Answer:
For the Economist A the spending multiplier is = 8, the tax multiplier = 4, the increase in spending is = $4 billion, the tax cut is = $8 billion.
For the Economist B, the spending multiplier is =4, the tax multiplier = 2, the increase in spending is = $8 billion, the tax cut is = $16 billion.
Explanation:
Solution
Given that:
(1)The Economist A
The Spending multiplier = 8
In closing the output gap of $32 billion, required increase in spending = $32 billion / 8 = $4 billion
Thus,
The tax multiplier = 4
To close output gap of $32 billion, required decrease in tax = $32 billion / 4 = $8 billion
(2)The Economist B
Now,
The spending multiplier = 4
To close output gap of $32 billion, required increase in spending = $32 billion / 4 = $8 billion
So,
Tax multiplier = 2
To close output gap of $32 billion, required decrease in tax = $32 billion / 2 = $16 billion
Answer:
The correct answer is option c.
Explanation:
An increase in the price of oil will cause the quantity demanded of a commodity to decline and the quantity supplied to increase. This will cause a surplus in the market.
There will be no change in the demand and supply curve.
This is because of the law of demand and supply.
According to the law of demand, the price of a commodity is inversely related to the quantity demanded of the commodity, while other factors are kept constant.
Similarly, the law of supply states that the price of a commodity is positively related to the quantity demanded of a commodity.
The demand and supply curves are not affected by the changes in price, they change as a result of changes in other factors.
It's hehhdfsjgsisgdsjsb,gvsjsvgsgejdnxgndjdgdusjehgsnskhsgzjosbdjd there's the answer XD
Answer:
Yes she should purchase this preferred stock.
Explanation:
Return on investment as a percentage = return/capital invested * 100
For Aeryn to decide whether she should purchase this preferred stock, its return on investment should be higher than or equal to 8%. The return on investment of this preferred stock is $40/$475 * 100 = 8.42%, which is higher than her required return therefore she should purchase the preferred stock.