Monthly Salary: $1200
Monthly food bills: $240
% of monthly salary spent on food is 20%.
Answer:
Explanation:
1. The journal entries are shown below:
Bad debt expense A/c Dr $3,378
To Allowance for doubtful debts A/c $3,378
(Being bad debt expense is recorded)
Allowance for doubtful debts A/c Dr $4,510
To Account receivable A/c $4,510
(Being written off amount is recorded)
2. The computation of the net sales is shown below:
= Gross sales - sales discount - sales return - credit card fees
= $140,756 - $1,344 - $996 - $2,129
= $136.287
Answer:
Missing word in 1. <em>"Assume the marginal propensity to consume (MPC) is 0.75."</em>
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1. Using the ffg formula to calculate the effect of real GDP
Real GDP = [1/1-MPC]*Government purchase
= [1 / 1 - 0.75]*60,000
= (1/0.25)*60,000
= 4*60,000
= $240,000
Thus, the total change in real GDP is $240,000, it means the real GDP increases by $240,000
2. Real GDP = (MPC/1-MPC)*Government spending
= 0.75/1-0.75*60,000
= 0.75/0.25 * 60,000
= $180,000
Thus, the total change in real GDP is $180,000, it means the real GDP increases by $180,000
3. Thus, from the calculation, it is clear than an increase in government transfers or taxes as opposed to an increase in government purchases of goods and services will result in a smaller eventually effect on real GDP.