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
Helen [10]
3 years ago
5

Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the eco

nomy of this country in billions of dollars, where C is consumption, DI is disposable income, I is investment, and G is government purchases:
C = 30+0.6 X DI

G = 120

I = 70

Assume that this economy initially has a fixed tax and that net taxes (taxes minus transfer payments) are $100 billion. Disposable income is then Consider a small country that is closed to trade, , where Y is real GDP. Aggregate output demanded is __________- .

Suppose the government decides to increase spending by $10 billion without raising taxes. Because the expenditure multiplier is_______ , this will increase the economy's aggregate output demanded by__________ .

Now suppose that the government switches to an income tax, which is a type of variable tax, of 25%. Because consumers retain only 75% of each additional dollar of income, disposable income is now . In this case, the economy's aggregate output demanded is________ .

Given an income tax of 25%, the expenditure multiplier is approximately . Therefore, if the government decides to increase spending by $10 billion without raising tax rates, this would increase the economy's aggregate output demanded by approximately__________ .

A $10 billion increase in government purchases will have a larger effect on output under a__________ (Answer one of these two??Variable tax of 25% or is it a fixed tax of 100 Billion) .
Business
1 answer:
viva [34]3 years ago
8 0

Answer:

Y = 300

government multiplier 2

output demanded increase by 20

If income tax is applied:

Y = 272.72

multipliers: 2.253775

increase 22.53775 billons

As disclosure it has a larget effect when the income tax is levied based on income rather than a flat rate.

Explanation:

DI = Y - 100

C = 30 + 0.6(Y - 100)

C = 30 - 60 + 0.6Y

C = 0.6Y - 30

Y = C + G + I

Y = (0.6Y -30) + 120 + 30

Y = 120 / 0.4 = 300

C = (0.6)300 - 30 = 150

With C we solve for the multiplier:

150/300 = 0.5

1 / (1 - 0.5) = 2

10 x 2 = 20

If variable that:

C = 30 + 0.6 (0.75Y)

C = 30 + 0.45Y

Y = 0.45Y + 120 + 30

Y = 150/.55 = 272,72

C = 30 + 0.45Y = 152,72

Propensitivity to consume:

152.72/272.72 = 0,5563

multiplier:

1 (1 - PMC) = 2.253775073

10 nillon will icnrease x 2.25377 = 22.54 billons

You might be interested in
Reddit, Digg, and StumbleUpon are examples of popular
Arte-miy333 [17]

Answer:

social bookmarking sites

Explanation:

Reddit, Digg and StumbleUpon are all Web sites dedicated to social bookmarking.

They fetch the contents from other Web sites and encourage their users to share their preferences on what they like and see all over the Internet with their friends.

They're not social networks per say because people aren't directly in contact with each other, only through their shared contents.

They're not tech blogs, because they rarely have any original contents and they're not targeting only technologies.

They're not video sites either, because they're sharing all kinds of contents.

8 0
2 years ago
When the unemployment rate is at a steady state: Group of answer choices the number of people finding jobs exceeds the number of
liraira [26]

Answer:

The number of people finding jobs equals the number of people losing jobs.

Explanation:

Unemployment rate can be defined as the percentage of unemployed workers that are present in the the labor force. The Labor force of a country comprises of both employed and unemployed individuals that are present in the country. Unemployment rate can also be described as the percentage of the total workforce of a country that is yet to be gainfully employed.

High unemployment rate poses an adverse effect on the economy, it leads to an increase in crime rate this is due to the fact that unemployed individuals have no source of income to take care of their respective families and as such have to turn to the life of crime inorder to earn money.

7 0
3 years ago
As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $940,000 and liabilities of $300
Anvisha [2.4K]

Answer:

Th answer is: net income for year 2 is $45,000

Explanation:

We must first determine the equity for both years (equity= assets - liabilities)

  • Equity year 1 = $940,000 - $300,000 = $640,000
  • Equity year 2 = $995,000 - $270,000 = $725,000

Then we calculate the change in equity:

  • change in equity = $725,000 - $640,000 = $85,000

Finally to determine the net income or year 2 we use the following formula:

Net income (Y2)= change in equity - additional investments + dividends paid

net income (Y2) = $85,000 -$73,000 + $33,000 = $45,000

4 0
2 years ago
If in the economy, business saving equals $240 billion, household saving equals $15 billion and government saving equals -$150 b
Marrrta [24]

Answer:

$105 billion

Explanation:

We know that

The national saving equal to

= Private saving + public saving

where,

Private saving = Business saving + household savings

                        =$240 billion + $15 billion

                        = $255 billion

And, the public saving would be -$150 billion

So, the national saving would be

= $255 billion - $150 billion

= $105 billion

6 0
3 years ago
The current assets of Sheridan Company are $292400. The current liabilities are $116960. The current ratio expressed as a propor
Varvara68 [4.7K]

The current ratio expressed as a proportion is 2.5

Explanation:

Given :

The current assets = $292400

The current liabilities are $116960.

To find :

The current ratio

Solution :

Current Ratio =

\sf{\dfrac{Current \: Assets }{Current \: Liabilities}}

\sf{\implies{\dfrac{292400}{116960}}}

\implies 2.5

Therefore, The current ratio expressed as a proportion is 2.5

4 0
3 years ago
Other questions:
  • Les' Motors has sales of $482,800, cost of goods sold of $297,400, inventory of $169,600, and accounts receivable of $52,900. Ho
    5·2 answers
  • Northwest Fur Co. started the year with $96,000 of merchandise inventory on hand. During the year, $430,000 in merchandise was p
    9·1 answer
  • Problem statements in business reports are most effective when their matter-of-fact tone downplays the urgency of the problems.
    6·1 answer
  • The former CEO of Sam's Club, a division with its own profit-and-loss responsibility, Rosalind Brewer, reported to Walmart's CEO
    14·1 answer
  • g Question 1 of 1010.0 Points A company's unethical behavior may result in the following except A. buyers will shun the company
    5·2 answers
  • Suppose you are considering the purchase of an apartment building that has 12 units that can be rented out at $1,050 per month.
    7·2 answers
  • Freeman, Inc., reported net income of $40,000 for 2015. However, the company's income tax return excluded a revenue item of $3,0
    13·1 answer
  • Use the cost information below for Sundar Company to determine the cost of goods manufactured during the current year:
    8·1 answer
  • Your boss would like your help on a marketing research project she is conducting on the relationship between the price of juice
    9·1 answer
  • ________ is the public relations function which involves reacting to negative events.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!