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Marta_Voda [28]
3 years ago
7

Consider three closed economies. In the first economy, households spend $0.50 of each additional dollar they earn and save the r

emaining $0.50. In the second economy, households are satiated, so they do not spend anything of each additional dollar they earn (they save it all). In the third economy, households spend a whole dollar of each additional dollar they earn (they don't save anything). Which of the following statements is correct?
a. In the second economy, the spending multiplier is greater than in the third economy. In the first economy, the spending multiplier is undefined
b. In the first economy, the spending multiplier is greater than in the second economy. In the third economy, the spending multiplier is undefined
c. In the third economy, the spending multiplier is greater than in the second economy. In the first economy, the spending multiplier is undefined
d. In the first economy, the spending multiplier is lower than in the second economy. In the third economy, the spending multiplier is undefined
Business
1 answer:
aleksklad [387]3 years ago
4 0

Answer:

b. In the first economy, the spending multiplier is greater than in the second economy. In the third economy, the spending multiplier is undefined

Explanation:

This can be easily understood by going through some calculations in a spending multiplier formula.

WORKINGS

The formula for Spending Multiplier = \frac{1}{MPS}

Spending Multiplier

Economy 1: Multiplier = \frac{1}{0.5} = 2

Economy 2: Multiplier = \frac{1}{1} = 1

Economy 3: Multiplier = \frac{1}{0} = undefined

Note: MPS can be abbreviated as Marginal propensity to save

As we can see here economy 1 is 50% greater than economy 2 and economy 3 is undefined because they spend whole dollar they earn additionally.

On behalf of the above calculations,  option B is a perfect match!

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Mark and rasheed are at the bookstore buying new calculators for the semester. mark is willing to pay $75 and rasheed is willing
Rom4ik [11]

The correct answer is $45

Mark and Rasheed are at the bookstore buying new calculators for the semester. Mark is willing to pay $75 ( <em>$75 - $65 = </em><em>$10</em> ) and  Rasheed is willing to pay $100 ( <em>$100 - $65 = </em><em>$35</em> ) for a graphing calculator. The price for a calculator at the bookstore is $65. Their total consumer surplus ( <em>$10 + $35 = $45</em> )  is $45

5 0
2 years ago
Holding the nonprice determinants of demand constant, a change in price would:
lianna [129]

Holding the nonprice determinants of demand constant, a change in price would result in either a decrease in demand or an increase in demand.

An alternate in a nonprice determinant changes the relationship between rate and amount demanded, either increasing or reducing the amount demanded at every rate. on occasion referred to as non-very own-rate determinant. A boom or decrease in the amount demanded of an awesome, service, or resource at each fee.

The demand curve shifts horizontally. A surplus will arise in a market if: the quantity provided at a given rate exceeds the amount demanded at that rate.

Whilst a nonprice determinant of demand modifications calls for curve shifts, there may be a boom or lower in demand. when the rate of great adjustments, we move along the demand curve to a new factor on the curve, and there's a boom or lower in quantity demanded.

Learn more about demand here: brainly.com/question/1245771

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7 0
1 year ago
The NIPP Call to Action is meant to guide the collaborative efforts of the critical infrastructure community to advance security
Alex17521 [72]

Answer:

B. Promote infrastructure, community, and regional recovery following incidents.

Explanation:NIPP (NATIONAL INFRASTRUCTURES PROTECTION PLAN is a policy of the federal government of the United States of America,it is aimed at ensuring that funds received from the private sector are used to address certain identified critically important and most beneficial infrastructural challenges. This policy is directly connected with Federal agencies and Departments who take part in the infrastructure projects in the United States of America.

6 0
3 years ago
Read 2 more answers
On January 1, Year 1, the Mahoney Company borrowed $164,000 cash from Sun Bank by issuing a five-year 8% term note. The principa
Georgia [21]

Answer:

Principal payment =  $27,505.00  

Explanation:

<em>Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.</em>

The principal repayment in year 1 = Annual payment - Interest payment in year 1

<em>Interest payment in year = Interest rate × Principal Amount</em>

                                          =8% × 164,000

                                         =  $13,120.00  

Principal payment = $40,635 - 13,120 =  $27,505.00  

Principal payment =  $27,505.00  

8 0
3 years ago
A stock will have a loss of 13.6 percent in a recession, a return of 12.3 percent in a normal economy, and a return of 27 percen
SpyIntel [72]

Answer:

Standard deviation =21.34

Explanation:

<em>Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks. Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .</em>

<em>Standard deviation is the sum of the squared deviation of the individual return from the mean return under different scenarios</em>

Expected return (r) = (13.6% × 0.33 ) +  (12.3% × 0.36)  + (27%× 0.31)=17.3%

Outcome           R       (R- r )^2           P×(R- r )^2

Recession        13.6       13.6                 4.5

Normal         12.3         24.9                  8.9

Boom           27%        94.4              <u>     29.3 </u>

Total                                                <u>   42.7 </u>

Standard deviation = √42.7 = 21.34

Standard deviation =21.34

3 0
2 years ago
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