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IgorLugansk [536]
3 years ago
8

If the MPC is 0.8 and a component of AD, such as Investment, is increased by $5, then the maximum amount of change in income and

output for the nation would be ___________ .
a. $20
b. $25
c. $50
d. $100
Business
1 answer:
SCORPION-xisa [38]3 years ago
6 0

Answer:

$25

Explanation:

The maximum amount by which the real GDP is expected to change for a given change in expenditure is known as the multiplier. Note that an economy is made of millions of economic agents interacting with one another. So expenditure made by one actor becomes an income in the hands of another who in turn spends a portion which becomes income to another and so on.

Marginal propensity to consume (MPC) represents the proportion of any extra income spent. For example, if my income increases by $100 and I only spent $70, then MPC is 0.7.

The multiplier depends on MPC. The multiplier is calculated as follows

Multiplier = 1/(1-MPC)

The multiplier in this question is therefore equals to 1/(1-0.8) = 5.

The maximum change expected in the real GDP is calculated as follows:

Maximum change change in GDP = Multiplier × change in expenditure

The maximum change in output for this question is

1/(1-0.8) × $5 = $25

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kondor19780726 [428]

<u>Answer:</u> A. Moral relativism

<u>Explanation:</u>

Moral relativism means the moral judgement made by people based on their differences such as culture or country, it denotes that there is no one method where people can decide what is right and what is wrong.

The four types of moral relativism are naive relativism, cultural relativism, role relativism and social relativism. Naive relativism means individuals can have own moral values. Cultural relativism means people should not judge based on one's culture.  Role relativism means a person with job role should not make judgments on others beliefs.

3 0
3 years ago
9 . Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected
vodomira [7]

Answer:

IRR 6% for Jabob

His friend will need 12 years saving cash to obtain their collegue funds.

Explanation:

We will solve for the rate being the annuity of 3 payment of 800

and the present value 2,138.41

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\  

C 800

time 3

PV 2,138.41

rate ?

800 \times \frac{1-(1+x)^{-3} }{x} = 2,138.41\\  

To solve we can use excel, a financial calculator or trial and error

For excel we will do the following:

write the list of cash through the loan life:

-2,138.41

+800

+800

+800

then we write in the empy cell

=IRR(

select the values and press enter

This will give the IRR which is 6%

For the second assignment:

we need to solve for time:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\  

C    3,800

time            n  

rate            0.06

PV $31,897

3800 \times \frac{1-(1+0.06)^{-n} }{0.06} = 31,897\\  

 We work out the formula:

(1+0.06)^{-n} = \frac{31,897\times 0.06}{3,800}

Now we solve the right side and apply logarithmic properties

-n = \frac{log0.503636842&#10;}{log1.06}

-n = -11.77128325

n = 11.77

It will take 12 years to obtain their target amount

3 0
3 years ago
Why might you complete a 1040 instead of a 1040ez? everfi?
Wittaler [7]
In general, if you have more types of deductions on your tax, the 1040 forms maybe more appropriate for you because it provide you with various options to claim deductions or credit.
The 1040Ez on the other hand only offer a simple format that only beneficial for taxpayers who made certain conditions.
6 0
3 years ago
Read 2 more answers
I purchase a 10 percent coupon bond. Based on my purchase price, I calculate a yield to maturity of 8 percent. If I hold this bo
Vedmedyk [2.9K]

Answer:

B) 8 percent.

Explanation:

The yield to maturity is the expected rate of return of a bonds if held until maturity.

We are asked precisely for what rate are we receiving if held at maturity so we receive the yield to maturity.

That is a rate at which the discounted coupon payment and maturity payment matches the price we urchase the bonds.

8 0
3 years ago
The Alpha Beta Corporation disposes a capital asset with an original cost of​ $170,000 and accumulated depreciation of​ $109,000
Bingel [31]

Answer:

Option D) $54.400

Explanation:

When  a company disposes a capital asset, the cost of the asset it's the remanent value, that is the difference between the original cost less the accumulated depreciation, in this case $170.000 minus $109.000, remanent value is $61.000.

This value it's the cost of sale and the price it's $50.000 , the result of this transaction it's a loss of ($11.000) so the after-tax cash inflow it's ($4.400).

The total Cash Inflow it's the sum of $50.000 (gained from the sale) and the save on taxes for $4.400, because of the loss I get a payback on taxes, the total is $54.400.

8 0
4 years ago
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