Discussion 1: Respond To The Following In A Minimum O 520150
Discussion 1respond To The Following In a Minimum Of 175 Words
Discussion 1 respond to the following in a minimum of 175 words: Discuss how changes in the Federal Reserve’s monetary policy affect at least 1 of the 4 components of GDP (consumption, investment, government spending, net exports). Have the Federal Reserve’s countercyclical monetary policies been effective in moderating business cycle swings? Justify your response.
Discussion 2 As the full-time bookkeeper, your job is to make any corrections to the general ledger accounts. Each correction must include the reason for the change and the effect on each account, whether it is an increase or decrease. For the third time this month, a co-worker has recorded a cash receipt twice and wants you to record a correcting entry that will reverse the mistakes. The correcting entry will record a credit to the Cash account and a debit to the Sales account. Your co-worker has offered to buy you dinner for fixing this mistake. Respond to the following in a minimum of 175 words: What should you investigate before making a decision about the correcting entry? What is happening to the Cash account? Would you accept a dinner offer from your co-worker for fixing the mistake?
Paper For Above instruction
The monetary policy actions undertaken by the Federal Reserve (Fed) significantly influence various components of Gross Domestic Product (GDP), particularly investment. Changes in interest rates, a primary tool of the Fed, directly affect borrowing costs for businesses and consumers. When the Fed raises interest rates to curb inflation, borrowing becomes more expensive, often leading to decreased business investments in capital projects and expansion. Conversely, lowering interest rates encourages borrowing, thereby stimulating investment activity. Investment is a critical component of GDP, accounting for infrastructure development, business expansion, and new technology adoption. Therefore, expansionary monetary policies tend to boost investment, contributing to economic growth, while contractionary policies can slow it down.
The effectiveness of the Fed’s countercyclical policies in moderating business cycle fluctuations has been widely debated. Historically, these policies have been somewhat successful in smoothing out extreme swings in economic activity. During recessions, the Fed often lowers interest rates or implements quantitative easing to invigorate demand and investment, thus mitigating the severity and duration of downturns (Bernanke, 2015). Similarly, during overheating economies, the Fed raises rates to slow economic activity and prevent runaway inflation. However, these policies are not flawless. Sometimes, monetary easing can lead to excessive inflation or asset bubbles, and timing the policies precisely remains challenging. Overall, while not perfect, countercyclical monetary policy remains a vital tool for stabilizing economic fluctuations.
In the context of a potential correction to a double-recorded cash receipt, thorough investigation is essential before making any ledger adjustments. First, the extent of the duplication needs to be verified by examining documentation, such as cash receipts and sales records, to confirm the error. It is important to understand whether this duplication is an isolated incident or part of a broader pattern of misrecordings. Next, the impact on the Cash account should be assessed; since the duplicate entry erroneously inflates the Cash account, reversing it by crediting the Cash account restores accurate cash balances. Correspondingly, debiting the Sales account reflects the correction in revenue recognition, ensuring that sales are not overstated.
Regarding the offer of dinner, professional ethics should guide decision-making. Accepting personal favors in exchange for correcting accounting errors can undermine objectivity and lead to conflicts of interest (AICPA, 2010). Maintaining integrity is paramount in financial reporting; therefore, refusing the dinner is advisable to uphold ethical standards. The focus should remain on accurate record-keeping and safeguarding the integrity of financial information, free from undue influence.
References
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