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Karo-lina-s [1.5K]
3 years ago
10

An economy is operating with output $300 billion above its natural level, and fiscal policymakers want to close this expansionar

y gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 3/5, and the price level is completely fixed in the short run.
Required:
1. To close the expansionary gap, the government would need ____________.
Business
1 answer:
topjm [15]3 years ago
4 0

Answer:

$120 billion

Explanation:

Economy operating at $300 billion above its natural level of output.

Marginal propensity to consume, MPC = 3/5 = 0.6

For closing this expansionary gap, the government have to decrease its spending by the amount calculated as follows:

Spending multiplier:

= 1/ (1 - MPC)

= 1/ (1 - 0.6)

= 1/ 0.4

= 2.5

Hence, the government spending reduces by

= Expansionary gap ÷ Spending multiplier

= $300 ÷ 2.5

= $120 billion

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A type of insurance that protects workers from loss wages after an industrial accident that happened on the job is called worker compensation.

  • Workers' compensation insurance offers financial aid and/or medical attention to employees who are hurt on the job or fall ill as a direct result of their work. This insurance is paid for by the employer; the employee is not expected to contribute to the cost of compensation.
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W gave w's age as 50 when w purchased a life policy. at the time of w's death seven years later, the company discovered w's true
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The normal procedure under the misstatement of age provision in regard to the payment of the death claim is that the procedure would be reduced based on the premium in which whatever it would have been if this has been purchased at the age of fifty nine years old.

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3 years ago
Read 2 more answers
A.C. Tech Manufacturing Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information
Colt1911 [192]

Answer:

A.C. Tech Manufacturing Appliances

Product Models to produce first, if management incorporates a short-run profit-maximizing strategy:

                                                 Small      Medium     Large

Selling price                             $430       $610          $1,210

Variable cost                            $270       $280         $530

Contribution                            $160        $330         $680

Fixed Costs:

Fixed manufacturing                 $40         $170          $270

Fixed selling & admin                $70         $75            $140

Unit Profit                                   $50         $85            $270

Demand in units                         150         170              150

Total profit                               $7,500     $14,450      $40,500

Machine hours/unit                     60           60             150

Total machine hours required 9,000      10,200        22,500

Unit profit per machine hour   $0.83      $1.42         $1.80

If management incorporates a short-run profit maximizing strategy, given maximum machine hours available, it should first produce the large model.

Explanation:

The large model offers better contribution per unit, better profit per unit and in total, and most importantly better profit per unit of hour (major constraint).

In making a limiting factor decision, the choice goes to the product model that produces more profit under the limiting constraint.

5 0
3 years ago
What is it meant by economies of scale?
joja [24]
Economies of scale refers to the cost advantage that emerges or become visible with higher or improved output of a product. There is an inverse relationship between the quantity proposed and per unit fixed costs therefore, if the product or good is produced in large or high quanity the per unit fixed cost goes down because it can already be shared with other large number of goods. There are two types of economics of sale, the internal and of course the external.
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3 years ago
When applying the general accounting equation, if total liabilities increased by $5,000, then (select the BEST and MOST COMPLETE
lyudmila [28]

Answer:

Assets must have increased by $5,000, or stockholders' equity must have decreased by $5,000

Explanation:

The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity.

This may be expressed mathematically as

Assets = Liabilities + Equity

As such, an increase in total liabilities by $5,000 from the options given means that assets must have increased by $5,000, or stockholders' equity must have decreased by $5,000, this way, the accounting equation stays true.

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