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DENIUS [597]
4 years ago
14

If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, and potential output (Y*) equals 9,0

00, then government purchases must ______ to eliminate any output gap.
A. increase by 100
B. decrease by 100
C. increase by 1,000
D. decrease by 1,000
Business
1 answer:
lyudmila [28]4 years ago
4 0

Answer: Option (b) is correct.

Explanation:

Given that,

short-run equilibrium output = 10,000

income-expenditure multiplier = 10

potential output (Y*) = 9,000

Expenditure multiplier = \frac{1}{1-slope\ of AE function}

10 = \frac{1}{1-slope\ of AE function}

Slope of AE function = 0.9

slope of AE =  MPC (1-t)  t =0,

MPC = 0.9

Delta Y (DY) = 1000

government expenditure multiplier ⇒ \frac{1}{1 - MPC} = 10

Delta G = \frac{DY}{government\ expenditure\ multiplier}

             = \frac{1,000}{10}

             = 100

Government purchases must be Decrease by 100.

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Answer:

$987

Explanation:

Calculation to determine the amount to be added to the right-of-use asset and lease liability under the residual value guarantee

First step is to determine the Present value of $1: n= 4, i = 5%

Present value of $1: n= 4, i = 5%

Present value of $1=.8227

Now let calculate the amount to be added to the right-of-use asset and lease liability under the residual value guarantee

Using this formula

Amount added to right-of-use asset and lease liability=(Guaranteed -Actual)*Present value

Let plug in the formula

Amount added to right-of-use asset and lease liability=($39,800-$38,600)*.8227

Amount added to right-of-use asset and lease liability= $1,200*.8227

Amount added to right-of-use asset and lease liability=$987

Therefore the amount to be added to the right-of-use asset and lease liability under the residual value guarantee is $987

4 0
3 years ago
Exercise 153Chetola Corporation has 120,000 shares of $5 par value common stock outstanding. It declared a 15% stock dividend on
Firlakuza [10]

Answer and Explanation:

The journal entries are shown below:

On June 1

Stock dividend (120000 × 15% × $13) $234,000

   To Common Stock dividend distributable  (120000 × 15% × 5)  $90,000

    To Paid in capital in excess of par-Common Stock $144,000

(being stock dividend declared is recorded)  

On June 30

Common Stock dividend distributable $90,000

          To Common Stock $90,000

(Being the  payment of stock dividend is recorded)  

6 0
3 years ago
What theory implies that you should allow another firm to perform work activities for your company if that company can do it mor
saveliy_v [14]
<span>The theory of comparative advantage</span> implies that you should allow another firm to perform work activities for your company if that company can do it more productively than you can.
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8 0
3 years ago
Osborn Manufacturing uses a predetermined overhead rate of $18.50 per direct labor-hour. This predetermined rate was based on a
Angelina_Jolie [31]

Answer:

(A) Underapplied             (2,300)

(B)

Cost of Goods Sold debit 2,300

Factory Overhead credit  2,300

It increase their COGS by 2,300 Their Gross Profit will decrease by the same amount

Explanation:

(A)

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

227,550 / 12,300 = 18.5

<u>APPLIED </u><em>ACTUAL HOURS X RATE</em>

11,800 \times 18.5 = 218,300

<u>ACTUAL </u>                 (221,000)

Underapplied             (2,300)

(B)

It increase their COGS by 2,300 Their Gross Profit will decrease by the same amount

Sales - COGS = Gross Profit

Sales - (COGS + 2,300 adjustment) = Gross Profit

Sales - Cogs - 2,300 = Gross Profit

The gross profit decreased 2,300

3 0
3 years ago
Difference between actual result and corresponding amount of flexible budget, on the basis of actual level of output is classifi
shepuryov [24]

Answer:

The correct answer is C. Flexible budget variance .

Explanation:

Variation of flexible budget is the difference that is generated after considering the actual results of production and the amount actually determined as part of the flexible budget for the real levels of income and cost generators. For control terms, this difference is taken to know the real variation of what is produced vs. what is budgeted.

4 0
3 years ago
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