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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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seropon [69]

Answer:

committed the fallacy of avoiding the issue.

Explanation:

The fallacy of avoiding the issue is also called the fallacy of irelevant conclusion or a red herring.

It occurs when an individual avoids dealing with an issue that he has a problem with.

In the given scenario the issue is whether bluegrass is better than Alfa Alfa for cattle in the Midwest.

Instead of Juan to address the issue he is arguing that the U.S. Department of Agriculture is a bloated bureaucracy with too much fat that deserves to be cut in the next federal budget bill.

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3 years ago
A local county is considering purchasing some dump trucks for the trash pickups. Each truck will cost $55,000 and have an operat
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Answer:

35,972

Explanation:

The equivalent annual cost can be calculated dividing NPV by the annuity factor

In order to find NPV first

                                   Year1    Year2   Year3   Year4  Year5         Total

Operating and

Maintenance              18000 21000  24000  27000 30000          -

Discount factor(10%)  0.909   0.826   0.751   0.683   0.620           -

Discounted CFs          16362   17346  18024    18411   18600      88,713

Salvage                                                                          12000  

Discount factor(10%)                                                     0.620

Discounted salvage                                                      7440        (7440)

Inital Cost                   (55,000)                                                      (55,000)

NPV                                                                                                136,333

Calculation for EAC

NPV = 136,333

Annuity factor for 5 years = 3.790

Equivalent annual cost = NPV /Annuity factor

Equivalent annual cost = 136,333/3.790

Equivalent annual cost = 35,972

8 0
3 years ago
A particular plot of land can produce 700 kg of beef per hectare. beef sells for $4/kg. if that land is converted to producing c
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The computation shows that the amount that will be made will be $420.

<h3>How to compute the value?</h3>

From the information, it was stated that a particular plot of land can produce 700 kg of beef per hectare. beef sells for $4/kg.

It was then stated that if that land is converted to producing corn, which sells for $0.15/kg, approximately how much will the farmer make selling corn.

The amount made will be:

= 700 × 4 × 0.15

= 700 × 0.6

= $420

Learn more about computations on:

brainly.com/question/4658834

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Answer:

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Goods and services deemed to be of high utility value are always in high demand. Consumers will be willing to pay more for such commodities. A product with high utility value will outsell its competitors in the market.

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