Business Fluctuations: Work It Out 3 of 3 From the equation of exchange, M V = P Y , we know that spending growth ( −→ M + → v ) equals inflation π + Real growth. Recall from the chapter that in the long run (1) the inflation rate is found where the AD curve intersects the LRAS curve (reading off the vertical axis) and (2) the expected inflation rate is found where the short-run aggregate supply curve intersects the LRAS curve. With these things in mind, assume that the Solow growth rate is 3%. If spending growth equals 4%, what will π equal in the long run? What will E π equal?

Insurance companies have internal controls in place to protect assets, monitor the accuracy of accounting records and encourage operational efficiencies and adherence to policies. these internal controls are generally of two types: administrative controls and accounting controls. administrative controls are the policies and procedures that guide the daily actions of employees. accounting controls are the policies and procedures that delineate authorizations of financial transactions that are done, safeguard assets, and provide reports on the company’s financial status in a reliable and timely manner. internal controls should include both preventative and detective controls. the purpose of preventative controls is to stop problems and errors before they occur. detective controls identify problems after they have occurred. preventative controls are usually more effective at reducing problems, but they also tend to be more expensive. internal controls must be flexible to adjust for changes in laws and regulations in addition to adding new products or modifying current ones. companies must also do regular analyses to ensure that the benefits of implementing the controls are worth their costs. when concerned about paying unwarranted insurance claims which type of control would be useful?

Moody corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. at the beginning of the year, the company made the following estimates: machine-hours required to support estimated production 100,000 fixed manufacturing overhead cost $ 650,000 variable manufacturing overhead cost per machine-hour $ 3.00 required: 1. compute the plantwide predetermined overhead rate. 2. during the year, job 400 was started and completed. the following information was available with respect to this job: direct materials $ 450 direct labor cost $ 210 machine-hours used 40

When many scrum teams are working on the same product, should all of their increments be integrated every sprint?