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Bezzdna [24]
3 years ago
13

Suppose the government increases taxes by ​$110 billion and the marginal propensity to consume is 0.80. By how will equilibrium

GDP​ change? The change in equilibrium GDP​ is: ​$ nothing billion. ​(Round your solution to one decimal place and include the minus sign if​ necessary.)
Business
1 answer:
Sever21 [200]3 years ago
8 0

Answer:

change in GDP= $440 billion

Explanation:

Given :

Increase in the taxes by government = $110 billion

marginal propensity to the consumer (MPC)= 0.80

By formula we know that

Tax multiplier = -MPC/(1-MPC)

now putting the value we get

Tax multiplier = -\frac{0.8}{1-0.8}

= -4

The change in GDP is given by( Tax multiplier* Increase in the taxes )

Therefore,change in GDP= -4\times110= -440 billion

Minus sign indicate decrease in GDP

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The following investment opportunities are available to an investment center manager: Project Initial Investment Annual Earnings
solong [7]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Projects:

A

Io= -$ 800,000

Perpetual cash= $ 90,000

B

Io= 100,000

Perpetual cash flow= 20,000

C

Io= 300,000

Perpetual CF= 25,000

D

Io= 400,000

Perpetual CF= 60,000

To find the present value of a perpetual annuity we need to use the following information:

PV= cash flow/i

A) i= 0.16

A= -800000 + (90000/0.16)= -237,500

B= -100000 + (20000/0.16)= 25,000

C= -300000 + (25000/0.16)= -143,750

D= -400000 + (60000/0.16)= -25000

Only project B is pursuable.

B) i=10%

A= 100,000

B= 100,000

C= -50,000

D= 200,000

Only project C is not pursuable. Project D has the greatest net present value.

C) With i=16% only project B should be pursued. With i=10%, project D is the best.

7 0
4 years ago
Companies can and often do use different costing methods for financial reporting and tax reporting. An exception to this is the:
nignag [31]

Answer:

LIFO conformity rule.

Explanation:

LIFO refers to the Last in first out method. In this inventory system, the firm sells last units at first stage and then sells according to that

According to the given situation,  the LIFO conformity rule requires that the taxpayer follow the same inventory cost flow as used for tax reporting purposes in the financial statement.

Therefore the correct answer is LIFO conformity rule.

7 0
3 years ago
Two important goals for any speech are:
photoshop1234 [79]

Answer:

A. a clear message and positive ethos

Explanation:

Clarity in communication refers to being effectiveness in conveying the intended message. Clarity in speech is a must for any speech as it aids in better comprehension of the message by the listener.

Ethos refers to the creation of authority and command in speech. It also refers to whether the speaker is able enough to speak on a subject or is he the right person to speak on such a matter.

Through ethos, the speaker establishes his command over the subject he has chosen to speak upon.

Positive ethos would mean displaying a positive body language while speaking and maintaining calm and open to questioning and providing the required response. It refers to building an amiable rapport with listeners.

6 0
4 years ago
Department a had sales of $100,000.00, Department B had sales of $500,000.00, and total...
weeeeeb [17]
It would be 10,333.33
6 0
3 years ago
An increase in input prices causes:___________
Svetach [21]

Answer: the market supply to shift inward, driving the equilibrium price higher.

Explanation:

An increase in input prices will result into a rise in the production costs. This will result in a leftward shift of the supply curve.

Therefore, the market supply will shift inward, driving the equilibrium price higher. This simply means that there will be lesser supply of the product and hence, increase in price.

5 0
3 years ago
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