The spending that would occur during the third round of spending if the marginal propensity to consume (MPC) was 0.6 will be $420 billion.
- Increase in expenditure = $700 billion.
- Marginal propensity to consume = 0.6
The amount of spending based on the information given will be:
= 0.6 × $700 billion
= $420 billion.
Therefore, the correct option is $420 billion.
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Answer:
The correct answer is option A.
Explanation:
The law of diminishing returns states that as we go on employing more and more unit of input while keeping other inputs constant, the return from each additional unit of input will go on declining.
This means that the output produced from each additional unit of input will go on declining.
Here, as capital is kept constant and labor is increased by a unit, the output at first increases by 5 units from 20 to 25. But later when input is again increased by a unit, the output increase by only 3 units from 25 to 28.
This shows the law of diminishing marginal returns where the marginal returns from a unit of labor is declining.
We can represent the number of potential outcomes by 3 to the power 8.
<h3>What is permutation and combination?</h3>
Permutation relates to the act of arranging all the members of a set into some sequence or order.
We can assume, for two choices, we have one decision. This can be represented as, since we have eight decisions,
Representation of the potential outcomes are:
= 3^1 + 3^1 + 3^1 + 3^1 + 3^1 + 3^1 + 3^1 + 3^1
= 3^8
= 6,561
Learn more about permutation and combination here: brainly.com/question/21014199
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Answer:
Return (%) = 17.43%
Explanation:
T<em>he return on investment is the sum of the dividends earned and capital gains made during the holding period of the investment.</em>
Dividend is the proportion of the profit made by a company which is paid to shareholders.
Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal.
Therefore, we can can compute the return on the investment as follows:
Dividend= ($1.60× 140)= $224
Capital gains= (90-78) × 140= $1680
Total dollar return on Investment = $224+ $1680= $1904
Total return in (%) = Return/ cost of shares × 100
= 1904/ (140 × 78) × 100
= 17.43%
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