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mojhsa [17]
3 years ago
9

Suppose the mpc in an economy is 0.9. the apc is initially 0.95 and disposable income is $4 billion. if disposable income increa

ses to $14 billion, what is the new level of consumption?
Business
1 answer:
cluponka [151]3 years ago
8 0

Let us start by calculating the initial level of consumption. The formula for the average propensity to consume is consumption divided by income, therefore you get 0.95 = C / 4bn, giving you the consumption value of 3.8bn at the income of 4bn.

On the other hand, let us calculate the change in consumption. Recall the formula for the marginal propensity to consume being the change in consumption divided by the change in income, therefore you get 0.9 = ΔC/10bn, which gives you the change in income as 9bn. As a result, consumption increases by 9bn, therefore the new level of consumption is 9bn+3.8bn, that being 12.8bn. Hope this helps!

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7 0
4 years ago
You believe you will spend $40,000 a year for 20 years once you retire in 40 years. If the interest rate is 6% per year, how muc
boyakko [2]

Answer:

We need to save $2,964 each year until retirement to reach our retirement goal.

Explanation:

First lets assume that we have retired, we now need to find the present value of all our future cash flows, which means we need to find out the present value of 40,000 every year. We will input the following in a financial calculator.

FV=0

PMT= -40,000

I=6

N=20

Compute PV= 458,796

This PV is what present amount of the future payments we will need at the start of our retirement which is after 40 years. This represents the amount of money we need to have at the end of 40 years in order to have enough for our retirement. Which means we can use this as the future value. Now we need to find how much do we have to save each year so we have 458,796 at the end of 40 years.

In a financial calculator we will input the following.

FV= 458,796

PV=0

I=6

N=40

Compute PMT= 2,964

We need to save $2,964 each year until retirement to reach our retirement goal.

6 0
4 years ago
The tracking of inventory shrinkage due to theft, damage, or errors is done with the help of a (n) ________ of inventory.
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Answer is physical count. Hope this helps. :)
5 0
3 years ago
Kennedy Company reports the following costs and expenses in May. Factory utilities $ 13,500 Direct labor $79,100 Depreciation on
Pie

Answer:

(a) $158,350

(b) $395,050

(c) $79,140

Explanation:

(a) Manufacturing overhead:

= Factory utilities + Depreciation on factory equipment + Indirect factory labor +  Indirect materials + Factory manager's salary + Property taxes on factory building + Factory repairs

= $ 13,500 + $12,650 + 48,900 + 70,800 + 8,000 + 2,500 + 2,000

= $158,350

(b) Product costs:

= Total Manufacturing overhead + Direct material used + Direct labor

= $158,350 + $157,600 + $79,100

= $395,050

(c) Period cost:

= Depreciation on delivery truck + Sales salaries + Repairs to office equipment + Advertising + Office supplies used

= 3,800 + 48,400 + 1,300 + 23,000 + 2,640

= $79,140

8 0
3 years ago
In two or more complete sentences, compare and contrast making a purchase with a debit card versus making a purchase with a cred
Vlad [161]

Answer:

When you pay with a credit card you use the bank's money that you have to pay back but with a debit card, you are using money straight out of your account. In the end, you are basically using your money just not in the form of paper.

Explanation:

When you pay with a credit card you use the bank's money that you have to pay back but with a debit card, you are using money straight out of your account. In the end, you are basically using your money just not in the form of paper.

3 0
2 years ago
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