Interest rates are affected by what? (for Global Business)

If the marginal propensity to consume is equal to 0.85, then a $500 increase in disposable income leads to a:

AlekseyPX

The question is incomplete. The complete question is stated below.

If the marginal propensity to consume is equal to 0.85, then a $500 increase in disposable income leads to a:

a. $400 increase in consumption spending

b. $75 increase in consumption spending

c. $425 increase in personal saving

d. $75 increase in personal saving

Answer:

If a $500 increase causes an increase of $425 in consumer spending, the rest of $75 is the increase in personal saving. Thus, option D is the correct answer.

Explanation:

The marginal propensity to consume or MPC is the percentage of the additional income that will be used for consumption spending. It is a concept that is used to calculate how much of an increase in income will be used in consumption and saving. The formula to calculate MPC is,

MPC = Change in consumer spending / Change in income

0.85 = Change in consumer spending / 500

500 * 0.85 = Change in consumer spending

Change in consumer spending = $425

If a $500 increase causes an increase of $425 in consumer spending, the rest of $75 is the increase in personal saving.

8 0

3 years ago

There are four functions of management: planning, leading, organizing and controlling. The controlling function of management is

Fantom [35]

Answer: True

Explanation:

Proper planning without control is futile, this is because a blue print may have been put in place in the planning process but it becomes imperative for management to set up institutions or machineries to ensure that plans are executed as expected and there are remedial actions or plans in place in the event when unexpected events come up to distort achievement of the goal.

Proper control leads to achievement of organizational goals.

6 0

3 years ago

Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in

Anit [1.1K]

Answer:

a) Portfolio ABC's expected return is 10.66667%.

Explanation:

Some information is missing:

Stock Expected Standard Beta

return deviation

A 10% 20% 1.0

B 10% 10% 1.0

C 12% 12% 1.4

The expected return or portfolio AB = (1/2 x 10%) + (1/2 x 10%) = 10% (it is the same as the required rate for stock A or B)

The expected return or portfolio ABC = (weight of stock A x expected return of stock A) + (weight of stock B x expected return of stock B) + (weight of stock C x expected return of stock C) = (1/3 x 10%) + (1/3 x 10%) + (1/3 x 12%) = 3.333% + 3.333% + 4% = 10.667% THIS IS CORRECT

Options B, C, D and E are wrong.

5 0

3 years ago

1-Started business with Cash OMR 100000

quester [9]

Finger enter me . Named asnumber 8

8 0

2 years ago

Zach is looking for a homeowners insurance policy for his new house. AAA Insurance company has offered him a plan that insures h

a_sh-v [17]

The annual premium for Zack's house would be cheaper through AAA than Thompson’s Insurance.

<h3>How to calculate the annual premium of two companies? </h3>