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Nookie1986 [14]
3 years ago
5

If the economy experiences a recession with a current spending gap $1,000 below full-employment output, and the marginal propens

ity to consume is 0.8, how much must government increase spending to restore the economy to full-employment GDP?
Business
1 answer:
gtnhenbr [62]3 years ago
5 0

Answer:

Change in Investment  (Government Spending) = $200

Explanation:

Multiplier = k =∆Y/∆I = 1/(1-MPC)

Needed ∆Y = $1000  ;  MPC = 0.8

1000/ ∆I = 1 / (1-0.8)

1000/∆I  = 1 / 0.2

1000/∆I  = 5

∆I  = 1000/5

∆I = 200

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olga_2 [115]

Answer:

C. 20.00 percent

Explanation:

The computation of the accounting rate of return is shown below:

The formula to compute the accounting rate of return is shown below:

= Annual net income ÷ initial investment

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The depreciation expense is

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6 0
3 years ago
In a concentrated network configuration:
seraphim [82]

Answer:

B

Explanation:

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The correct answer to this question is that in a concentrated network configuration, firms allow each site on the network to operate with full autonomy.

What this means is that each site in the network operate independently of the other sites.

A site is thus an autonomous entity but still part of the concentrated network

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3 years ago
Predetermined Factory Overhead Rate Exotic Engine Shop uses a job order cost system to determine the cost of performing engine r
Law Incorporation [45]

Answer:

7.7 per direct labor hour

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Number of direct labor hours = 700,000 / 25

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Predetermined overhead rate = Overhead cost/Direct labor hours

= 215,600 / 28,000 labor hours

= 7.7 per direct labor hour

5 0
3 years ago
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kumpel [21]
The M/B ratio is the ratio between the market value and the book value.<span>  It is </span><span>one indicator used to measure the worth </span>
It is false that the average firm in each industry must have an M/B ratio that is equal to 1.0
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3 years ago
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