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Savatey [412]
2 years ago
9

Assume that the marginal propensity to consume is 0.8 and that potential output is $800 billion. If real GDP is $850 billion, to

bring the economy to potential output, the government should: decrease spending by $50 billion. increase spending by $50 billion. decrease spending by $10 billion. decrease transfers by $50 billion.
Business
1 answer:
kari74 [83]2 years ago
7 0

The following policies would bring the economy to potential output is Decrease government spending by $10 billion.

<h3>What is Marginal Propensity?</h3>

The "Marginal Propensity" to consume is defined as calculate quantification of money that consumers are ready to spend.

The term "Marginal propensity" to consume is term used in economics. It measures monetary value which consumer is willing to spend to buy goods and services instead of saving it.

The "Marginal Propensity" to consume tends to increase economic activities of country by keeping cash flowing and by not keeping it stagnant. It also helps in increasing trade value and quality and cost of products because it increases healthy competition among companies and in which consumers are ultimately benefitted.

Therefore , we can conclude that the correct option is C.

Learn more about Marginal propensity on:

brainly.com/question/17930875

#SPJ4

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On September 3, 2021, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows:
GREYUIT [131]

Based on the information given the appropriate journal entries to record the exchange for both Robers and Phifer are:

Robers entries

Debit Equipment (new) $77,000  

Debit Accumulated Depreciation $111 000  

Debit Cash $19,000  

Credit Equipment  $190,000

Credit Gain on Sale $17,000

($77,000+$111,000+$19,000-$190,000)

Phifer's entries

Debit Equipment(new) $96,000  

Debit Accumulated depreciation $119,000  

Debit Loss on Sale $14,000

($210,000+$19,000-$96,000-$119,000)

Credit Equipment  $210,000

Credit Cash  $19,000

Learn more about journal entries here:brainly.com/question/24696035

4 0
2 years ago
What is an exchange rate? A. How much bonds are worth when they're exchanged with cash B. How much dollars are worth when they a
lidiya [134]

Hello!
The answer is

C. How much a currency is worth when it's exchanged with another country's currency.

Good luck!

6 0
3 years ago
True/False: the two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets
Neporo4naja [7]

Answer:

True

Explanation:

According to Thomas Duening and Robert Hisrich book "Technology Entrepreneurship: Taking Innovation to the Marketplace", the direct purchase has some problems: long-term capital gain to the seller and double taxation. The bootstrap purchase eliminates those problems: the acquiring company can acquire a small amount of the firm, 20 or 30% in cash and the remaining with a long-term note.

5 0
3 years ago
Parents can reduce their taxes by:
shusha [124]

Parents can reduce their taxes by using a child care tax credit. The government gives parents tax credit for each child that they have. Unlike tax deduction and exemption, tax credit can be able to reduce more in the parents’ tax bill. Tax deduction just tries to lower the taxable income and not a reduction in other areas. 

8 0
3 years ago
Read 2 more answers
Bloom Company management predicts that it will incur fixed costs of $160,000 and earn pretax income of $164,000 in the next peri
Lena [83]

Answer:

  1. SALES IN DOLLAR $1,296,000
  2. VARIABLE COST IN DOLLAR $972,000

Explanation:

The process would be to use formulas of the variable costing method to solve for each term:

We are going to use the operating income formula

<em>contribution margin - fixed cost = operating income</em>

<u>Replace </u>with the know values:

<em>contribution margin</em> - 160,000 =  164,000

now <u>solve </u>for the unknow value

contribution = 164,000 + 160,000 = 324,000

Next step we use the contribution margin ratio formula to get the sales:

<em>contribution margin/sales = contribution ratio</em>

<u>Replace </u>with the know values:

324,000/<em>sales </em>= 0.25

now <u>solve </u>for the unknow value:

sales = 324,000/0.25 = 1,296,000

Lastly we use the contribution margin formula to solve for variable cost:

sales - variable cost = contribution margin

<u>Replace </u>with the know values:

1,296,000 -<em> variable cost </em>= 324,000

now <u>solve </u>for the unknow value:

variable cost= 1,296,000 - 324,000 = 972,000

5 0
3 years ago
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