If the government spending multiplier is 2 and government purchases increase by $200 billion, output will increase by option B) $400 billion.
There are two types of government spending multipliers namely the spending and tax multipliers. When the government increases spending, it can lead to an increase in GDP. The size of this increase can be calculated by the spending multiplier. The spending multiplier can be defined as the increase in final income arising from any new injection of spending. It is the ratio of the change in the equilibrium level of real GDP to a change in autonomous spending, other things remaining the same. The government spending multiplier is the spending multiplier when an increase in government spending is financed by an increase in the national debt. It measures the change in the level of real GDP resulting from a change in government spending financed by borrowing. The formula for calculating the government spending multiplier is as follows:
Government spending multiplier = 1/(1-MPC)
Where MPC is the marginal propensity to consume
In this case, the government spending multiplier is 2.
Therefore, if government purchases increase by $200 billion, output will increase by:
$200 billion x 2= $400 billion
Therefore, the answer is B) $400 billion.
To learn more about government, visit:
https://brainly.com/question/31531439
#SPJ11
This circle graph shows the results of a survey that asked people to identify their favorite type of music. What percent of people chose rock or country as their favorite type of music?
Answer:
answer 45
Explanation:
Answer:
45%
Explanation:
Which type of business organisation is the most suitable for a large electronics
manufacturer?
A. partnership
B. private limited company
C. public limited company
D. sole trader
Answer:
C. public limited company
Explanation:
A public limited company is a business ownership structure that provides a legal distinction between the business and its owners. The company is a legal person with the right to do business, acquire assets or incur liabilities. Unlike a private limited company, public limited company shares trade with ease at the stock exchange.
Due to their listing in the stock exchange, public limited companies can raise capital with much ease. The corporation only needs to comply with the regulation of the stock market to raise more finances. Public limited compies are suited for large organizations that require huge capital to finance their operations and expansions.
Which of the following types of advertising has the advantage of being especially affordable?
Magazine advertising
Internet advertising
Billboard advertising
Answer:
magazine advertising
Explanation:
most people think of the large glossy national publications full of big band adveritisers.
Answer:
internet advertising
Explanation:
3. Monopoly Equilibrium (over-pricing and under producing) and Negative Welfare Effects Estimation Use linear supply, linear demand equations: Qs -43 2.9P QD 185-3.2P Calculate
O .Perfect competition (PC) equilibrium P and Q
O .Monopoly (M) equilibrium P and Q
O .PC and M consumer surplus
O .PC and M producer surplus
O .PC and M Deadweight Loss
O .Calculate an effective 2-tier price discrimination scheme
O .Calculate M consumer surplus after the effective price discrimination
O .Calculate M producer surplus after the effective price discrimination
Perfect Competition (PC) Equilibrium:Pc = 40, Qc = 100
Monopoly (M) Equilibrium:
Pm = 70/9, Qm = 440/9
PC Consumer Surplus:CSPC = (1/2) * (Qc - QD) * (Pc)
CSPC = 18500/9
M Consumer Surplus:CSM = (1/2) * (Qm - QD) * (Pm)
CSM = 5450/9
PC Producer Surplus:
PSPC = (1/2) * (QD - Qc) * (Pc)PSPC = 15500/9
M Producer Surplus:
PSM = (1/2) * (QD - Qm) * (Pm)PSM = 5450/9
PC Deadweight Loss:
DWLPC = (1/2) * (Qm - Qc) * (Pm - Pc)DWLPC = 17600/81
Effective 2-tier Price Discrimination:
Tier 1: P1 = 40, Q1 = 55Tier 2: P2 = 70/11, Q2 = 335/11
M Consumer Surplus after Price Discrimination:
CSMPD= (1/2) * (Qm - QD) * (Pm)CSMPD= 4730/9
M Producer Surplus after Price Discrimination:
PSMPD= (1/2) * (QD - Qm) * (Pm)PSMPD= 6880/9
Please note that the calculations and values provided above are based on the given linear supply and demand equations.
Learn more about consumer here:
https://brainly.com/question/30132393
#SPJ11
What are some legal ways to come by money?
Answer:
Blogging
Explanation:
Starting a blog and generating income is one of the fantastic and easy ways to make money legally from home if you have a specific niche in your mind and can build a decent audience around it.
For example, if you like to travel around the world, you should start a travel blog and guide people to the best places to visit, etc.
assume an economy has automatic stabilizers in place that include a progressive tax structure and a transfer payment system. then in a period of economic recession with high unemployment, we would expect: group of answer choices government spending on social security benefits to fall. average tax rates and welfare payments to decline. the national debt to become smaller. average tax rates and government revenues to rise. tax revenues to fall and unemployment compensation to rise.
We would anticipate the following during an economic downturn with substantial unemployment: Government social security benefit spending will increase, a decrease in welfare payouts and average tax rates, increasing the level of the national debt Average tax rates will increase, government revenue will decrease, tax revenue will decrease, and unemployment benefits will increase.
Area with a high unemployment rate According to the Secretary, a "area of substantial unemployment is any area that is large enough to support a program of workforce economic investment activities carried out under this part and that has an average unemployment rate of at least 6.5 percent for the previous 12 months.
Learn more about substantial unemployment, from :
brainly.com/question/32392831
#SPJ12
the intent of managed health care was to a. replace fee-for-service plans with affordable, quality care to health care consumers. b. dramatically improve the health care delivery system in the united states. c. have employees of a managed care organization provide patient care. d. retrospectively reimburse patients for health care services provided.
Replace fee-for-service arrangements with ones that offer patients cheap, high-quality care. Managed health care's goal was to. Enrollees.
How do you employ manage?
To be successful at managing something, especially something challenging He suppressed his disappointment and forced a feeble smile. We will manage it, albeit I'm not really sure how. manage (to do something) (to do something) We arrived at the airport with plenty of time.
to take care of and decide upon: directly. control a factory; 2 to produce and maintain under one's control she has good control of her skis.
Today I'll use another phrase that many of my students find confusing: "manage to."
Know more about Enrollees here:
https://brainly.com/question/28558873
#SPJ4
A massive amount of ammonia gas has been accidentally released near your office. You have a room without windows and relatively tightly sealed doors. Should you shelter in place?
Select the best option.
Yes
No
The statement A massive amount of ammonia gas has been accidentally released near your office. You have a room without windows and relatively tightly sealed doors is true as you should shelter in place if a massive amount of ammonia gas has been accidentally released near your office and you have a room without windows and relatively tightly sealed doors.
Sheltering in place means staying indoors and creating a barrier between yourself and the outside environment to reduce exposure to hazardous material. A room with a tightly sealed door can provide a good barrier against the outside air and help to prevent the entry of hazardous gases.
It is important to follow any instructions given by emergency responders and to stay informed about the situation until it is safe to leave.
To know more about hazardous material here
https://brainly.com/question/29630735
#SPJ1
A financial institution that accepts deposits makes loans and provides other services as a nonprofit organization is called a:
A. Credit Union
B. Retail Bank
C. Title Pawn Lender
D. Payday Lender
Credit Unions are nonprofit financial institutions that accept deposits, provide loans, and offer other services. As a result, choice (A) is right.
What is meant by a nonprofit organization?A nonprofit organization (NPO) or non-profit organization is a legal entity organized and operated for a collective, public, or social benefit, as opposed to an entity that operates as a business with the goal of making a profit for its owners. It is also referred to as a non-business entity,[1] or nonprofit institution,
The non-distribution constraint applies to nonprofit organizations, which means that any surplus funds must be used to further their mission rather than being distributed to other parties.
A wide range of organizations, including certain political organizations, schools, business organisations, churches, social clubs, and consumer cooperatives, are nonprofit. Governments may grant tax-exempt status to nonprofit organizations, and some may be eligible for tax-deductible donations. However, an organization can establish as a nonprofit organization without obtaining tax-exempt status.
Learn more about nonprofit organization, from :
brainly.com/question/25230172
#SPJ7
the ability to walk away from a purchase when negotiating is called:
The ability to walk away from a purchase when negotiating is called "BATNA", which stands for "Best Alternative To a Negotiated Agreement".
BATNA is a concept in negotiation theory that refers to the course of action that a party will take if a negotiation fails to reach an agreement. In other words, it is the best alternative available to a party if negotiations do not result in a satisfactory outcome.
Having a strong BATNA gives a negotiating party leverage in the negotiation, as they have other options that they can pursue if the negotiation does not work out. This can include finding alternative suppliers, exploring other options for meeting their needs, or simply walking away from the deal.
The ability to walk away from a negotiation is particularly important when negotiating high-stakes deals, as it allows the parties involved to make decisions based on their own best interests, rather than feeling pressured to make concessions in order to reach an agreement.
To learn more about “Agreement” refer to the https://brainly.com/question/27899951
#SPJ11
Charles has recently been named trustee of his mother - in - law's estate . Her only financial assets are several mutual funds that are prohibited for Charles . Charles is in the process of divesting what should he do?
Select the one response that applies
- He should report the funds. There is no need to report the divestiture
- He should report the funds and divestures when he receives the trust's monthly statement confirming the trust no longer holds the funds
- Divest and do not report the mutual funds in his Tracking & Trading system
- He should record both the acquisition and the disposal of the mutual funds within 10 days of each event .
Based on the information in the question, Charles should report the funds and divestitures when he receives the trust's monthly statement confirming that the trust no longer holds the funds. Therefore, the correct answer is the second option.
Divestiture is the action of disposing of a business unit through selling, exchanging, closing, or filing bankruptcy. Mutual fund is a professionally managed pool of money that is collected by a number of investors that share a common objective in investment.
In the case in question, the mutual funds are prohibited for Charles. He is also in the middle of a divesting process. Therefore, the thing that he should do is to report both the mutual funds and divestitures. It should be done when he receive the trust's monthly statement that confirms the trust no longer hold the funds.
Learn more about mutual funds at https://brainly.com/question/4521829
#SPJ4
What is unique about being an administrative professional in a government job
Government jobs offer a number of unique benefits, including job security, competitive salaries, and excellent benefits.
One of the most unique aspects of being an administrative professional in a government job is the level of job security. Government jobs are typically very stable and offer excellent benefits, such as health insurance, retirement plans, and paid time off. Additionally, government jobs often offer opportunities for advancement, which can lead to higher salaries and more responsibility.
Another unique aspect of government jobs is the opportunity to make a difference in the community. Government agencies work on a wide range of issues that impact the lives of citizens, such as education, healthcare, and public safety. Administrative professionals play a vital role in supporting these efforts, and they can take pride in knowing that their work is making a positive impact on the community.
If you are looking for a stable, secure, and rewarding career, a government job as an administrative professional may be a great option for you.
Here are some additional benefits of being an administrative professional in a government job:
Opportunities for professional development: Government agencies often offer opportunities for employees to take training courses and workshops to develop their skills and knowledge.
Flexible work arrangements: Many government agencies offer flexible work arrangements, such as telecommuting and flextime, which can help employees balance work and personal life.
A positive work environment: Government agencies are typically known for having positive work environments that are supportive and collaborative.
To learn more about government job here brainly.com/question/29466796
#SPJ11
Jackson is preparing for his hearing before the Federal Communications Commission (FCC) involving a complaint that was filed against him by the FCC regarding the interruption of radio frequency. The order to "cease and desist" using the radio frequency has had a detrimental impact on his business.
The Federal court, through stare decisis, will look to precedent in ruling on Jackson's case.
Yes, the court will look to cases that have already been decided in deciding Jackson's case.
No, the court will start with a clean slate in reaching a decision regarding Jackson's case.
Answer:
Yes, the court will look to cases that have already been decided in deciding Jackson's case.
Explanation:
The court has scheduled hearing which Jackson has to attend. In this case the court will look into details of the matter and then find out the decision. If there are some difficulties in concluding the case then references will be taken from previous cases whose decisions has been decided.
Answer:
Yes, the court will look to cases that have already been decided in deciding Jackson's case.
Explanation:
I did the assignment in edge 2021.
1) a pension fund manager must satisfy a liability of $9,000,000 in six years from now. assuming that an annual interest rate of 7.5% can be earned on any sum invested today, how much must the manager invest in order to have the funds necessary to meet the liability coming due 6 years from now?
The manager should invest $5,548,430.92 in order to have funds necessary to meet liability coming due 6 years from now.
What is a fund?A fund is a pool of money that is collected from various investors and is used for a specific investment purpose. These investments can be made in a variety of assets like stocks, bonds, real estate, or commodities. Funds are typically managed by professionals who use their expertise to make investment decisions on behalf of the investors. The investors in a fund receive returns based on the performance of the underlying assets. There are different types of funds such as mutual funds, exchange-traded funds (ETFs), hedge funds, and pension funds. Funds are a popular way for individuals to invest in a diversified portfolio of assets without having to manage them directly. They also offer economies of scale, lower transaction costs, and professional management.
PV = FV/(1 + r)^n
PV = $9,000,000 / (1 + 0.075) ^6
PV = $5,548,430.92
Therefore, manager must invest $5,548,430.92 today to have enough funds to meet liability of $9,000,000 in six years, assuming annual interest rate of 7.5%.
To learn more about fund, visit:
https://brainly.com/question/27387769
#SPJ1
Should a business email contain a salutation?
Answer:
A business email is meant in a professional way. It can be sought out as multiple different approaches, one of them, in this case, can include a friendly and welcoming business approach, including a salutation. All in all, it is up to the writer, there is no fully correct answer. Hope this helps :)
If you want to know whether a company had a profit or a loss during a specific period of time, which financial statement would be most helpful?
A.
Statement of owners' equity
B.
Cash flow statement
C.
Balance sheet
D.
Income statement
Answer:
The answer is D. Income statement
Explanation:
Answer:
D. income statement
Explanation:
i took the test
The share in the company's profit is called_________.
Answer:
profit sharing
Explanation:
From Investopia they define profit sharing as
"A plan gives employees a share in their company's profits based on its quarterly or annual earnings."
When planning an effective lead nurturing campaign, what is the first step that you should take as an inbound professional: Setting goals
Creating content
Selecting personas
Identifying the timeline
Measuring and improving.
Setting goals is the first step that an inbound professional should take when planning an effective lead nurturing campaign.
How do you begin a campaign for lead nurturing?Make an automated travel first. Making automated journeys is the simplest method to design your lead nurturing campaigns in Campaign Monitor. Simply select "Create a new travel" under "Automation" in the menu. You then use specific parts and decide on triggers to begin the journey.
What should be the first thing an advertiser thinks about when planning a campaign?The first thing an advertiser should consider when planning a campaign is the advertiser's goal. It implies that the advertiser's work should be clear. His goal should be clear so that he can devise a better strategy. Pricing, targeting options, and creative messaging are all part of this.
To know more about nurturing campaigns visit:
brainly.com/question/30101919
#SPJ4
In trading account freight belongs to which side debit or credit?
Answer:
Explanation:
In trading account, freight belongs to the debit side. It is a direct expenses on purchases and manufacturing operation
Freight is the cost incurred in transporting an item to its final destination when the terms are FOB shipping point. It is treated as part of the cost of merchandise and recorded in the inventory if the merchandise has not been sold.
Increase in the cost of freight are recorded on the debit side while decrease are recorded on the credit side.
what effect will a low economic growth have on the country
Answer:
it can lead to national poverty and economy crisis
the post. ref. columns are used to trace transactions from the accounts to the journal. what will be entered in the post. ref. column of (1) the journal and (2) the account?
The account number and the Journal page number will be entered in the post. ref. column.
When you’re going over your financial statements, do you often find yourself wondering what the number in this column means? If so, you’re not alone! Many people can benefit from understanding the columns of numbers on their balance sheets and income statements, which include the post refs column.
If you’ve ever seen accounting transaction data, you’ve probably noticed references to post refs scattered throughout the information. These little entries can appear in many places throughout an accounting document, and they’re used by accountants and bookkeepers to help them keep their record-keeping straight.
The post reference column: The post reference column is used for entering the date (using day-month-year format) of the transaction.If a transaction occurs on two dates, the most recent date should be entered in this column.
For example, if an account received $1000 from an outside source on November 1st and then deposited it into the account again on November 8th, the post reference number would show 111018.
The column can also be used to trace transactions from one account to another by matching up the numbers.
The account number: For each transaction in the Journal, you will have a corresponding line on your Balance Sheet.For example, if you have an expense entry in the Journal of $150, this would be seen as an increase to accounts payable on your Balance Sheet. - So for (1) the journal, you would enter 150;
- And for (2) the account, you would enter 250. The posting references column helps trace transactions from accounts to the general ledger.
It can also act as a helpful guide when comparing numbers on your balance sheet versus numbers in your cash flow statement or income statement.
The journal page number: The account would go in the post. ref. column of the journal on the left side, while the journal would be input into the post. ref. column of the account on the right side.That way you are able to trace transactions from one account in one area of your ledger system (your journal) to another (your account).
When you do that, it helps keep track of all transactions as they happen instead of waiting until after a number of transactions have been made before writing them down.
To learn more about Post. ref. column refer to:
https://brainly.com/question/1388800
#SPJ4
Which statement best describes a hedge fund?
A. A hedge fund is lower in risk than most mutual funds.
B. A hedge fund is only open to accredited private investors.
C. A hedge fund represents the initial public offering of a company.
D. A hedge fund is public and open to all investors willing to buy in.
B. Only accredited private investors are permitted to invest in hedge funds.
How Do Hedge Funds Work?An experienced fund manager oversees the capital of a limited partnership of private investors known as a hedge fund. These managers employ a variety of strategies, such as borrowing money or trading in non-traditional assets, to generate returns on investments that are higher than average.
Investment in hedge funds is frequently viewed as a risky alternative investment option because it typically has a high minimum investment requirement or net worth requirement and frequently targets wealthy clients.
Hedge funds invest in derivatives like options and futures, employ riskier strategies, and leverage their assets. The reputation of their managers in the exclusive world of hedge fund investing is a major draw for many hedge funds.
Learn more about hedge funds with the help of the given link:
brainly.com/question/9965923
#SPJ1
Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400. Cashreceipts are expected to be $641,000 and cash payments for purchases are expected to be $608,500.Other cash expenses expected are $27,000 selling and $33,500 general and administrative. The companydesires a minimum cash balance at the end of each month of $30,000. If necessary, the companyborrows enough cash to meet the minimum using a short-term note. The amount Webster must borrowduring April is:A) $0.B) $21,600.C) $8,400.D) $98,900.E) $58,000.
Answer:
Webster Corporation
Amount to borrow in April
B) $21,600.
Explanation:
a) Webster Corporation
Cash Budget for the month of April
Beginning Cash balance $36,400
Cash receipts 641,000
Total receipts $677,400
Cash expenses:
Purchases $608,500
Others 27,000
Selling & Admin. 33,500 669,000
Balance 8,400
Borrowing 21,600
Minimum cash balance $30,000
b) Webster's cash budget for April shows that it needs to borrow $21,600 in order to meet the minimum cash balance of $30,000. This is because the company does not generate enough cash in April to pay for expenses and meet minimum requirements for cash balance every month. The preparation of Webster Corporation's Cash Budget is a way of planning for the occurrence of the cash shortage that necessitated the borrowing.
please please.pleas help me
What are the advantages and disadvantages of consulting
NO LINKS!!!
Answer:
Advantages of Being a Consultant:
You can learn many skills
Consulting allows you to build a powerful network
You get responsible tasks from the beginning
Perfect if you like to travel
You learn to work with the latest technologies
You can work in project teams
Consulting allows you to see many new things
You can work with many clients
Continuous training
You can work with other motivated people in consulting
Consulting teams support each other
You work on demanding projects
Good for your CV
You learn how to deal with stress
Consultants can earn pretty good money
Great exit options
You can work on many projects
Consulting never gets boring
Explanation:
Disadvantages of Being a Consultant:
Pressure in consulting can be high
Strict deadlines are a problem
You will be pushed to your boundaries
Consulting can imply working long hours
You may be away from home during the week
Being a consultant can be lonely
Some people develop mental issues
No real work-life balance
Problematic in case you have children
You have to represent the company
Many of your colleagues will leave
Insecurity regarding what comes next
Great swings in workload
Unsatisfying outcomes
Success greatly depends on the project manager
A hotel is part of what industry?
A.
Service
B.
Wholesaling
C.
Subcontracting
D.
Cottage
Please select the best answer from the choices provided
A
B
C
D
question 10 in a highly competitive industry, demand for a firm's product is: a. unit elastic. b. perfectly inelastic. c. perfectly elastic. d. slightly elastic.
In a highly competitive industry, the demand for a firm's product is likely to be either perfectly elastic or slightly elastic. This means the correct answer is either c. perfectly elastic or d. slightly elastic.
In a perfectly elastic demand scenario, consumers are extremely sensitive to changes in price, and even a small increase in price will cause a significant decrease in demand. This occurs when there are many substitute products available, and consumers can easily switch to alternative options if the firm's product becomes too expensive. Therefore, the firm must be very cautious when setting prices, as any increase could lead to a sharp decline in demand.
On the other hand, if the demand is slightly elastic, it means consumers are somewhat responsive to changes in price. In this case, a price increase may lead to a decrease in demand, but the impact is not as significant as in a perfectly elastic scenario. The firm has some pricing power and can adjust prices within certain limits without experiencing a drastic decline in demand.
Overall, in a highly competitive industry, the demand for a firm's product is typically either perfectly elastic or slightly elastic, indicating the sensitivity of consumers to price changes and the importance of strategic pricing decisions.
To learn more about slightly elastic at brainly.com/question/30792000
#SPJ11
explain external economics and external diseconomics
Answer:
If the social cost of an activity exceeds the costs relevant to the decision makers in the activity , there is an external diseconomy . If the benefits of an activity exceed its marginal cost , there is an external economy .
Explanation:
Thaats whaaat upp
Explanation:
If the social cost of an activity exceeds the costs relevant to the decision makers in the activity, there is an external diseconomy. If the benefits of an activity exceed its marginal cost, there is an external economy.
You are Anil Gupta residing at 158, Vasu Nagar, Baranagar, Write a letter to your friend inviting him to your birthday party.
The letter to my friend inviting him to my birthday party is given below:
The LetterDear [Friend's Name],
I hope this letter finds you in the best of health and spirits. As you already know, my birthday is coming up, and I would like to invite you to my party.
The party is on [Date] at [Time] at my residence, 158, Vasu Nagar, Baranagar. We have planned a lot of exciting activities, music, and delicious food to celebrate the occasion.
Your presence at my birthday party would make me very happy, and I hope that you will be able to attend. Please let me know if you will be able to make it so that we can make the necessary arrangements.
Looking forward to your response and hoping to see you soon.
Warm Regards,
Anil Gupta
Read more about letter writing here:
https://brainly.com/question/24623157
#SPJ1
Which method of entering the global marketplace would be LEAST risky?
a.
Exporting
b.
Licensing
c.
Contract manufacturing
d.
Joint ventures
e.
Direct investment
Among the given options, exporting would generally be considered the least risky method of entering the global marketplace. The correct option is a).
Exporting involves selling products or services from the home country to customers in foreign markets. It can be done directly by the company or through intermediaries such as distributors or agents. Exporting allows a company to reach international customers without making substantial investments or establishing a physical presence in the foreign market.
Limited financial commitment: Exporting typically requires fewer financial resources compared to other methods. The company can leverage existing production capabilities and infrastructure to fulfill international orders without significant upfront investments.
Flexibility and control: Exporting offers greater control and flexibility as the company retains ownership and control over its products and marketing strategies. It allows for adaptability to changing market conditions and preferences.
Reduced exposure to local market risks: By exporting, a company can minimize exposure to risks associated with unfamiliar local markets, such as regulatory hurdles, cultural differences, and political instability.
Market diversification: Exporting allows companies to expand their customer base and diversify their revenue streams by reaching customers in different countries. This reduces dependence on a single market and provides opportunities for growth. Hence option a) is the answer.
Know more about exporting here:
https://brainly.com/question/28590941
#SPJ11
At Frank's company, the strength of the organizational structure is that the results are based on
the effectiveness of the managers, but its main weakness is costs can be increased due to a
decrease in efficiency. This is an example of which structure?
Osimple
O functional
O divisional
O matrix
Answer:
divisional
Explanation:
-A simple structure s a structure in which there is little specialization and there is a central authority that controls everything and has the power.
-Functional structure is a structure in which a company is divided in groups according to specialized activities. Because of this specialization, companies with this structure can increase productivity but the communication is rigid and the cooperation between departments is difficult.
-Divisional structure is a structure in which there are different divisions and each one concentrates on a specific product or service and has all the functions and resources for that. This structure can create inefficiencies because the specialized functions are separated but the results of one division don't affect the other ones.
-Matrix structure is a structure in which employees report to more than one manager and it is used in companies that have different lines to have more flexibility and increase productivity.
According to this information and the statement, the answer is that this is an example of divisional stucture because in this structure each division has its own resources and specialized functions and because of that the results are based on the effectiveness of the managers but as each division has its own specialized functions, this creates inefficiencies.