Use of discretionary policy to stabilize the economy

should the government use monetary and fiscal policy in an effort to stabilize the economy? the following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economic fluctuations.

the following graph shows a hypothetical aggregate demand curve (ad), short-run aggregate supply curve (as), and long-run aggregate supply curve (lras) for the u. s. economy in february 2020.

suppose the government decides to intervene to bring the economy back to the natural level of output by using (expansionary/contractionary) policy.

depending on which curve is affected by the government policy, shift either the as curve or the ad curve to reflect the change that would successfully restore the natural level of output.

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.