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Question - On January 1 of the current year, Bob's Lawn Care Service reported owner's capital totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year Bob withdrew $20,000 from the company. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, find the change in owner's capital during the year?
a. An increase of $9,500.
b. A decrease of $30,500.
c. An increase of $30,500.
d. Impossible to determine from the information provided.
e. A decrease of $9,500.
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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