Shelly offers to sell Jane goods that Shelly, but not Jane, knows are stolen. Jane accepts the offer, and agrees to pay for the
1 answer:
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Answer:
The aftertax salvage value of the machine is D) $10,134
Explanation:
Hi. first, we need to find out the book value of the machine at the selling date, that is 3 years from now, and the book value is as follows.
Since taxes are based on the profit you make by selling something, our profit is:
Therefore, our taxes are:
So, the after tax salvage value of the machine is the money you received on the sale minus the taxes you have to pay, that is:
Salvage Value of the Machine = $12,000 - $1,866?= $10,134
That is option D)
Best of luck.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1) Marginal propensity to consume (MPC) for this economy is 0.75 as it denotes the spending of the household and saving of 0.25 and the spending multiplier for this economy is
= Spending Multiplier(M)
= 1 ÷ 1 - MPC
= 1 ÷ 1-0.75
= 1 ÷ 0.25
= 4
2). Decrease in government purchases will lead to a decrease in income, generating an initial change in consumption
= -Amount of Government Decrease Purchases by × MPC
= -$250 billion × 0.75
= -$187.5 billion
3). Decrease income again, causing a second change in consumption
= Amount Decrease in Government Purchases × MPC
= -$187.5 billion × 0.75
= $140.6 billion
4).Total change in demand resulting from the initial change in government spending
= Amount of Government Decrease Purchases by × Spending Multiplier(M)
= $250 × 4
= $1,000 billion
= $1 trillion
As we can see that the income falls by $1000 billion in the end, so AD shifts to the left by the size of $1 trillion
In the question the graph is missing. Kindly find the attachment for both of question and answer
