The diagram depicts a consumption function of an economy, discussion help

Content Type

User Generated

User

Nyrknaqen482

Subject

Economics

Description

The diagram depicts a consumption function of an economy, where C is the aggregate consumption spending, Y is the current income of the economy and c0 is the fixed (or autonomous) consumption such that c0 > 0. Assume that households that are not credit-constrained would completely smooth their consumption. Which of the following statements is correct?

A. If all households were not credit-constrained, and all income changes were perceived temporary, then the aggregate consumption line would be horizontal.
B. In times of credit crunch when the banks become less willing to lend, the aggregate consumption line would become flatter.
C. If a higher proportion of households have "weakness of will", then the aggregate consumption line would be flatter.
D. If the current income falls to zero, there will be zero consumption.

Feedback: In a credit crunch more households would become credit-constrained. Therefore the line would become steeper.

“Weakness of will” means that when there is an expected fall in the income, the households are less likely to adjust their consumption ahead of the fall, in order to build up some savings so that they can smooth consumption. In this case their marginal propensity to consume would be higher, implying a steeper aggregate consumption line.

c0 > 0 means that even if the current income is zero, the households will consume a strictly positive amount.

Question 2 of 15

0.0/ 1.0 Points

If the multiplier during a recession is equal to 2, then if the government wants to increase GDP by $500 billion it should increase spending by:

A. $100 billion.
B. $200 billion.
C. $250 billion
D. $1 trillion

Feedback: The multiplier increases the initial spending by the government (or consumers or businesses) by increasing spending and therefore income in the economy.

Question 3 of 15

0.0/ 1.0 Points

Assuming that there is no government spending or trade, an economy’s aggregate demand is given by its domestic consumption C and investment I, AD = C + I = c₀ + c₁Y + I.

In the economy’s goods market equilibrium this equals its output: AD = Y. Solving for Y this yields:

Y = [1/(1-c₁)] (c₀+ I)

Given this equation, which of the following statements is correct?

A. The multiplier is given by 1 – c₁.
B. The boost in the economy’s output is the same whether the aggregate demand shock comes from an increase in investment I or in autonomous consumption c₀.
C. The larger the marginal propensity to consume c₁, the smaller the multiplier.
D. If c₁ = 1/3, then a £1 million increase in investment would result in a £2 million increase in the output.

Feedback:

The multiplier is given by 1 / (1 – c₁).

Larger c₁ means smaller 1 – c₁, which in turn means larger multiplier 1 / (1 – c₁).

When c₁ = 1/3 then 1 / (1 – c₁) = 1.5, and therefore a £1 million increase in I would result in a 1.5 million increase in Y.

Question 4 of 15

1.0/ 1.0 Points

Assume that in France and Germany, it is not possible for a household to increase its borrowing based on an increase in the market value of their house. In addition, a large down-payment (as a per cent of the house price) is required for house purchase. On the basis of this information, which of the following statements is correct when there is a rise in the house price?

A. There is a positive financial accelerator effect for the existing homeowners who are credit-constrained.
B. Would-be homeowners would increase saving, leading to their reduced consumption.
C. A rise in the house price leads to an increase in human capital.
D. A rise in the house price is likely to lead to an increase in consumption in France and Germany.

Feedback: Correct

Question 5 of 15

1.0/ 1.0 Points

In the US and the UK, loans are widely available based on a rise in home equity. Additionally, unlike in France and Germany where large downpayments (as a percentage of the house price) are required, in the US and the UK only small downpayments are required for house purchases. On the basis of this information, which of the following statements is correct for the US and the UK when there is a rise in the house price?

A. There is a positive financial accelerator effect for the existing homeowners who are credit-constrained.
B. There would be no effect on the consumption of the existing homeowners who are not credit-constrained.
C. Would-be homeowners would increase saving and reduce their consumption more than they would in France and Germany.
D. A rise in house price is likely to dampen consumption in the US and the UK.

Feedback: Correct

Question 6 of 15

0.0/ 1.0 Points

Which of the following statements is correct regarding the multiplier?

A. If two countries were identical except for the share of credit-constrained households, then the country with the higher share would have a smaller multiplier.
B. The multiplier is constant over a business cycle.
C. An increase in export leads to a higher multiplier.
D. Taxation and imports are “leakages” from the circular flow of income, which contributes to lowering of the multiplier.

Feedback: A higher share of credit-constrained households means higher marginal propensity to consume. Therefore the multiplier will be larger.

The proportion of credit-constrained households would vary over a business cycle. The multiplier would therefore vary accordingly.

The multiplier in an open economy depends on the marginal propensity to consume, the marginal propensity to import and the income tax rate. The level of export does not affect the multiplier (it affects the level of the aggregate demand curve, but not the slope).

Question 7 of 15

0.0/ 1.0 Points

Given that imports represent a "leakage" out of the economy and reduce the multiplier, if the following countries have the given rates of Imports/GDP which is likely to have the largest multiplier (assuming all else is the same):

Country	Imports/GDP
Belgium	82.1
Canada	33.4
Denmark	46.6
Ireland	96.7
Netherlands	71.4

A. Belgium
B. Canada
C. Ireland
D. Netherlands

Feedback: Higher imports mean less of the money is spent on domestic production and so "escapes" the economy.

Question 8 of 15

0.0/ 1.0 Points

Which of the following statements is correct regarding fiscal policy?

A. Expansionary fiscal policy (e.g. increasing the government deficit or reducing the surplus) always has a stabilizing effect for the economy.
B. Unemployment benefits and taxes automatically increase government spending and cut taxation in a downturn, while they trim spending and raise taxes in a boom. These are, therefore, automatic stabilizers.
C. In a recession the aim of a government fiscal expansion is to over-ride the effects of automatic stabilizers.
D. As a family worried about mounting debts should cut spending and save more, so should an economy adopt austerity measures when its debt level is high to restore its public finances to balance.

Feedback: During a boom an expansionary fiscal policy may be destabilizing.

In a recession the government would use fiscal expansion to enhance the effects of automatic stabilizers.

This is the paradox of thrift; if everyone stops consuming then that creates further unemployment, causing a vicious cycle.

Part 2 of 2 - Chapter 14 0.0/ 7.0 Points

Question 9 of 15

0.0/ 1.0 Points

Which of the following statements is correct regarding inflation and deflation?

A. Borrowers benefit from deflation as the value of their debt decreases in real terms.
B. Inflation transfers wealth from lenders to borrowers.
C. Falling prices benefit consumers and are therefore always good for the economy.
D. Inflation makes it difficult for consumers and firms to attain the message about scarcity of resources (sent by relative prices) and is therefore always bad for the economy.

Feedback: Deflation increases the real value of nominal debts. This is undesirable for borrowers.

Falling prices certainly benefit consumers who have constant nominal income. However if they postpone consumption in expectation of further price falls (particularly of durable goods such as cars) then this leads to a fall in aggregate demand for the economy, which could lead to more deflation.

It is true that in cases of high and volatile inflation it is hard to separate relative prices changes from the noise of erratically rising prices. However, under mild inflation adjustments in economic activities can take place without losers experiencing falling nominal wages, which is beneficial to the economy (“greasing the wheels of the labour market”).

Question 10 of 15

0.0/ 1.0 Points

Consider a scenario where the Bank of England views the UK economy to be overheating and is attempting to slow the economy down using monetary policy. Which of the following statements is correct regarding the effects of an interest rate rise?

A. It leads to higher bond prices, which result in higher demand for UK bonds.
B. It leads to higher demand for GBP, which results in an appreciation of GBP.
C. It leads to the UK exports becoming cheaper and imports becoming more expensive.
D. It has opposing effects to the UK’s aggregate demand (AD) of discouraging investment, which lowers AD, and cheaper imports, which boosts AD.

Feedback: An interest rate rise does lead to higher demand for UK bonds, but due to their lower prices.

Higher interest rate leads to lower bond prices, resulting in higher demand for UK bonds. This in turn leads to GBP appreciation, making UK imports cheaper and exports more expensive, which depresses aggregate demand in the UK.

Cheaper imports mean higher leakage. This reduces aggregate demand.

Question 11 of 15

0.0/ 1.0 Points

The diagram depicts the Phillips curve and the indifference curves of an economy. This economy has an independent central bank with an inflation target of 2%. Based on this information, which of the following statements is correct?

A. The central bank will try to achieve zero unemployment while keeping the inflation at 2%.
B. The shape of the indifference curves indicates that the central bank is willing to trade higher inflation with lower unemployment at all times.
C. Consider an aggregate demand shock that increases unemployment. Without monetary or fiscal policy to counter the negative bargaining gap, the Phillips curve would shift down.
D. Consider an aggregate demand shock that increases unemployment. The central bank would raise the interest rate to put downward pressure on inflation, in order to bring it back to the target rate.

Feedback: The Phillips curve means that this is not achievable. The inflation-stabilizing unemployment rate is shown to be 6%: this is the outcome of the wage and profit curves.

This is true in the upward-sloping parts of the indifference curves. Where the indifference curves are downward-sloping (e.g. when unemployment is higher than 6% and the inflation is lower than 2%), the trade-off is between higher unemployment and higher inflation.

For an aggregate demand shock that increases unemployment, inflation will fall below the target along the Phillips curve. Therefore the central bank should lower interest rate to put upward pressure on inflation, in order to bring it back up to the target rate.

Question 12 of 15

0.0/ 1.0 Points

The book gives an analogy of an economy experiencing disinflation as similar to a car that is:

A. Speeding up.
B. Going in reverse.
C. Stopped.
D. Slowing down but still going forward.

Feedback: Disinflation is not the same as deflation (negative inflation), so inflation is still generally positive.

Question 13 of 15

0.0/ 1.0 Points

In data for the United States, the Phillips Curve:

A. Shows a very close relationship between the unemployment rate and inflation.
B. Shows a varying relationship between the unemployment rate and inflation that seems to have broken down in the late 1970s and 1980s.
C. Shows no relationship between the unemployment rate and inflation.
D. Shows a relationship in which inflation usually increases as the same time as the unemployment rate.

Feedback: Check out Figure 14.6 in section 14.5 showing data from the U.S> from 1960s to 2010s.

Question 14 of 15

0.0/ 1.0 Points

When an economy expects positive inflation, the Phillips Curve shifts up and actual inflation is:

A. Always equal to expected inflation.
B. Always equal to the bargaining gap.
C. Equal to expected inflation plus the bargaining gap.
D. Equal to expected inflation minus the bargaining gap.

Feedback: Remember, if firms and workers expect inflation, they will build that in to their wage demands and prices. But they still have to contend with the business cycle which means they may not be at the labor market equilibrium.

Question 15 of 15

0.0/ 1.0 Points

Monetary policy can affect aggregate demand and inflation through all of the following channels EXCEPT:

A. The exchange rate
B. Residential investment
C. Expectations/confidence
D. Taxes and government spending

Tags: ECON Micro Macro

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

sorry for the late, I have fixed the answer for you

The diagram depicts a consumption function of an economy, where C is
the aggregate consumption spending, Y is the current income of the economy and c0 is
the fixed (or autonomous) consumption such that c0 > 0. Assume that households that
are not credit-constrained would completely smooth their consumption. Which of the
f o l l o w i n g
s t a t e m e n t s
i s
c o r r e c t ?
Question 1 of 15

A. If all households were not credit-constrained, and all income
changes were perceived temporary, then the aggregate consumption line would be
horizontal.
B. In times of credit crunch when the banks become less willing to lend,
the aggregate consumption line would become flatter.
C. If a higher proportion of households have "weakness of will", then
the aggregate consumption line would be flatter.
D. If the current income falls to zero, there will be zero consumption.

Feedback: In a credit crunch more households would become creditconstrained. Therefore the line would become steeper.
“Weakness of will” means that when there is an expected fall in the
income, the households are less likely to adjust their consumption
ahead of the fall, in order to build up some savings so that they can
smooth consumption. In this case their marginal propensity to
consume would be higher, implying a steeper aggregate
consumption line.
c0 > 0 means that even if the current income is zero, the
households will consume a strictly positive amount.
Question 2 of 15

0.0/ 1.0 Points

If the multiplier during a recession is equal to 2, then if the government wants to
increase GDP by $500 billion it should increase spending by:

A. $100 billion.
B. $200 billion.
C. $250 billion

D. $1 trillion
Feedback: The multiplier increases the initial spending by the government (or
consumers or businesses) by increasing spending and therefore income in the economy.
Question 3 of 15

0.0/ 1.0 Points

Assuming that there is no government spending or trade, an economy’s aggregate
demand is given by its domestic consumption C and investment I, AD = C + I = c0 + c1Y
+ I.
In the economy’s goods market equilibrium this equals its output: AD = Y. Solving for
Y this yields:
Y = [1/(1-c1)] (c0+ I)
Given this equation, which of the following statements is correct?
A. The multiplier is given by 1 – c1.
B. The boost in the economy’s output is the same whether the
aggregate demand shock comes from an increase in investment I or in
autonomous consumption c0.
C. The larger the marginal propensity to consume c1, the smaller the
multiplier.
D. If c1 = 1...

Completion Status:

100%

Review

Review

Anonymous

Excellent resource! Really helped me get the gist of things.

Studypool

4.7

Trustpilot

4.5

Sitejabber

4.4

24/7 Homework Help

Stuck on a homework question? Our verified tutors can answer all questions, from basic math to advanced rocket science!

FIN 414 Saudi Electronic University Challenges Real Estate Investor Face Discussion

FIN 414 Saudi Electronic University Challenges Real Estate Investor Face Discussion

American Public University System Threat of Substitute Products Economics Essay

Complete your Research Project 2 in a Word document, APA formatted, and then submit it in the Assignment section of the cl ...

American Public University System Threat of Substitute Products Economics Essay

Complete your Research Project 2 in a Word document, APA formatted, and then submit it in the Assignment section of the classroom by midnight, EST, Day 7. The instructions concerning this assignment as well as the grading rubric are reproduced below. In 2009 the American auto industry was in a dire economic state. Chrysler was in Chapter 11, GM was on the brink of bankruptcy, and Ford's future was at best uncertain. The demise of the U.S. auto industry would have a devastating impact on our national economy and specifically the economies of Michigan and Ohio. Economists occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position. According to Porter, his model should be used at the industry level, defined as a marketplace in which similar or closely related products or services are marketed. This research paper requires the application of Porter's Five Forces Model to the auto industry. Porter's analytical framework consists of those forces that affect a producer's ability to serve its customers and make a profit. A change in any of these five forces requires a re-assessment of the marketplace. The five forces include: 1) The threat of substitute products: The existence of close substitute products (i.e., high elasticity of demand) increases the propensity of customers to switch to alternatives in response to price increases. 2) The threat of the entry of new competitors: Unless there are significant barriers to entry, profitable markets that yield high returns will attract firms (i.e., perfect competition), effectively decreasing profitability. 3) The intensity of competitive rivalry: As in the case of oligopoly markets, rivals may choose to compete aggressively, non-aggressively or in non-price dimensions. 4) The bargaining power of customers: The ability of customers to put the firm under pressure due to availability of existing substitute products, buyer price sensitivity, uniqueness of the products, etc. 5) The bargaining power of suppliers: The cost of factors of production (e.g. labor, raw materials, components, and services such as expertise) provided by suppliers can have a significant impact on a company's profitability. As such suppliers may refuse to work with the firm or charge excessively high prices for unique resources. References Porter, M.E. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979. Porter, M.E. (1980) "Competitive Strategy", The Free Press, New York, 1980. Porter, M.E. (1985) "Competitive Advantage", The Free Press, New York, 1985. Develop a detailed paper applying Porter's Five Forces Model to the American automotive industry, with a focus on the U.S. market. Your paper needs to include at least three scholarly sources, i.e. peer reviewed articles. I strongly recommend the use of the APUS library for these sources, as most acceptable resources can only be found in protected databases.

SAC The Market Structure of Perfect Competition Discussion

200 words minimum, please don't include citationsThe market structure of perfect competition has a lot of ideal qualities� ...

SAC The Market Structure of Perfect Competition Discussion

200 words minimum, please don't include citationsThe market structure of perfect competition has a lot of ideal qualities–hence the name perfect. For example, perfectly competitive firms are productively efficient, and perfectly competitive markets are allocatively efficient. It is, however, difficult to find many examples of perfectly competition in the real world. Perfect competition is really a benchmark against which we compare other market structures in the real world.How much actual competition occurs in perfectly competitive markets? Some make the claim that there is actually no competition between firms in a perfectly competitive market.Do you agree or disagree with this claim? What is your reasoning?

MSUB Trade Similarities and Differences Between Colombia Indonesia & Taiwan PPT

In the response, please identify similarities and differences between my project country which is Colombia for coffee expo ...

MSUB Trade Similarities and Differences Between Colombia Indonesia & Taiwan PPT

In the response, please identify similarities and differences between my project country which is Colombia for coffee export to the U.S and those three other project, and three other countries trade with U.S. Comment on what you learned about those countries’ trade relationships. only use what stated on these PowerPoints, please don't use outside sources. the infos should be about "2 minuets presentation."

FIN 307 Grantham University Preparing Pro Forma Statements Questions

Discuss the simplified procedures used to prepare and evaluate the pro forma income statement and the pro form ...

FIN 307 Grantham University Preparing Pro Forma Statements Questions

Discuss the simplified procedures used to prepare and evaluate the pro forma income statement and the pro forma balance sheet. What ethical issues do you believe are present in these procedures and how does the SOX Act address these concerns? In your response, you should also discuss the judgmental approach. Prompt #2 Simplified approaches for preparing pro forma statements assume that the firm’s past financial condition is an accurate indicator of the future. There are several examples from the past where organizations were not accurately reporting their financial information. Discuss the relationship between the external auditor and the organization. What steps have been taken to ensure that the relationship is truly neutral and no bias is shown by the external auditing firm?

The Role and Impact of the Health Insurance Market (Paper)

Over the years, the health insurance market has become more competitive and, as a result, consumers “…have been offere ...

The Role and Impact of the Health Insurance Market (Paper)

Over the years, the health insurance market has become more competitive and, as a result, consumers “…have been offered a greater choice in benefits, cost-sharing arrangements, premiums to match their own experience, and types of insurance products” (Feldstein, 2012, p. 242).For this assignment, prepare an economic analysis brief that describes the role and impact of the health insurance market in the U.S. healthcare industry to demonstrate an understanding of Module 4. Discuss and synthesize key elements from at least two recent scholarly articles (found in the CSU-Global Library) that address one of the following points:Determine the performance of the health insurance industry.Apply economic models, theories, or assumptions.Offer objective methods for attempting to predict future market behavior in response to events, trends, and cycles.Assess economic policy recommendations for healthcare stakeholders.Your analysis should be thoughtful and thorough, well written, and formatted as follows:Title pageIntroduction – What is the topic, why is it important, and what are the objectives of your brief?Body – What are the key elements of the scholarly articles that support the objectives of your brief? What economic models or concepts apply?Conclusion – What are the future implications, policy recommendations, etc.? Reference page.Your paper should be 2 to 3 pages (not including the required title and references pages) in length and conform to CSU-Global Guide to Writing and APA.

Similar Content

Please read article and answer the question below?

Read the following article and answer the question below:For Ailing Health System, a Diagnosis but No CureBY DAVID M. HERS...

solving with cash flow diagrams and finance calculator, five buttons n, I , PV, PMT, FV

Solve the following problems from the back of our fifth chapter:5-35-135-225-395-59And this additional problem...An anonym...

Is this an economic impact of unemployment on the individual?

Basically I'm not sure if my current answer to this question is acceptable. My answer is "Lower standard of living due to ...

ECON 205 St Cloud State University The Great Crash of 1929 Video Review Paper

Review the video titled "The Great Crash of 1929" at the link below and upload your reaction report to this assignment box...

effectiveness of counter cyclical policies, economics homework help

This assignment addresses how both monetary and fiscal policies have been used during the so-called Great Recession, which...

ECONOMICS Graphing/Fill in the Blank Questions

FOR FILL-IN-THE-BLANK questions: None of your answers will have decimals. Some of your answers may be negative. For exampl...

The dollar is unquestionably one of the most popular currencies currently in use today used. Although there are other stro...

Agricultural Economics

The last month of 2013 witnessed a series of events at Bali, Indonesia, after the WTO held serious discussions with all it...

Q 2 Ratios For 3 Companies Selected

Related Tags

social powerpoint multinational units online assignment exchange models small business microeconomics the constitution economics Unemployment physics problems consumption funtion

Homework help

Our tutors provide high quality explanations & answers.

Post question

FIN 414 Saudi Electronic University Challenges Real Estate Investor Face Discussion

FIN 414 Saudi Electronic University Challenges Real Estate Investor Face Discussion

American Public University System Threat of Substitute Products Economics Essay

Complete your Research Project 2 in a Word document, APA formatted, and then submit it in the Assignment section of the cl ...

American Public University System Threat of Substitute Products Economics Essay

Complete your Research Project 2 in a Word document, APA formatted, and then submit it in the Assignment section of the classroom by midnight, EST, Day 7. The instructions concerning this assignment as well as the grading rubric are reproduced below. In 2009 the American auto industry was in a dire economic state. Chrysler was in Chapter 11, GM was on the brink of bankruptcy, and Ford's future was at best uncertain. The demise of the U.S. auto industry would have a devastating impact on our national economy and specifically the economies of Michigan and Ohio. Economists occasionally use Porter's five forces framework when making a qualitative evaluation of a firm's strategic position. According to Porter, his model should be used at the industry level, defined as a marketplace in which similar or closely related products or services are marketed. This research paper requires the application of Porter's Five Forces Model to the auto industry. Porter's analytical framework consists of those forces that affect a producer's ability to serve its customers and make a profit. A change in any of these five forces requires a re-assessment of the marketplace. The five forces include: 1) The threat of substitute products: The existence of close substitute products (i.e., high elasticity of demand) increases the propensity of customers to switch to alternatives in response to price increases. 2) The threat of the entry of new competitors: Unless there are significant barriers to entry, profitable markets that yield high returns will attract firms (i.e., perfect competition), effectively decreasing profitability. 3) The intensity of competitive rivalry: As in the case of oligopoly markets, rivals may choose to compete aggressively, non-aggressively or in non-price dimensions. 4) The bargaining power of customers: The ability of customers to put the firm under pressure due to availability of existing substitute products, buyer price sensitivity, uniqueness of the products, etc. 5) The bargaining power of suppliers: The cost of factors of production (e.g. labor, raw materials, components, and services such as expertise) provided by suppliers can have a significant impact on a company's profitability. As such suppliers may refuse to work with the firm or charge excessively high prices for unique resources. References Porter, M.E. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979. Porter, M.E. (1980) "Competitive Strategy", The Free Press, New York, 1980. Porter, M.E. (1985) "Competitive Advantage", The Free Press, New York, 1985. Develop a detailed paper applying Porter's Five Forces Model to the American automotive industry, with a focus on the U.S. market. Your paper needs to include at least three scholarly sources, i.e. peer reviewed articles. I strongly recommend the use of the APUS library for these sources, as most acceptable resources can only be found in protected databases.

SAC The Market Structure of Perfect Competition Discussion

200 words minimum, please don't include citationsThe market structure of perfect competition has a lot of ideal qualities� ...

SAC The Market Structure of Perfect Competition Discussion

200 words minimum, please don't include citationsThe market structure of perfect competition has a lot of ideal qualities–hence the name perfect. For example, perfectly competitive firms are productively efficient, and perfectly competitive markets are allocatively efficient. It is, however, difficult to find many examples of perfectly competition in the real world. Perfect competition is really a benchmark against which we compare other market structures in the real world.How much actual competition occurs in perfectly competitive markets? Some make the claim that there is actually no competition between firms in a perfectly competitive market.Do you agree or disagree with this claim? What is your reasoning?

MSUB Trade Similarities and Differences Between Colombia Indonesia & Taiwan PPT

In the response, please identify similarities and differences between my project country which is Colombia for coffee expo ...

MSUB Trade Similarities and Differences Between Colombia Indonesia & Taiwan PPT

In the response, please identify similarities and differences between my project country which is Colombia for coffee export to the U.S and those three other project, and three other countries trade with U.S. Comment on what you learned about those countries’ trade relationships. only use what stated on these PowerPoints, please don't use outside sources. the infos should be about "2 minuets presentation."

FIN 307 Grantham University Preparing Pro Forma Statements Questions

Discuss the simplified procedures used to prepare and evaluate the pro forma income statement and the pro form ...

FIN 307 Grantham University Preparing Pro Forma Statements Questions

Discuss the simplified procedures used to prepare and evaluate the pro forma income statement and the pro forma balance sheet. What ethical issues do you believe are present in these procedures and how does the SOX Act address these concerns? In your response, you should also discuss the judgmental approach. Prompt #2 Simplified approaches for preparing pro forma statements assume that the firm’s past financial condition is an accurate indicator of the future. There are several examples from the past where organizations were not accurately reporting their financial information. Discuss the relationship between the external auditor and the organization. What steps have been taken to ensure that the relationship is truly neutral and no bias is shown by the external auditing firm?

The Role and Impact of the Health Insurance Market (Paper)

Over the years, the health insurance market has become more competitive and, as a result, consumers “…have been offere ...

The Role and Impact of the Health Insurance Market (Paper)

Over the years, the health insurance market has become more competitive and, as a result, consumers “…have been offered a greater choice in benefits, cost-sharing arrangements, premiums to match their own experience, and types of insurance products” (Feldstein, 2012, p. 242).For this assignment, prepare an economic analysis brief that describes the role and impact of the health insurance market in the U.S. healthcare industry to demonstrate an understanding of Module 4. Discuss and synthesize key elements from at least two recent scholarly articles (found in the CSU-Global Library) that address one of the following points:Determine the performance of the health insurance industry.Apply economic models, theories, or assumptions.Offer objective methods for attempting to predict future market behavior in response to events, trends, and cycles.Assess economic policy recommendations for healthcare stakeholders.Your analysis should be thoughtful and thorough, well written, and formatted as follows:Title pageIntroduction – What is the topic, why is it important, and what are the objectives of your brief?Body – What are the key elements of the scholarly articles that support the objectives of your brief? What economic models or concepts apply?Conclusion – What are the future implications, policy recommendations, etc.? Reference page.Your paper should be 2 to 3 pages (not including the required title and references pages) in length and conform to CSU-Global Guide to Writing and APA.