Answer: reduced by $80 billion
Explanation:
An expansionary gap is when the actual output is more than the potential output. From the question, we are told that an economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap and that the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out.
We are also given the marginal propensity to consume is 4/5, and told that the price level is completely fixed in the short run.
To close the expansionary gap, the government would need to reduce its spending. To solve this, we have to calculate the multiplier. This will be:
Multiplier = 1/(1 - MPC)
= 1/(1 - 4/5)
= 1/1-0.8
= 1/0.2
= 5
Therefore, the government expenditure or spending will be reduced by:
= $400 billion/5
=$80 billion
Answer:
Through Collaborative bargaining
Explanation:
Parties that have an unequal bargaining power can negotiate meaningfully, without one party taking advantage of the other through the method known as <u>collaborative bargaining</u>. In collaborative bargaining, both the involved parties listen to each other’s claims and issues and then collaborate to come to a consensus. There is transparency in the overall bargaining process and hence there is very less probability that one party is taking advantage of the other party.
Answer:
correct option is $37 million
Explanation:
given data
net operating loss = $74 million
pretax accounting and taxable income = $210 million
income tax rate = 38%
reducing the rate = 27%
to find out
Fama's income tax payable for the current
solution
we know here net taxable income that is express as
net taxable income = pretax accounting and taxable income - net operating loss ...................1
put here value we get
net taxable income = 210000 - 74000
net taxable income = $136000
and tax is here = 27 % of $136000
tax = 0.27 × $136000
tax = $36720 = 37000
So correct option is $37 million
Answer:Yes, because even if you have money you will never be able to satisfy all of your wants and must therefore make choices.
Explanation:
Economists say our "want " exceeds our "have" nomatter what the state of economy we find ourselves in but what we want always exceed what we have.
We may accumulate the greatest riches of this world but still we may even desire and want to buy another planet hypothetically speaking.
We are always craving for more than what we have no matter how large or huge what we have is but still our hearts yearns for more than that.
The more wealth we accumulate the more our desires increase because we keep wanting the next thing that is better than what we already have.
