1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
miss Akunina [59]
2 years ago
6

Suppose that the economy is in a long-run equilibrium at a price level of 100 and full-employment real GDP of $500 billion. An e

xpansion occurs resulting from a $100 billion increase in aggregate demand. In order to restore the economy to full employment given a MPC of 0.80, government purchases would need to: Multiple choice question.
Business
1 answer:
Anna35 [415]2 years ago
5 0

Government purchases would need to: decrease by $20 billion.

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

Marginal Propensity to Consume (MPC) measures the proportionate rise in the consumption with increase in income or we can say it measures the proportion of extra pay that is spent on consumption of goods and services rather than saving it.

Marginal Propensity to Consume or MPC is dependent on the income level. It may vary with the income levels and it can be seen that the MPC is lower at higher income levels. MPC can be calculated by determining the change in consumption divided by the change in income.

MPC is represented by the consumption line, which is a sloped line that is formed when change in consumption is plotted on the vertical y-axis with change in income on the horizontal x-axis.

This can be illustrated from the following formula.

k = 1/ 1- MPC

Where k = Multiplier effect

MPC = Marginal Propensity to Consume

<h3>How many Types of MPC?</h3>

MPC can be classified into three types, which are

1. MPC more/greater than 1.

2. MPC equal to 1.

3. MPC less than 1.

Thus , we conclude that the amount of government purchases would have to be decreased by $20 billion.

Learn more about Marginal Propensity to Consume on:

brainly.com/question/14310761

#SPJ4

You might be interested in
As a rule of thumb, how often should an entrepreneur reevaluate her compensation package?
shusha [124]

Answer:

12 months

Explanation:

The fiscal or financial period of a business lasts for 12 months or one year. It means that at the end of that  12 months, the business prepares its financial statement to determine its profitability. The business assesses its growth, success, and failure for the period.

After evaluating performance, planning for the next period of 12 months begins. The entrepreneur prepares a budget for the year, including their compensation. Compensation for the entrepreneur should be budgeted and reviewed every year together with the other budget items.

7 0
3 years ago
Read 2 more answers
The debits to Work in ProcessâAssembly Department for April, together with data concerning production, are as follows: April 1,
sergey [27]

Answer: c. $2.89 per unit

Explanation:

Using the First-In, First-Out method, we need to find the equivalent units first:

= Equivalent opening units + Units started and completed + Equivalent ending units

= (Opening units left to be completed) + (Units completed - opening units) + (proportion of closing units completed with respect to conversion)

= (3,000 * (1 - 40%)) +  (12,000 - 3,000) + (1,000 * 40%)

= 11,200 units

Conversion costs = 32,363

Conversion cost per units:

= 32,363 / 11,200 units

= $2.89 per unit

4 0
3 years ago
Which of the following would affect a country’s currency value?
katen-ka-za [31]

free-trade agrwements

6 0
3 years ago
Louise Bragan has a sideline business of carving candlestick holders. She began by hand carving them with simple tools. On avera
Darya [45]

Answer:

3.25 holder/$

Explanation:

Given:

Material cost = $150

Miscellaneous costs = $50

Labor cost = $200

Total production = 1300 candlestick

  • Multi-factor productivity = Output / (labor cost+ material cost+capital+Miscellaneous costs)

Multi-factor productivity = 1300 / ($200+$150+$50)

Multi-factor productivity = 1300 / ($400)

Multi-factor Productivity = 3.25 holder/$

8 0
3 years ago
If you have worked at McDonalds, does that count as retail experience or no?
BaLLatris [955]
Technically no because it is not exactly retail experience
3 0
3 years ago
Other questions:
  • Quinbeck Inc., a computer manufacturing company, annually donates 6% of its total profits to an orphanage. The company also prov
    10·1 answer
  • On monday, the meteorologist forecast a 20 percent chance of rain, so sheryl took her umbrella to work. on friday, he reported a
    12·1 answer
  • Which terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?
    5·1 answer
  • A company has net income of $187,000, a profit margin of 8.6 percent, and an accounts receivable balance of $126,370. Assuming 6
    14·1 answer
  • What is a demand relationship?
    10·1 answer
  • A successful total quality management (TQM) program requires
    6·1 answer
  • Hannah posts her résumé on the websites of several companies. Unfortunately, it is poorly formatted and contains several spellin
    6·1 answer
  • Bill and Kay are a married couple with $13,000 in total deductions. In 2019 are they better off...
    9·1 answer
  • How can we create a more stable economy and create new jobs for the unemployed
    8·2 answers
  • Looking forward to next year, if Baldwin’s current cash balance is $20,201 (000) and cash flows from operations next period are
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!