The government has the ability to influence the level of output in the short run using monetary and fiscal policy. there is some disagreement as to whether the government should attempt to stabilize the economy.

1. which of the following are arguments in favor of active stabilization policy by the government? check all that apply.

a. shifts in aggregate demand are often the result of waves of pessimism or optimism among consumers and businesses.
b. changes in government purchases and taxation must be passed by both houses of congress and signed by the president.
c. businesses make investment plans many months in advance.
d. the current tax system acts as an automatic stabilizer.

2. which of the following are examples of automatic stabilizers? check all that apply.

a. corporate income taxes
b. the discount rate
c. personal income taxes

Cardinal company is considering a project that would require a $2,725,000 investment in equipment with a useful life of five years. at the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. the company’s discount rate is 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)