Answer:
The correct answer is option c.
Explanation:
The marginal propensity to consume or MPC measures the change in consumption or consumer spending due to a change in the disposable income of the consumer.
The disposable income is the income left with consumers after paying taxes and transfers.
It is calculated as the ratio of change in consumption to change in income. It is written as
MPC =
The MPC is higher at lower incomes.
Answer: The retrieval set
Explanation:
Margo in her purchasing decision, is making use of her retrieval set, to recall the computers she has seen on adverts.
Retrieval set enables a buyer to remember a product, that he/she intends buying, as a result of the product being something the buyer is familiar with.
Adverts are good tools used by marketers to feed consumers retrieval set on their products.
Answer:
Option (D) is correct.
Explanation:
Expected cash flow in year 1 : C1 = (0.5 × 90,000) + (0.5 × 117,000)
= 103,500
Discount rate, r = Project's WACC = 15%
Hence, Value of the project today = Vp = C1 ÷ (1 + r)
= 103,500 ÷ (1 + 15%)
= $90,000
Value of equity today : Ve0 = Vp - Debt
= 90,000 - 60,000
= 30,000
Value of equity in year 1 = Project cash flows - Debt × (1 + interest rate)
Weak economy = 90,000 - 60,000 × (1 + 5%)
= 27,000
Strong economy = 117,000 - 60,000 × (1 + 5%)
= 54,000
Expected value of equity in year 1 : Ve1 = (0.5 × 27,000) + (0.5 × 54,000)
= 40,500
Hence, Levered cost of equity, Ke = (Ve1 ÷ Ve0) - 1
= (40,500 ÷ 30,000
) - 1
= 35%
Answer:
B) Economic conditions were more severe after the crash of 1929 even though the decline in the market in 1987 was twice as large as the decline in the market in 1929.
Explanation:
The market crash of 1987 was not only larger in total volume, but also was much larger in percentage than the market crash of 1929. On October 19, 1987, the Dow Jones lost more than 22.6% of its value, but the consequences were not nearly as bad as what happened after the market collapsed in 1929.
The problem with the crash of 1929, was that it involved several aspects of the economy and wasn't a single day event. The economy back in the 1920s was like a balloon being filled with water, but it didn't burst at once, it started to leak. As the balloon leaked, the whole economic system started to collapse mainly because the balloon wasn't filled with water, but rather it was filled with speculation and when investors realized that all their money was built over sand castles, they started to panic. And as the days went by and no solution was apparent, panic grew and it spread to all the economy.
It is sometimes really hard to position ourselves very many years ago when the rules and laws regarding economic activities were different, since we tend to believe that things have always been like they are now. But back then, things were much different and the rules regarding the economy were basically non-existent, so a lot of manipulation and corrupt practices existed.
Answer:
e. $3,000 short-term capital loss (STCL)
Explanation:
From the given information;
Tim may deduct only $3,000 short-term capital loss (STCL) because the loan is not business-related. SO, he can claim a maximum of $3000 in the current year and the remaining can be forwarded to ordinary income on the individual return in any one tax year.