 \times 1 = \$10 \][/tex]

Year 2:

- Red apples: $2 each

- Green apples: $1 each

To calculate the CPI, we use the same basket as in Year 1 (10 red apples):

[tex]\[ \text{Cost}_{\text{Year 2}} = 10 \times 2 = \$20 \][/tex]

CPI Calculation:

[tex]\[ \text{CPI in Year 1} = \frac{\text{Cost of basket in Year 1}}{\text{Cost of basket in Year 1}} \times 100 = \frac{10}{10} \times 100 = 100 \][/tex]

[tex]\[ \text{CPI in Year 2} = \frac{\text{Cost of basket in Year 2}}{\text{Cost of basket in Year 1}} \times 100 = \frac{20}{10} \times 100 = 200 \][/tex]

Part (b): Compute Abby’s Nominal Spending on Apples

Year 1:

[tex]\[ \text{Nominal Spending in Year 1} = 10 \times 1 = \$10 \][/tex]

Year 2:

[tex]\[ \text{Nominal Spending in Year 2} = 10 \times 1 = \$10 \][/tex]

Part (c): Compute Abby’s Real Spending on Apples (Using Year 1 as the Base Year)

Year 1:

[tex]\[ \text{Real Spending in Year 1} = \text{Nominal Spending in Year 1} = \$10 \][/tex]

Year 2:

[tex]\[ \text{Real Spending in Year 2} = \frac{\text{Nominal Spending in Year 2}}{\text{CPI in Year 2}} \times 100 \][/tex]

[tex]\[ \text{Real Spending in Year 2} = \frac{10}{200} \times 100 = \$5 \][/tex]

Part (d): Compute the Implicit Price Deflator

Year 1:

Deflator in Year 1 =Nominal Spending in Year 1 / Real Spending in Year 1 = 10/10 = 1

Year 2:

Deflator in Year 1 =Nominal Spending in Year 2 / Real Spending in Year 2 = 10/5 = 2

Summary

1. CPI Calculation:

  - CPI in Year 1: 100

  - CPI in Year 2: 200

2. Nominal Spending:

  - Nominal Spending in Year 1: $10

  - Nominal Spending in Year 2: $10

3. Real Spending:

  - Real Spending in Year 1: $10

  - Real Spending in Year 2: $5

4. Implicit Price Deflator:

  - Deflator in Year 1: 1

  - Deflator in Year 2: 2

From Year 1 to Year 2, the CPI for apples increases from 100 to 200, Abby’s nominal spending remains constant at $10, her real spending decreases from $10 to $5, and the implicit price deflator increases from 1 to 2.

Complete question : Abby consumes only apples. In year 1, red apples cost $1 each, green apples cost $2 each, and Abby buys 10 red apples. In year 2, red apples cost $2, green apples cost $1, and Abby buys 10 green apples. a) Compute a consumer price index for apples for each year. Assume that year 1 is the base year in which the consumer basket is fixed. How does your index change from year 1 to year 2? b) Compute Abby’s nominal spending on apples in each year. How does it change from year 1 to year 2? c) Using year 1 as the base year, compute Abby’s real spending on apples in each year. How does it change from year 1 to year 2? d) Defining the implicit price deflator as nominal spending divided by real spending, compute the deflator for each year. How does the deflator change from year 1 to year 2?