I would think money,supply or demand?
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: Option A
Explanation: Sales promotion is the method of convincing a prospective consumer to buy the commodity. Sales promotion is intended to be used as a brief-term tool to boost sales – it is seldom appropriate as a way to develop long-term customer retention.
Giving discount, rebates and other such special offers are some of the many examples of sales promotion. In simple words,it is done to boost the sales for the current period.
In the given case, Amazon is also offering money saving offers to attract customers. Hence we can conclude that this is an example of sales promotion.
Answer:
c) $25
Explanation:
<em>The value of a preferred stock is the present value of the constant dividend payable for the foreseeable future discounted at the required rate of return</em>
Price = Constant dividend/ required return
The constant dividend = Dividend rate × par value
Dividend as be given as $5 per share
requited return - 20%
So the price of the stock would be
Price = 5/0.2
= $25
In the scenario in which an investigator wants to see whether packaging information affects the way teenagers rate the effectiveness of soap, the color of wrapper in addition to the intended independent variable might influence the results. The three different packages are in different colors : pink, red and white.
