1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Katen [24]
4 years ago
12

Suppose that the economy is at equilibrium at $1,000 billion, and potential output is $1,200 billion. If the marginal propensity

to consume (MPC) is 0.9, then government spending must increase by $_____ billion to reach potential output.
Business
1 answer:
leonid [27]4 years ago
8 0

Answer:

20

Explanation:

The computation of the increase in the government spending is shown below:

= (Economy is at equilibrium point - potential output) ÷ (Multiplier)

= ($1,000 billion - $1,200 billion) ÷ (10)

= $200 billion ÷ 10

= $20 billion

The multiplier is computed below:

= (1) ÷ (1 - MPC)

= (1) ÷ (1 - 0.9)

= 1 ÷ 0.1

= 10

We simply first apply the multiplier formula, than calculate the government spending increment

You might be interested in
A factory building is an example of which factor of production?
Luba_88 [7]

Answer:

The making and delivery of the product.

Explanation:

Because in a factory it manufactures the product that they are making and send them to stores to sell the products for money.

5 0
3 years ago
Vanguard has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widel
Svetradugi [14.3K]

Answer:

The projects which maximize Vanguard's shareholder wealth are Project A; Project B; Project D.

Explanation:

Projects which maximize the shareholder value are projects delivering Expected Returns which are higher than its risk-adjusted weighted average cost of capital (WACC).

As a result, Project A with Expected return of 15% and risk adjusted WACC of 12%; Project B with Expected return of 12% and risk adjusted WACC of 10%; Project D with Expected return of 9% and risk adjusted WACC of 8%; are the projects that maximize the shareholder's value.

On the other hand, Project C with Expected return of 11% and risk adjusted WACC of 12% is harmful to shareholder value.

8 0
3 years ago
True or false: small server sections are more typical in fast service operations
Sindrei [870]

Answer:

false

Explanation:

3 0
3 years ago
Read 2 more answers
Gymtastic was able to serve large crowds of customers and then adjust operations to serve very few customers thanks to their com
balu736 [363]

The competitive capability which relates to flexibility is the reason that Gymtastic was able to serve large crowds of customers and then adjust operations to serve very few customers.

<h3>What is the competitive capability?</h3>

Competitive capability relates to the unique ability possess by a company over other competitors.

In this case, the Gymtastic possess the competitive capability called Flexibility.

In conclusion, the competitive capability which relates to flexibility is the reason that Gymtastic was able to serve large crowds of customers and then adjust operations to serve very few customers.

Read more about Competitive capability

<em>brainly.com/question/5319576</em>

4 0
3 years ago
A reading researcher does what
Dmitry_Shevchenko [17]

Answer:

They reveal how the author(s) interpreted the findings of their research and presented recommendations or courses of action based on those findings.

Explanation:

7 0
2 years ago
Other questions:
  • The per unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 5,600 gallons of direct materials that a
    13·2 answers
  • One way for the federal government to increase tax revenues would be to enact either a vat or a national retail sales tax. the u
    8·1 answer
  • Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during
    6·1 answer
  • A company plans to issue new Preferred Stock that pays 6% on the Par Value of $25. Similar preferred stocks are current selling
    14·1 answer
  • sam bought 6 cookies from a bake sale for $3.00. how much did each cookie cost? how much would it cost to buy 10 cookies?
    14·2 answers
  • Ratio Analyses
    10·1 answer
  • Which of the following statements about theoretical capacity is BEST? A. Theoretical capacity allows adjustments for preventive
    6·1 answer
  • Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery ba
    14·1 answer
  • Why is it so hard to find essentials during times of crisis?
    6·2 answers
  • Listed below are five procedures followed by Eikenberry Company.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!