If the government cuts taxes by $40 billion, this puts more money in consumers' pockets. Given an MPC of 0.8, this means they will spend $32 billion
Evaluating :
(0.8 × $40 = $32).
The correct answer is an increase of $32 billion.
GDP:
Gross domestic product (GDP) is a measure of the final goods and services produced with a specific region over a specified period of time. It is computed as follows:
GDP = Consumption + Government Spend + Investment + Net Exports
What is Marginal Propensity to Consume (MPC)?
Marginal propensity to consume (MPC) is measured as the portion of an increase in pay that a consumer would spend on goods and services as opposed to saving. Essentially, it is measuring how sensitive consumption in an economy is to increases in income. MPC is important in economics because it illustrates the effect that increased government spending has on the economy.
Learn more about Marginal propensity :
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Answer:
True
Explanation:
Current Ratio: The current ratio shows a relationship between the current assets and the current liabilities. The formula is shown below:
Current ratio = (Total Current assets ÷ total current liabilities
)
Quick Ratio: The quick ratio shows a relationship between the quick assets and the current liabilities. The formula is shown below:
Current ratio = (Quick assets ÷ total current liabilities)
where,
Quick assets = Current assets - inventories - prepaid insurance
So, the given statement is true
Answer:
In Utah’s Arches National Park we can see many interesting shapes like this one. Many different things helped to shape this arch: earthquakes, rivers, freezing water, and wind. Only one of these made the surface of the arch smooth and rounded. That was
Explanation:
Answer:
The correct answer is A)NPV would be understated.
Explanation:
NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
The Salvage value is added at the end of the cash flow. So is a cash inflow.
And if we ignore salvage value the difference, the cash inflows will be smaller, so the NPV would be understated.
