Each question is required to have organized and well thought out responses in Es

Question

Each question is required to have organized and well thought out responses in Essay format with a minimum of 2 paragraphs.

3- What is the difference between “Classical” and “Keynesian” Economics?

4- Who leads a corporation from a finance standpoint? What are their responsibilities?

5- What role does the Federal Reserve play as a financial institution in the overall economic and financial well being of the U.S.?

6- What would happen to the U.S. standard of living if people lost faith in the safety of the financial institutions? Explain.

7- How do airlines benefit from acquisitions of other airlines? How does it affect the market? How does it affect the consumer? How does it affect the share holders?

8- What is the function of Financial Statements? Who is interested in Financial Statements?

9- There are Four Key Financial Statements:
Income Statement (also known as Profit / Loss, or Statement of Operations)
Balance Sheet
Cash Flow Statement
Stockholders' Equity Statement

10- Please describe what each statements details.

“Cash is King” and operating cash flow is the lifeblood of a company and the most important barometer for investors.

A company that does not generate cash over the long term is on its way out. Which 3 Strategies to increase cash flow do airlines utilize?

11-Explain the aspects of financial diversification and why Companies use financial diversification to limit business risk. Is financial diversification the only cure-all for the disease known as business risk?

Explanation / Answer

3. Classical economics aims on perfect Competition and laseiz faire. He further states that real factors drive growth rate in the economy. It further states investment and export growth can lead any economy to high growth trajectory. Classic economist favour zero government intervention and thus believes that market will take its own course to move to the equilibrium. In classic model economist assume that economy is always at full employment level and hence expansionary fiscal policy or contractionary fiscal policy will not affect output level in economy it will result only in increased price level.

Keynesian focussed on role of government in boosting growth rate in any economy through higher government Expenditure. It does not believe in perfect Competition and emphasize on normal variables. Further Keynesian economist believes that there is always unemployment in economy and hence output can be increased in Keynesian models . Kenyesian believes in sticky price level and wage rigidity .

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