Q1 TRUE OR FALSE Part of implementing fiscal policy is setting tax rates and tax

Question

Q1 TRUE OR FALSE Part of implementing fiscal policy is setting tax rates and tax policy. Q2 TRUE OR FALSE Changing the Reserve Rate and the Discount Rate are examples of monetary policy tools in action. Q3 TRUE OR FALSE Construction equipment tends to be in high demand when an economy is expanding and in low demand when an economy is contracting. Q4 TR. UE OR FALSE Employment numbers often follow the direction of the general economy with a lag. Q5 TRUE OR FALSE Stock markets indices are used as a leading indicator of the direction of the economy P1. (5 points) Webbing Inc. Web Expanders have serious competition. Rather than selling for S200 each, the company has cut the price to S150. Webbing still has total fixed costs of 31,200,000 but the company has also seen an increase in variable costs to 80% of sales. Webbing still has a corporate tax rate of 30%. Product demand is uncertain, and the firm is unsure as to how many Web Expanders it will sell in the next quarter. How many Web Expanders must they sell in the next quarter to breakeven? Breakeven Quantity

Explanation / Answer

Q1. True

Taxation is part of Fiscal Policy of government.

Q2. True.

Both Reserve rate and Discount Rate are part of the Monetary policy of Government.

Q3. True

When economy is expanding more construction work will be undertaken because of expansion and vice versa.

Q4. True.

Q5. True

Stock Market indices is one of the leading indicator of the direction of economy.

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