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defon
3 years ago
13

Suppose business decision makers become more optimistic about the future and, as a result, increase their investment spending by

$20 billion. If the economy's marginal propensity to consume is 0.75, the equilibrium level of aggregate real GDP will increase by____________.
Business
1 answer:
Art [367]3 years ago
4 0

Answer:

$80 million

Explanation:

We know that

Multiplier = (1) ÷ (1 - marginal propensity to consume)

                = (1) ÷ (1 - 0.75)

                = (1) ÷ (0.25)

                = 4

Now the GDP would increase by

= Increase in  Investment spending × multiplier effect

= $20 billion × 4

= $80 million increase

We simply multiplied the investment spending increase with the multiplier effect

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Professional sales skills
Oxana [17]

Answer:

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6 0
3 years ago
Transactions Falcon's Related Account 1. Falcon purchases common stock of Wildcat. Investment2. Falcon borrows from Wildcat by s
ludmilkaskok [199]

Answer:

1. Transaction will have effects on Balance Sheet in the Assets Section and will be classified as an Investing Activity in the Statement of Cash flows.

2. Transaction will have effects on Balance Sheet in the Liability Section and will be classified as a Financing Activity in the Statement of Cash flows.

3. Transaction will have effects on Income Statement in the Revenue Section and will be classified as an Operating Activity in the Statement of Cash flows.

4. Transaction will have effects on Income Statement in the Revenue Section and will be classified as an Operating Activity of the Statement of Cash flows.

5. Transaction will have effect on Income Statement in the Expense Section and will be classified as a Financing Activity in the Statement of Cash flows.

Explanation:

1. Falcon purchases common stock of Wildcat. This is classified in the investments tab of the assets account. This will be reflected in balance sheet. The transaction is classified in the investing activity.

2. Falcon borrows from Wildcat and signs Notes payable this will have effects in balance sheet liability account. This is financing activity.

3. Falcon receives Dividend revenue from Wildcat. This will be reflected in income statements as revenue. It will operating activity.

4. Falcon provides services to Wildcat , this is reflected in income statement as revenue. This will appear under operating activity.

5. Falcon pays interest on the borrowings to Wildcat. This is income statement items and is an expense. It belongs to financing activity.  

7 0
3 years ago
Explain how banks have transformed their commercial lending business from asset transformation to brokerage services
faltersainse [42]

Asset transformation by financial intermediaries is the purchase of a primary asset or securities and their transformation into other assets in terms of risk and maturity.

A type of transformation where banks use deposits (mobilized funds) to generate income by pooling deposits to provide loans. More precisely, asset transformation is the process of converting bank liabilities (deposits) into bank assets (loans). Deposits are inherently subject to withdrawal by customers (depositors) at any time or as set out in the deposit contract/agreement. Loans are bank assets because they represent money that the bank lends and expects to receive back in the form of repayment of principal and interest. As such, banks perform asset transformation by providing long-term and short-term loans, with the interest differential being their transformation returns. Banks and other financial institutions usually perform asset transformation by offering their customers various financial products on both sides of the balance sheet, such as deposits, investment and loan products, etc.

Learn more about risk and maturity.

brainly.com/question/20715710

6 0
2 years ago
Various financial data for the past two years follow. LAST YEAR THIS YEAR Output: Sales $ 200,100 $ 202,100 Input: Labor 30,100
kramer

Answer: $1.637; $1.404

Explanation:

Given that,

Last year:

Output - Sales = $200,100

Input:

Labor = 30,100

Raw materials = 35,100

Energy = 5,010

Capital = 50,010

Other = 2,010

Input = 30,100 + 35,100 + 5,010 + 50,010 + 2,010

         = 122,230

Total Productivity = \frac{output}{input}

                              = \frac{200,100}{122,230}

                              = $1.637

This year:

Output - Sales = $202,100

Input:

Labor = 40,100

Raw materials = 45,100

Energy = 6,050

Capital = 49,750

Other = 2,875

Input = 40,100 + 45,100 + 6,050 + 49,750 + 2,875

         = 143,875

Total Productivity = \frac{output}{input}

                              = \frac{202,100}{143,875}

                              = $1.404

8 0
3 years ago
Evaluate the business and charitable contributions of andrew carnegie and john
Jet001 [13]

Both Carnegie and Rockefeller were the biggest businessmen and the riches in the 20th century. After all their great amount of profits garnered, both had individually decided to embark in a journey of charities. Carnegie had charity contributions that were made into school such as the Carnegie Institution, Tuskegee Instituion, and a lot more. He was dubbed as the patron saints of libraries and decided to set up more charitable foundations. Rockefeller on the other had a lot of charities and activities that gave away his excess money into charitable causes. He too had built schools by starting to build University of Chicago.

But with all their charitable and business contributions, I would say I like Carnegie more because it gave away of a lot of technologies we know of today and he is working on a principle he deeply believes in that after gaining your wealth you should contribute this wealth for the general welfare. However, Rockefeller too was great and focused his contributions on public service.

8 0
3 years ago
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