Based on the economic data given, and the fact that the government is running a deficit, the equilibrium GDP will be 336.67.
If government spending is cut to balance the budget, the new level of GDP will be 321.67.
The effect of balancing the budget will be a decrease in GDP and a slower recovery from the recesssion.
<h3>What is the equilibrium GDP?</h3>
This is given by the variable "Y" so we can find the equilibrium GDP by solving for it:
C = 50 + .7(Y – T)
Y = C + I + G - XN
C = Y - I - G + XN
Solving gives:
Y - I - G + XN = 50 + .7(Y – T)
Y - 40 - 35 + 10 = 50 + 0.7Y - 14
Y - 0.7Y = 50 + 40 + 35 - 10 - 14
0.3Y = 101
Y = 101/0.3
= 336.67
<h3>What is the new GDP if government spending is cut?</h3>
Government spending will have to be cut to a size that would make it equal to taxes so government spending becomes 20.
New GDP becomes:
= C + I + G - XN
= ( 50 + .7(Y – T)) + 40 + 20 - 10
= 271.67 + 40 + 20 - 10
= 321.67
Find out more on GDP at brainly.com/question/1384502.
Answer:
a. The preparation of partial amortization is shown below:-
b. $2,892
Explanation:
a. Date Lease Effective Decrease in Outstanding
payment interest balance balance
July 1 $150,000
July 1 $5,376 $5,376 $144,624
($150,000 - $5,376)
Oct 1 $5,376 $2,892 $2,484 $142,140
( $5,376 - $2,892) ($144,624 - $2,484)
b. Interest expense on October 1 = $2,892
Working Note:-
Take the outstanding balance times 2% (8% annual = 2% quarterly)
So, the Effective interest = $144,624 × 0.02
= $2,892.48
Answer:
A.
The output will rise by more than it did when the previous unit was added.
Explanation:
Answer:
$13,000
Explanation:
Calculation for what The ending balance of the Work in Process Inventory account for the Fabricating Department is:
Beginning Balance 10,000
Add Direct Materials 76,000
Add Direct Labor 24,000
Add Factory Overheads 12,000
(50% *24,000)
Less Work Transferred (109,000)
Ending Balance $13,000
Therefore The ending balance of the Work in Process Inventory account for the Fabricating Department is:$13,000
Answer:
True.
Explanation:
The statement is “True” because the Philip curve is the curve that exhibits the relationship between the inflation or price level and unemployment. If inflation rises, then unemployment falls. If inflation falls, then unemployment rises. This happens because there is a negative relationship between inflation and unemployment. However in the long run the Philip curve is a verticle line parallel to the inflation axis and that shows there is no trade-off. Thus the option A is correct.
