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3 years ago

what happens to aggregate output if both taxes and government spending are lowered by $300 billion and mpc

Business

1 answer:

Papessa [141]3 years ago

3 0

Answer:

The answer is:

1. consumers' expenditure increases by $150 billion

2. output will decrease by $600 billion

Explanation:

Tax impact:

$300 billion x 0.5

= $150 billion.

If taxes are lowered by $300 billion, consumers' expenditure increases by $150 billion because with lower tax, there is money money to be spent because their disposable income has increased.

Government spending impact:

$300/(1-0.5)

$300/0.5

=$600 billion.

Due to government spending that has increased by this amount, output will decrease by this amount too because government has directly competed with firms that should have used this money to increase the total output.

Therefore, net effect on total output is $300billion($600 - $300)

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Which of the following is NOT a factor in the phenomenon of online shoppers abandoning their shopping carts and not following th

Alona [7]

Answer: Option E

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However the long lines for billing and other such lengthy procedures make it difficult.

Hence from the above we can conclude that the correct option is E.

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3 years ago

The Department of Justice and the Federal Trade Commission must define the relevant market when determining whether to allow a m

emmainna [20.7K]

Answer:

The correct answer is letter "B": a price increase results in higher profits; otherwise, the market is too narrow.

Explanation:

When firms are interested in acquisitions or mergers they have to determine if the target company is part of a relevant market. The term refers to the competitive conditions that offer the economy where the target company is located. The relevant market also considers the type of product or service the target company offers.

Relevant markets optimal for mergers are those where an increase in prices generates more revenue for firms. If there are too many competitors offering undifferentiated products, the market will not allow organizations to profit from price increases. Those markets, then, are too narrow.

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3 years ago

Adam Plastics, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materi

inysia [295]

Answer:

c. $385,958.90

Explanation:

Step 1 Determine the Total Cost Incurred for Both materials and Conversion

Raw Materials

Opening Work In Process $200,000

Add Cost Added during the year $2,000,000

Total $2,200,000

Conversion

Opening Work In Process $200,000

Add Cost Added during the year $2,500,000

Total $2,700,000

Step 2 Determine the total equivalent units for materials and conversion

Materials

Closing work in process 100 × 100% = 100

Completed and Transferred (600+200-100)×100% =700

Total =800

Conversion

Closing work in process 100 × 30% = 30

Completed and Transferred (600+200-100)×100% =700

Total =730

Step 3 Determine equivalent cost per unit of materials and conversion costs

Materials = $2,200,000/800 = $2,750

Conversion = $2,700,000/730 = $3,699

Step 4 Determine the cost assigned to Ending WIP

Materials ($2,750×100) = $275,000

Conversion Cost ($3,699×30) = $110,970

Total =$385970

5 0

3 years ago

Exercise 169 Yates Manufacturing Company incurs the following manufacturing costs and expenses during the month of May. 1. Assem

Alchen [17]

Answer:

1. Assembly line wages - Direct labor, manufacturing cost

2. Raw material used directly in product - Direct material, manufacturing cost

3. Depreciation on office equipment - In direct, Administrative cost

4. Property tax on factory building - Indirect, Manufacturing cost

6. Sales commission - Selling cost

7. Depreciation on factory equipment - Direct, Manufacturing cost

8. Factory utilities - Administrative cost

9. Wages for factory maintenance workers - Direct, Manufacturing cost

10. Advertising - Selling cost

11. Indirect material used in production - Indirect, Manufacturing cost

12. Factory manager's salary - Administrative cost

Explanation:

The cost which is affected by the production of units is known as variable cost. The cost which does not vary with the units produced is fixed cost.

The costs which are related to selling and storage of the finished goods is selling cost. The cost which is not affected by units produced and is related to office premises and controlling an organization is administrative cost. The cost which varies with the production of units and is incurred to convert raw material into finished goods is manufacturing cost.

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3 years ago

The following transactions occur for Cardinal Music Academy during the month of October:

tamaranim1 [39]

Answer:

The entries to record the transactions are given below.

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CreditService Revenue income $ 7000

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Debit Prepaid Insurance equipment Asset $ 3000

Credit Cash Asset $ 3000

c. Purchase musical equipment for $10,000 cash.

Debit Equipment Asset $ 10,000

Credit Cash Asset $ 10,000

d. Obtain a loan from a bank by signing a note for $10,000

Debit Cash Asset $ 10,000

Credit Notes payable $ 10,000

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3 years ago