BEC CPA Exam Review

BEC CPA Exam Review Demand Curve Shift Upward (direct relationship-positive shift) - ANSWER-The price of subsitute goods, expectations of price changes, income for normal goods, and extent of market Demand Curve Shift Downward (inverse relationship-neg. shift) - ANSWER-The price of complement good, income for inferior goods, and consumer boycotts SWOT analysis - ANSWER-strengths, weaknesses, opportunities, threats Three common measures of price inflation: - ANSWER-1. The Consumer Price Index (CP) 2. The Producer Price Index (PPI) 3. The GDP Deflator Okun's law - ANSWER-Provides a general rule of thumb showing how economic growth rates faster than average often result in reductions in unemployment Product differentiation strategies - ANSWER-seek to make the demand for a firm's products more inelastic. Transfer pricing - ANSWER-is the process for setting prices that are charged for the transfer of goods or services between related parties such as departments of a large entity. Full employment implies that - ANSWER-there frictional and structural unemployment, but not cyclical unemployment. The consumer price index (CPI) - ANSWER-is a common measure of inflation. It compares the price of goods and services in a base year to the price of the same goods and services at a later year. The CPI is commonly used to convert figures not readily comparable across years into figures that are more comparable. The phases of the business cycle are - ANSWER-expansion, peak, contraction (ie, recession), and trough.