1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
pantera1 [17]
3 years ago
10

Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumu

lated savings and inheritance). In the late 1990's many were concerned with very large increase in stock value (a form of wealth) and it's possible effect on saving and investment.
The following consumption function incorporate wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (I):

C=45+0.60Y+0.05W
I=100
W=800

We are ignoring the fact that saving adds to the stock of wealth.

Calculate the value of equilibrium Y,C, and savings (S). (Enter you responses as Integers. )
Business
1 answer:
Mekhanik [1.2K]3 years ago
6 0

Answer:

Equilibrium Y = 462.5 , Equilibrium C = 362.5 , Equilibrium S = 100

Explanation:

  • At equilibrium : Aggregate Demand = Aggregate Supply

[ AD = C + I ] = [ AS = C + S = Y ]

45 + 0.6Y + 0.05 W + 100 = Y → 45 + 0.6Y + 0.05 (800) + 100 = Y

45 + 40 + 100 + 0.6Y = Y → Y ; 185 + 0.6Y = Y

Y - 0.6Y = 185

0.4Y = 185

Y = 185 / 0.4 = 462.5  

  • Consumption C = 45 + 0.6Y + 0.05W

Putting Y value : C = 45 + 0.6 (462.5) + 0.05 (800) → C = 45 + 277.5 + 40

C = 362.5

  • Income Y is either consumed (C) or saved (S). So, Y = C + S

Hence , S = Y - C → 462.5 - 362.5 = 100

Alternatively : As  C + I = C + S

Hence, I = S

Equilibrium Savings = Given Investment = 100

You might be interested in
List three methods of searching the major tax service databases. A. ​Keyword, citation, or index B. ​Author, groupings, or conte
brilliants [131]

Answer:

The correct answer is A.  ​Keyword, citation, or index

Explanation:

By definition, a keyword is an informational word used in an information retrieval system to indicate the content of a document with the expectation of a matching search result.

Citations are references of other authors to give credit for their ideas in the document that is prepared. Citations are used to reinforce ideas, results and data, to give points of view, examples, to deepen or amplify the arguments of the work to be elaborated.

An index lists the terms and topics covered in a document, as well as the pages on which they appear. To create an index, index entries are marked by specifying the name of the main entry and cross reference in the document, and then the index is generated.

4 0
3 years ago
Suppose the people of an area are upset with water pollution caused by a local business. what are three ways they might address
Softa [21]

1.Speaking to a Government Representative

5 0
3 years ago
The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2014. Fortunately, the controller had kept certai
Stolb23 [73]

Answer:

LeRoi Jones Inc

Income statement for the year 2014

Sales (100/8 × $100,000)                                                 $1,250,000

Less Cost of Sales

Beginning merchandise                                  $92,000

Add Purchases                                               $481,600

Less Ending merchandise ($92,000 - 20%) ($73,600)  ($500,000)

Gross Profit                                                                         $750,000

Less Expenses :

Sales Discounts                                                  $17,000

Interest expense                                               $20,000

Administrative expenses ($500,000 × 20%) $100,000 ($137,000)

Profit before tax                                                                  $613,000

Income tax expense at 30%                                             ($183,900)

Net Income / Loss                                                              $429,100

Earnings Per Share                                                                 $21.46

Explanation:

Notes on income statement preparation

Use the statistical data to fill in the line items of the Income Statement as shown above.

For the Calculation of Sales, first calculate the administrative expenses. Apply the 8% on the administration cost to find sales at 100%.

Earnings Per Share = Earnings attributable to holders of Common Stock ÷ Weighted Average Number of Common Stock

                                = $429,100 ÷ $20,000

                                = $21.46

8 0
3 years ago
A competitive strategy to be the low-cost provider in an industry typically does not work well when:_______
sesenic [268]

Answer:

The Correct answer is A

Explanation:

Strategy of low cost is the kind of the pricing strategy, in which the business or organization, offers or provide the products or services at low price. This strategy helps in stimulating the demand as well as gain or acquire the higher market share.

So, the strategy which is competitive and also  the low cost provider in the industry work well when:

1. Newcomers in the industry uses at the introductory stage, the low prices so that could attract the buyers.

2. The competition on the price between the rivals sellers is vigorous.

3. The buyer also incur the low costs while switching the purchases from seller to another seller.

4. The product which are commodity grounded prevail as well as has minimal differentiation.

5 0
3 years ago
Read 2 more answers
What is the customer orientation of a company, and why is it important for a
goldenfox [79]
A costumer-oriented organization places customer satisfaction at the core of each of its business decisions, it focuses on helping customers to meet their long-term needs and wants. An organization that uses this is Chron
7 0
3 years ago
Other questions:
  • The ____, an accord among 117 nations, called for lower tariffs around the world. a. European Union Accord b. North American Fre
    7·1 answer
  • As specialization increases in an economy, businesses tend to experience: a.) an increase in self sufficiency due to businesses
    14·2 answers
  • Consumers will pay more of a tax levied on suppliers if their demand is:
    15·1 answer
  • Companies set rules about workplace conduct in order to
    14·1 answer
  • A family's ability to buy goods and services depends largely on its permanent income, which is its normal, or average, income. p
    13·1 answer
  • If you would like to start a company with decentralized decision making regarding day-to-day operations, but a central body of m
    6·1 answer
  • During 2020 Came Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2021.
    11·1 answer
  • Penetration pricing doesn't work if ________.
    8·1 answer
  • Matching. A shopper is in the grocery store, trying to decide whether to buy apples of a particular variety. Identify the food p
    14·1 answer
  • Lindsey Paradise is not selected for her sorority of choice at the University of Kansas. She has used all of her time rushing to
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!