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12345 [234]
1 year ago
5

If $1,000 of additional spending occurs and the marginal propensity to consume is 0.8, the total effect on the economy is an inc

rease of _____ in income or output.
Business
1 answer:
maks197457 [2]1 year ago
6 0

If $1,000 of additional spending occurs and the marginal propensity to consume is 0.8, the total effect on the economy is an increase of $5000 in income or output

In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it. Marginal propensity to consume is a component of Keynesian macroeconomic theory and is calculated as the change in consumption divided by the change in income.

MPC is depicted by a consumption line, which is a sloped line created by plotting the change in consumption on the vertical "y" axis and the change in income on the horizontal "x" axis.

Multiplier = 1 / (1 - MPC)

MPC = Marginal propensity to consume = 0.8

So,

Multiplier = 1 / (1 - 0.8)

=> Multiplier = 5

Changes in income or output = Multiplier * Changes in spending

=> Changes in income or output = 5 * 1,000

=> Changes in income or output = $5,000

Therefore, here the income or output increases by $5,000 in the economy.

Learn more about Marginal propensity here

brainly.com/question/19089833

#SPJ4

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PB4.
harkovskaia [24]

Answer:

The process cost summary is given below.

A-Total Material Cost                  = $22,500

B-Total Conversion costs           = $95,625 (45,625+50,000)

C-Units transferred out              = 40,000

D-Ending Inventory                    = 10,000

E-Equivalent units of material  =  45,000

F-Equivalent units of conversion costs  = 42,500

G-Equivalent cost per unit of material = $0.5 (A/E)

H-Equivalent cost per unit of conversion costs = $ 2.25 (B/F)

I-Equivalent cost per unit = $2.75 (G+H)

J-Cost of inventory transferred = $ 110,000 (I*C)

K-Cost Of Ending Inventory = $ 8,125 (H*(F-C) + (5000*0.5))

4 0
3 years ago
Albert is the manager of a large retail store, with the authority to hire employees. The store does not have a specialized human
anastassius [24]

Answer: An availability bias

Explanation: An availability bias is simply defined as the tendency for people to base their judgments on information that is easier to recall than on those that require extensive use of memory. It is also given as an unrecognized tendency of decision-makers to give preference to recent information, vivid images that evoke emotions, and specific acts and behaviors that they personally observed. Albert by asking questions that come to his mind easily as a result of inadequate preparation which leads to his hiring poor quality employees indicates an availability bias.

6 0
3 years ago
The market value of Charter Cruise Company's equity is $15 million and the market value of its debt is $5 million. If the requir
topjm [15]

Answer:

17%

Explanation:

To calculate this, we use the weighted average cost of capital (WACC) as follows:

Total capital = 15 + 5 = 20

Weight of equity = 15/20 = 0.75, or 75%

Weight of debt = 5/20 = 0.25, or 25%

WACC = (20% × 75%) + (8% × 25%) = 17%

Therefore, the company's cost of capital is 17%.

6 0
3 years ago
Read 2 more answers
An economic system describes how and why resources are transformed into GOODS and SERVICE to satisfy human consumption needs. We
Marta_Voda [28]

Answer:

Minimizing waste

Pareto efficiency

Explanation:

- This is a situation where waste from allocation of goods is reduced to the nearest minimum.

- This is when every economic good is optimally allocated across production and consumption so that no changes made to allocation can make any body better.

3 0
3 years ago
Leas Corporation staffs a helpline to answer questions from customers. The costs of operating the helpline are variable with res
Nikolay [14]

Answer:

The average cost of operating the helpline per call at a volume of 25,300 calls in a month will be $18.10

Explanation:

The costs of operating the helpline are variable with respect to the number of calls in a month. At a volume of 25,000 calls in a month, the costs of operating the helpline total $452,500.

The average cost of operating the helpline per call = $452,500/25,000 = $18.10

At a volume of 25,300 calls in a month, The average cost of operating the helpline per call does not change but the total costs of operating the helpline increase because the costs of operating the helpline are variable.

Total costs of operating the helpline = $18.10 x 25,300 = $457,930

7 0
3 years ago
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