Answer:
7.8% increase in revenue
Explanation:
Revenue is given by the number of units sold 'n' multiplied by the price of sale 'P'. The revenues before and after the price drop are:
The change in revenue is given by:
Therefore, there was a 7.8% increase in revenue when price falls by 2%.
Answer:
Option (b) is correct.
Explanation:
The Journal entries are as follows:
(i) On November 1, 2015
Retained Earnings [$3 × 20,000] A/c Dr. $60,000
To Dividend Payable $60,000
(To record the declaration of dividend)
(ii) On November 30, 2015
Dividend Payable A/c Dr. $60,000
To cash A/c $60,000
(To record the payment of dividend)
Answer:
450 billion
Explanation:
Marginal Propensity to consume (MPC) is a ratio that measure much the investment in the economy is consumed.
Marginal Propensity to save (MPS) is a ratio that measure much the investment in the economy is saved
Marginal Consumption = $500 billion - 450 billion = 50 billion
Spending ratio = 50 / 500 = 0.1
Marginal Propensity to consume (MPC) = 0.1
Marginal Propensity to save (MPS) = 1 - 0.1 = 0.9
Spending Multiplier = 1 / MPS = 1 / 0.9 = 1.11
First Round of Multiplier
Spending 500 billion increase income 500 billion
after consuming 50 billion
In second round Spending 450 billion will increase the income by 450 billion