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Economics, Accounting & Business: Post your doubts here!

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how have they apportioned the insurance expense in Q.3 and why have they used retained earnings for bonus issue( they've deducted it from retained earnings in the mark scheme) in Q.1. a) instead of using share premium account????
 

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how have they apportioned the insurance expense in Q.3 and why have they used retained earnings for bonus issue( they've deducted it from retained earnings in the mark scheme) in Q.1. a) instead of using share premium account????
do u mean q2?
 
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how have they apportioned the insurance expense in Q.3 and why have they used retained earnings for bonus issue( they've deducted it from retained earnings in the mark scheme) in Q.1. a) instead of using share premium account????
we normally use the retained earnings for bonus issue

make an insurance account

the ending part of the scan isnt visible sorry
it is
2000-12
X -3
2000*3/12=500
 

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Q17 - Answer is C because: Equilibrium level of income is where GDP/GNP = C+I+G+(X-M)
Therefore what you do is, add everything except GNP for all 3 years, minus it with the GNP value given, and if the answer is minus it means that X<M = Deficit. Hence, BOP Deficit.
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Q19 - Answer is B - Because in the short run, prices of all factor inputs are fixed.

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Q 30 C because in slump there will be Budget Deficit hence increase taxes to make it balanced budget
and lower taxes in boom because in boom there will be more revenue and less expenditure so lowering taxes will decrease govt revenue and maintainin balanced budget
 
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upload_2014-4-19_16-46-5.png
how is the answer C - when i do for sales adjusting for cost i get 76800 but it should be 72000 .. o_O??
 
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Q21 - Answer is D. This is just a matter of substituting formulas.
Since its a closed economy, Y = C + I
The formula for C is what they hav given = 30 + 0.8Y
I = 50
Jus substitute them into Y = C + I
Which will be Y = (30+0.8Y) + 50
Solve that and you will get Y = 400
Q22 - Its A. Because, Bond prices and interest rates go in opposite directions. Therefore, When interest falls, people will hold more idle balances as returns on speculative transactions is lower.
Q23 - Its C. Because, Advances in technology causes investment to rise. When investments rise, demand for loans rise, hence, the demand increases..
A reduction in marginal propensity to save means people will be saving less, as a result of which banks will now have less money to lend, hence the supply falls.
Q25 - Its C because as spending in an economy rises due to expansionary fiscal policy, a fixed money supply would mean that the increase in demand for money from the increased spending exceeds the supply of money available in the economy hence interest rates rise, which is a contractionary monetary policy itself which results in the expansionary policy being rather ineffective.
 
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