Axiom International wants to expand its operations to a country that is politically, culturally, and economically different from
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Answer:
annual rate of return = 10.67 %
time required for investment double = 9.60 years
Explanation:
given data
investment doubles = 6 year
annual rate = 7.50%
solution
we get here annual rate of return by rule no 72 that is
investment doubles = ........1
put here value
annual rate of return =
annual rate of return = 10.67 %
so time required for investment double by rule 72
time required for double investment =
so time required for investment double = 9.60 years
Answer: <em>a. Multiplier = 3.33</em>
<em>b. Stimulation = $2000 billion</em>
Explanation:
In this particular case , it's given:
Marginal propensity to consume(MPC) = 0.7
Government spending = $600 billion
Therefore, we can evaluate the multiplier using the following formula:
Multiplier = 3.33
Noe, in order to find the stimulation in the economy we will multiple the new government spending with the multiplier. We will get ;
Stimulation = $2000 billion