Suppose the federal government increases spending without also increasing taxes In a closed economy' setting this policy will (1) - short run. - real GDP and (2) — - the price level in the In an open economy setting, the effect of government fiscal policies will (3) - . For example, in an open economy, expansionary fiscal policies affect interest rates and also exchange rates in the same direction and the changes in the latter create a (4) - crowding out effect 1: Define Closed economy An economy that has no interactions in trade or finance with other countries. 2: Define Open economy An economy that has interactions in trade or finance with other countries. (1) reduce increase not affect (2) not affect O raise Olower (3) remain intact be dampened be amplified (4) similar smaller larger

Kandon enterprises, inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. both divisions are considered separate components as defined by generally accepted accounting principles. the horse division has been unprofitable, and on november 15, 2018, kandon adopted a formal plan to sell the division. the sale was completed on april 30, 2019. at december 31, 2018, the component was considered held for sale. on december 31, 2018, the company’s fiscal year-end, the book value of the assets of the horse division was $415,000. on that date, the fair value of the assets, less costs to sell, was $350,000. the before-tax loss from operations of the division for the year was $290,000. the company’s effective tax rate is 40%. the after-tax income from continuing operations for 2018 was $550,000. required: 1. prepare a partial income statement for 2018 beginning with income from continuing operations. ignore eps disclosures. 2. prepare a partial income statement for 2018 beginning with income from continuing operations. assuming that the estimated net fair value of the horse division’s assets was $700,000, instead of $350,000. ignore eps disclosures.