Answer: reduced by $80 billion
Explanation:
An expansionary gap is when the actual output is more than the potential output. From the question, we are told that an economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap and that the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out.
We are also given the marginal propensity to consume is 4/5, and told that the price level is completely fixed in the short run.
To close the expansionary gap, the government would need to reduce its spending. To solve this, we have to calculate the multiplier. This will be:
Multiplier = 1/(1 - MPC)
= 1/(1 - 4/5)
= 1/1-0.8
= 1/0.2
= 5
Therefore, the government expenditure or spending will be reduced by:
= $400 billion/5
=$80 billion
Answer:
D) An efficient and fair way to help poor
<h3><u>Hope </u><u>this </u><u>helps </u><u>you </u></h3>
Answer:
JANUARY FEBRUARY
TOTAL SALES $410,000 $430,500
Explanation:
for January
number of luggage set sold 2000
price for each set = $205
sales for month January = 205*2000 = $410,000
for February
number of luggage set sold 2100
price for each set = $205
sales for month February = 205*2100 = $430,500
JANUARY FEBRUARY
TOTAL SALES $410,000 $430,500
Answer:
The correct answer to the following question is option B) both statements i and ii are correct.
Explanation:
First of all the marginal product can be defined as the additional unit of product that a business can produce by using additional unit of input. And marginal revenue product refers to the change that occurs in the total revenue due to the production of additional unit of product.
Any competitive firm would hire additional workers only when the MRPL (marginal revenue product of labor) is greater than the wages paid to that labor and additional cost incurred in hiring those workers and they would stop hiring the workers when the MRPL is equal to the cost paid to the workers.
Answer:
c. $1,890
Explanation:
As for the provided information, we have
Net income is the income after allowing expenses of every nature, and after taxes, but does not include the dividend as is not an expense but allocation or distribution of profits.
Thus net income shall be as follows:
Sales - Expenses
Sales = $10,000
Expenses = $4,000 + $1,100 + $1,750 = $6,850
Profit before taxes = $3,150
Less: Taxes @ 40% = $1,260
Net Income = $1,890
Correct option is
c. $1,890
