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Question - 1. What is the company's overall break-even in total sales dollars?
2. Of the total fixed costs of $282,000, $18,000 could be avoided if the French Carpet was dropped, $96,000 if the Meditrainian Carpet was dropped and $60,000 if the Welsh Carpet was dropped. The remaining fixed costs are common and are unavoidable unless the company went out of business.
a. What is the break-even quantity and dollars of each product?
b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company? Explain this result.
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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