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
Paul [167]
3 years ago
9

Suppose disposable income increases by $2,000 . As a result, consumption increases by $1,500 . Answer the questions based on thi

s information. Where appropriate, enter your answer as a decimal rather than as a percentage.
(a) The increase in savings resulting directly from this change in income is $ ____
(b) The marginal propensity to save (MPS) is The marginal propensity to consume (MPC) is ____
Business
1 answer:
antiseptic1488 [7]3 years ago
7 0

Answer:

$500

0.25

0.75

Explanation:

It is assumed that disposable income is either saved or consumed.

Disposable income = Consumption + Savings

Savings = Disposable income - Consumption

= $2000 - $1500 = $500

MPS = Savings ÷ Income

= 500 ÷ 2000 = 0.25

MPC = Consumption ÷ Income

= 1500 ÷ 2000 = 0.75

MPS + MPC = 1

Alternatively: MPC = 1 - MPS = 1 - 0.25 = 0.75

You might be interested in
A keynote speaker was known for his many speaking engagements, but now he has limited time and a rational mind. Even he would ev
yawa3891 [41]

Answer: B. the additional enjoyment of one more speaking engagement (the marginal benefit) is rising.

6 0
3 years ago
Time Value of Money: Basics Using the equations and tables in Appendix 25A this chapter, determine the answers to each of the fo
kow [346]

Answer:

Present value (PV) = $3,000

Interest rate (r) = 6% = 0.06

Number of years (n) = 2 years

Future value (FV) = ?

FV = PV(1 + r)n

FV = $3,000(1 + 0.06)2

FV = $3,000(1.06)2

FV= $3,000 x 1.1236

FV = $3.370.80                                                                                                                                                                                                                                                                                    

Explanation:

In this case, there is need to compound the present value for 2 years at 6% interest per annum. The formula to be applied is the formula for future value of a lump sum (single investment).

6 0
3 years ago
Which of the following statements is CORRECT? a. The present value of a 3-year, $150 annuity due will exceed the present value o
lorasvet [3.4K]

Answer:

Statement a. is correct.

Explanation:

The effective annual rate is always higher than the nominal interest rate, as the formula is clear for any number of periods, for any interest rate:

Effective Annual Rate of return = (1 + \frac{i}{n})^n - 1

Further if we calculate the present value of annuity due and ordinary annuity assuming 6 % interest rate, then:

Present value of annuity due =

(1 + 0.06) \times 150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )

= 1.06 \times $400.95

= $425.0089

Present value of ordinary annuity = 150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )

= $150 \times 2.6730

= $400.95

Therefore, value of annuity due is more than value of ordinary annuity.

Statement a. is correct.

5 0
3 years ago
Suppose Compco Systems pays no dividends but spent $ 5.18 billion on share repurchases last year. If​ Compco's equity cost of ca
shusha [124]

Answer:

Market capitalization - $155.26

Stock price - $26.77

Explanation:

The computation of the market capitalization is shown below:

= last year dividend × (1 + growth rate) ÷  (cost of capital - growth rate)

= $5.18 billion × ( 1 + 7.9%) ÷ (11.5% - 7.9%)

= $5.58,922 billion ÷ 3.6%

= $155.26

And, the stock price would be

= Market capitalization ÷ outstanding shares

= $155.26 ÷ 5.8 billion

= $26.77

3 0
3 years ago
One of the six characteristics economists use to judge how well an item
Aleonysh [2.5K]

Answer:

Money can easily be divided into smaller denominations is the correct answer.

Explanation:

4 0
3 years ago
Other questions:
  • An increase in the money supply shifts the ______ curve to the right, and the aggregate demand curve
    10·1 answer
  • An effective production quota in the sugar market​ ______
    9·1 answer
  • The Eagle Pawn Company is a regional business that owns seven pawn stores in the Houston area. The owners of Eagle Pawn have rec
    14·1 answer
  • You wish to retire in 14 years, at which time you want to have accumulated enough money to receive an annual annuity of $17,000
    8·1 answer
  • When two knowledgeable people acting independently each produce the same information, this information is said to be?
    7·1 answer
  • Determining Amounts to be Paid on Invoices Determine the amount to be paid in full settlement of each of the following invoices,
    10·1 answer
  • The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and
    15·1 answer
  • What is the basic unit of study in microeconomics? A) employment and unemployment figures B) government taxes and spending C) to
    5·1 answer
  • Bud exchanges land with an adjusted basis of $ 22,000 and a fair market value of $ 30,000 for another parcel of land with a fair
    8·1 answer
  • 16. The process of selling goods and services to a customer to earn a profit is called;
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!