1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Elan Coil [88]
3 years ago
13

If the marginal propensity to save (MPS) is 0.25, investment spending (I) is $600 million, and the government increases its purc

hases of goods and services (G) by $150 million, then real GDP increases by
A) 200 million
B) $600 million
C) $800 million
D) $2,400 million
Business
1 answer:
trasher [3.6K]3 years ago
8 0

Answer: Option (b) is correct.

Explanation:

Given that,

Marginal propensity to save (MPS) = 0.25

Investment spending (I) = $600 million

Government purchases increases by $150 million

MPC - Marginal propensity to consume

MPC + MPS = 1

MPC = 1 - 0.25

= 0.75

Government spending multiplier = \frac{1}{1 - MPC}

= \frac{1}{1 - 0.75}

= 4

Increase in Real GDP = Government spending multiplier × Increase in government purchases

= 4 × 150

= $600 million

You might be interested in
Which business model sells goods or services to buyers who then resell or use them for business purposes?
astra-53 [7]

Answer:

<u>wholesalers, distributors and manufacturers</u>.

Explanation:

The <u>wholesalers, distributors, and manufacturers</u> trade goods or services to consumers, which then resell or utilize them for trading persistence. Resellers purchase goods in a large amount from other companies such as wholesalers, distributors, and manufacturers. Later they trade the singular factors to purchasers, at a favorable cost. Thou won’t gain enough hype throughout reselling. That’s the conventional method of retailing, which we distinguish from most utmost huge mall storehouses autonomous independent online stores.

5 0
3 years ago
Parkway Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the Work-in-Process Inventory
IRINA_888 [86]

Answer:

$ 13.167 / unit

Explanation:

Data provided:

Beginning material cost = $ 126,000

Number of units in work in progress = 12,000 units

Material cost assigned = $ 32,000

thus,

the total material cost involved = $ 126,000 + $ 32,000 = $ 158,000

Now,

the material cost per equivalent unit = Total material cost involved / number of units

on substituting the values, we have

the material cost per equivalent unit = $ 158,000 / 12,000

or

= $ 13.167 / unit

7 0
3 years ago
Up in Smoke Tobacco Shops' bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is th
lara [203]

Answer:

10%

Explanation:

Since the bond is selling at a discount, it means that the coupon rate is blow the market rate, so the actual rate must be higher. Since there is only one option with an interest rate above 9%, we must check to see if it works.

10% yearly interest rate = 5% semiannual interest rate

we must determine the PV of the 20 coupons paid and the face value at maturity.

to calculate the PV of the 20 coupons ($45 each) we can use an excel spreadsheet and the NPV function with a 5% discount rate: PV of the coupons = $560.80

the PV of the face value in 10 years = $1,000 / 1.05²⁰ = $376.89

the present value of the coupons and the bond at maturity = $560.80 + $376.89 = $937.69. The PV using a 5% semiannual rate is very similar to $937.75, and since the question asked us to round up to the nearest whole percent, we can assume it is correct.

6 0
3 years ago
The pharmaceutical industry often justifies the high prices for new drugs by arguing that they research as many as one hundred n
gizmo_the_mogwai [7]
Blockbuster is your answer
3 0
3 years ago
Associated Breweries is planning to market alcohol-free beer. To finance the venture it proposes to make a rights issue at $10 o
Tomtit [17]

Answer:

Number of new shares:

= 100,000×(1÷2)

= 50,000

Amount of new investment:

= 50,000×$10

= $500,000

Total value of company after issue:

= $500,000+100,000×$40

= $4,500,000

Total number of shares after issue:

= 100,000+50,000

= 150,000

Share price after issue:

= $4,500,000÷150,000

= $30

3 0
3 years ago
Read 2 more answers
Other questions:
  • Farrel Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just compl
    13·1 answer
  • according to the rule of 72, if Beth invests $200 and $1300 into two separate accounts with the same interest rate, which amount
    7·2 answers
  • Irene plans to retire on January 1, 2020. She has been preparing to retire by making annual deposits, starting on January 1, 198
    13·1 answer
  • uppose you observe the following exchange rates: €1 = $1.50; £1 = $2.00. Calculate the euro-pound exchange rate. A. €1.25 = £1.0
    6·1 answer
  • Why are conflicts of interests a problem in business? (Select the best answer.)
    12·2 answers
  • Nolan is applying for a promotion within his company. The formal statement about the job says that he must have a four-year coll
    10·1 answer
  • A city assesses property owners $50 million to extend sewer lines to their neighborhood. By year-end, however, it has not begun
    12·1 answer
  • What are the similarities between the scientific theory and the human relations theory
    7·1 answer
  • Kim-Lee founded a software development company at the age of 27. Over time, he developed the company into a multibillion-dollar
    14·1 answer
  • Tactical managers are often referred to as _____ managers
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!