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Irina-Kira [14]
3 years ago
10

In a simple economy in which prices are constant and with no income taxes or imports, the marginal propensity to consume is 0.8.

If investment increases by $50, what impact will that have on aggregate expenditure?
A) decrease by $100B) increase by $250C) increase by $100D) decrease by $250
Business
1 answer:
lutik1710 [3]3 years ago
5 0

Answer: Increase by $250

Explanation: As per the general rule of economics when there is an increase in income, that increase will eventually lead to increase in expenditure.

As, there is an increase in investment in the given case so it will result in increase in income for the economy.

We can compute it  as :-

change\:in\:income=\frac{change\:in\:investment}{1-MPC}

change\:in\:income=\frac{\$50}{1-0.8}

                                        = $250

Therefore, the expenditure would increase by $250

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<h3>Answer:</h3>

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The Allowance for Bad Debts has a credit balance of $ 9 comma 500 before the adjusting entry for bad debts expense. After analyz
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When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.  

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