If the government cuts taxes by $40 billion, this puts more money in consumers' pockets. Given an MPC of 0.8, this means they will spend $32 billion
Evaluating :
(0.8 × $40 = $32).
The correct answer is an increase of $32 billion.
GDP:
Gross domestic product (GDP) is a measure of the final goods and services produced with a specific region over a specified period of time. It is computed as follows:
GDP = Consumption + Government Spend + Investment + Net Exports
What is Marginal Propensity to Consume (MPC)?
Marginal propensity to consume (MPC) is measured as the portion of an increase in pay that a consumer would spend on goods and services as opposed to saving. Essentially, it is measuring how sensitive consumption in an economy is to increases in income. MPC is important in economics because it illustrates the effect that increased government spending has on the economy.
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<span>Classical economists felt this way because of the idea of 'interest rate flexibility'. This means that the classical economists believed in the idea that the economy would even itself out, or that the economy was 'self-regulating'. This lends itself to the idea that saving would be equal to investment because it does not take into consideration any shift in the economy.</span>
The justification was that the superior financing of the KKR bid would require less gutting of the company to pay off debts
<h3>What is
debts?</h3>
Debt is an obligation that requires one party, the debtor, to pay another party, the creditor, money or other agreed-upon value. Debt is a delayed payment or series of payments that differs from an immediate purchase.
Student loans, mortgages, and business loans are examples of "good" debt, which is defined as money owed for things that can help build wealth or increase income over time. "Bad" debt is defined as credit card or other consumer debt that does little to improve your financial situation. These are exaggerations.
In accounting, debt is classified as a liability. Debt can refer to a variety of different numbers on the balance sheet, ranging from wages payable to tax payable.
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Answer:
Cullumber Company
Journal Entry:
Debit Loss on Goodwill Impairment $34,200
Credit Goodwill $34,200
To record the loss on goodwill impairment.
Explanation:
a) Data and Calculation:
Fair value = $820,800
Carrying value of net identifiable assets, including goodwill = $855,000
Goodwill impairment = $34,200 ($855,000 - $820,800)
b) Cullumber, which acquired Blossom is expected to check for the impairment of goodwill yearly. The impairment occurs when the carrying value of the net identifiable assets of Blossom is more than the fair value of Blossom. Generally Accepted Accounting Standards require the annual review of the fair value of goodwill to check for its impairment. By the above entry, the goodwill will be reduced by $34,200 and a loss debited in Cullumber's accounts.
Answer:
Increase; fall
Explanation:
Due to the slightly above normal rainfall levels which led to a large black morel harvest, <em>the supply of the commodity will increase</em>.
However, since demand for the commodity is expected to remain the same as it was in 2007 despite the increase in supply, <em>the equilibrium price is expected to fall</em> as supply exceeds demand.
