All categories

2 years ago

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _ by _.

1 answer:

8 0

If the government cuts taxes by $40 billion, this puts more money in consumers' pockets. Given an MPC of 0.8, this means they will spend $32 billion

Evaluating :

(0.8 × $40 = $32).

The correct answer is an increase of $32 billion.

GDP:

Gross domestic product (GDP) is a measure of the final goods and services produced with a specific region over a specified period of time. It is computed as follows:

GDP = Consumption + Government Spend + Investment + Net Exports

What is Marginal Propensity to Consume (MPC)?

Marginal propensity to consume (MPC) is measured as the portion of an increase in pay that a consumer would spend on goods and services as opposed to saving. Essentially, it is measuring how sensitive consumption in an economy is to increases in income. MPC is important in economics because it illustrates the effect that increased government spending has on the economy.

Learn more about Marginal propensity :

brainly.com/question/25821146

#SPJ4

You might be interested in

Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218

lara31 [8.8K]

Answer:

The maximum Southern Tours could pay to acquire the Holiday Vacations is the present is the value of the inflows to be generated from the target company.

The present of the target business is $519,799.59

Explanation:

That amount is the maximum that should be paid for the target business,depending on negotiation skills of Southern Tours' management.

A lower price could be bargained,which better makes the investment more profitable.

Find attached spreadsheet for detailed computations.

Download xlsx

6 0

3 years ago

Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 20

satela [25.4K]

Answer:

net income during 2019 = $109,045

Explanation:

total stockholder equity 2018 = assets - liabilities = $293,500 - $79,245 = $214,255

total stockholder equity 2019 = assets - liabilities = $497,512 - $177,212 = $320,300

change in equity from 2018 to 2019 = $106,045

$33,000 can be explained by additional capital invested, and the remaining $73,045 corresponds to change in retained earnings

change in retained earnings = net income - dividends distributed

$73,045 = net income - $36,000

net income = $109,045

7 0

3 years ago

One example of a company that is allowed to sell shares to the public

Nuetrik [128]

A public company may be formed by persons among the public including Indian nationals or foreigners. It may be conceived in the government, cooperative, joint, as well as private sector of the economy. Some examples of public companies are, Reliance Industries, Tata Motors, Bharti Airtel, Larsen & Tourbo, etc.

mark me bainlest plss

5 0

3 years ago

Plummer Industries purchased a machine for $43,800 and is depreciating it with the straight-line method over a life of 8 years,

tensa zangetsu [6.8K]

Answer:

$2,580

Explanation:

Depreciation = (Cost - Residual Value)/ Useful life

Yearly depreciation = ($43-800 - $3000)/8 = $5100

At the end of Year 5, total depreciation would be = $5100 X 5 = $25,500

Net book value at the end of year 5 = $43,800 - $25,500 = $18,300

Year 6, the extra ordinary repair that extended the useful life would be capitalized. Book value = $18,300 + $7,500 = $25,800

As 5 years have been expended, the remaining useful life would be 15-5 = 10 years

Depreciation expense year 6 = $25,800/10 = $2,580

7 0

3 years ago

DW has an ending Retained Earnings balance of $51,600. If during the year DW paid dividends of $4,100 and had net income of $21,

VikaD [51]

Answer:

$34,600

Explanation:

The computation of beginning retained earnings balance is seen below:

But we know that;

Ending balance of retained earnings = Beginning balance of retained earnings + Net income - Dividend paid

$51,600 = Beginning retained earnings + $21,100 - $4,100

Beginning retained earnings = $51,600 - $21,100 + $4,100

Beginning retained earnings = $34,600

4 0

2 years ago

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _____ by _____.

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. real gdp will _ by _.