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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

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AleksandrR [38]
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6 0
3 years ago
Executives of Studio Recordings, Inc., produced the latest compact disk, the Starshine Sisters Band, titled Starshine/Moonshine.
Alexxandr [17]

Answer:

a) Contribution margin= $6,4

b) break-even point:

in units=76562 cds

in dollars=$869058

c) Net profit= $5910000

d) Q=107813 cds

Explanation:

Variable costs:

CD package and disc $1.25/CD

Songwriters’ royalties $0.35/CD

Recording artists’ royalties $1.00/CD

<u>Total Variable costs= $2,6</u>

Fixed Costs:

Advertising and promotion $275,000

Studio Recordings$215,000

Total fixed costs= $490000

Price=$9

a) contribution margin= Price- variable costs= 9-2,6= $6,4

b) break-even point:

in units=fixed costs/contribution margin=490000/6,4= 76562 cds

in dollars= fixed costs/(contribution to sale ratio)

in dollars= fixed costs/(contribution margin/price)

in dollars= 490000/(6,4/9)= $869058

c) q=1000000

sales= 9000000           (1000000*9)

variable costs= -2600000      (1000000*2,6)

fixed costs= -490000

Net profit= $5910000

d)Profit= 200000  q=?

using the break-even formula

Q=(fixed cost+profit)/contribution margin

Q=690000/6.4=107813 cds

7 0
3 years ago
Why is there a need to assess one's PECs in terms of characteristics,attributes,lifestyle,skills traits before starting a partic
Vladimir79 [104]

Answer:

Explanation:

PECs stands for <em>Personal Entreprenurial Competencies.</em>

It is important to evaluate them because they have a way of predicting how successful one would be in a particular business.

Some of these attributes include but are not limited to the following:

  • Ability to Influence other People: People here refer to customers, public and even staff.

  • Self-Confidence: Confidence in one's abilities is key for survival in any business or endeavour.

  • Persuasion: Persuasion goes hand in hand with influence and Self-Confidence. It's almost impossible to influence other people if ones does not have self-confidence or lacks the strategy to do so.

  • Efficiency Orientation: The best entrepreneurs known how to create value from little or nothing.

  • Problem Solving: This is one of the greatest skills of an Entrepreneur. The higher they go on this trait, the more their chances of success.

  • Information Seeking: This is not just about reading. It refers to ones ability to seek related intelligence within and outside of one's environment. Good intelligence contributes to great decision making.

  • Ability to spot and utilize Opportunities: This is two traits combined in one. Spotting opportunities is overrated. Ability to organise internal and external resources in order to translate such opportunities into value is priceless.

  • Grit: Also known as persistence. This is key and is required for any idea which is receiving efforts to come to fruition.

Cheers!

8 0
3 years ago
Workers and firms often enter into contracts that fix prices or wages, sometimes for years at a time. If the price level turns o
GalinKa [24]

Answer: Contract are mostly prevalent in the Union jobs which are the jobs in which employees are represented by an organizations which act as an intermediary between the employees and their employers.

This is done in order to ensure that employees are protected from future inevitable inflation that may come unexpectedly as it usually does.

3 0
3 years ago
Hale Company sells merchandise on account for $1,000 to Long Company with credit terms of 2/10, n/30. Long Company returns $200
Vladimir79 [104]

Answer:

Amount of Check = $784

so correct option is a. $784

Explanation:

given data

Merchandise on account = $1,000

Long Company returns  = $200

credit terms =  2/10

n/30

to find out

What is the amount of the check

solution

we know here that Total Merchandise will be

Total Merchandise = Merchandise on account  - returns   ....................1

Total Merchandise = $1000 - $200

Total Merchandise = $800

and

discount will be here

Discount = 0.02  ×  800

returns = $16

so

Amount of Check will be as

Amount of Check = Total Merchandise - Discount   ...................2

put here value

Amount of Check = Total Merchandise - Discount  

Amount of Check = $800 - $16

Amount of Check = $784

so correct option is a. $784

7 0
3 years ago
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