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1. Compute the change in owner's equity during the year by using the accounting equation.
2. Assume that there were no owner investments or withdrawals during the year. What is the probable cause of the change in owner's equity from part (a)?
3. Assume that there were no owner investments during the year. If the owner withdrew $17,000, determine and compute the company's net income or net loss. Be sure to label your answer.
4. If owner investments and withdrawals amounted to $13,000 and $2,000, respectively, determine whether the company operated profitably during the year. Show appropriate calculations.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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