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ddd [48]
3 years ago
10

If the tax multiplier is minus1.5 and a​ $200 billion tax increase is​ implemented, what is the change in​ gdp, holding all else

​ constant? ​ (you may assume the price level stays​ constant.)
a. a​ $300 billion increase in gdp
b. a​ $300 billion decrease in gdp
c. a​ $133.33 billion decrease in gdp
d. a​ $30 billion increase in gdp
e. a​ $133.33 billion increase in gdp
Business
1 answer:
3241004551 [841]3 years ago
6 0
Tax multiplier = -1.5
Tax increase = $200 billion

Therefore, since the multiplier is a negative value, the GDP must have gone down.

GDP = Tax increase/Tax multiplier  = 200/-1.5 = $133.33 billion decrease.
Then, the correct answer is c.
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8 0
3 years ago
Indicate what happens to each of the following when the price level​ decreases:
aleksklad [387]

Answer:

a. Consumption will increase as goods and services are now cheaper for people to buy.

b. Investment increases as people will have more money to invest due to having spent less on consumption.

c. Net exports increases as exports become cheaper due to lower prices in the country. More people outside will therefore demand exports leading to them increasing more than imports.

d. Money Demand - B. There is a movement along the Money Demand curve to the Left

As price has decreased, the amount of money needed to buy goods will decrease which would lead to less demand for money. Money demand curve will show this as a movement to the left of the Money demand curve.

e. The interest rate will decrease because there will be more money to invest as explained above. With more money to invest, loanable funds will b in high supply thereby dropping interest rates.

f. Aggregate expenditure shifts right to show that expenditure has increased from people buying cheaper goods.

g. Aggregate demand - B. AD shifts to the Right.

More people will demand goods and services because they are cheaper.

8 0
3 years ago
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7 0
2 years ago
A company produces a single product. Variable production costs are $12.10 per unit and variable selling and administrative expen
rosijanka [135]

Answer:

Ending inventory cost= $5,445

Explanation:

Giving the following information:

Variable production costs are $12.10 per unit

Assuming a beginning inventory of zero, production of 4,100 units and sales of 3,650 units.

<u>Under the variable costing method, the unitary product cost is the sum of direct material, direct labor, and variable overhead. In this case is $12.1</u>

We need to calculate the number of units in inventory:

Ending inventory in units= 4,100 - 3,650= 450 units

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4 0
3 years ago
A company purchased $2,000 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $300 worth of merchandise. On
wlad13 [49]

Answer:

The correct journal entry to record the payment on July 12 is:

Debit Accounts Payable $1,700

Credit Merchandise $34

Credit Cash $1,666

Explanation:

Credit terms of 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

On July 5:

Debit Merchandise $2,000

Credit Accounts payable $2,000

On July 7:

Debit Accounts payable $300

Credit Merchandise $300

On July 12, the company pays and takes the appropriate discount:

2% x ($2,000 - $300) = $34

The company uses a perpetual inventory system, and records purchases using the gross method.

The journal entry to record the payment:

Debit Accounts Payable $1,700

Credit Merchandise $34

Credit Cash $1,666

8 0
3 years ago
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