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Vikentia [17]
3 years ago
12

Suppose that marginal propensity to consume is equal to 0.9 and the government increases its spending by $200 billion. This new

increase in spending is financed by a fresh increase in taxes equal to $200 billion. As a result of this, GDP will:
A. not change at all.
B. increase by $200 billion.
C. increase by $2,000 billion.
D. decrease by $200 billion.
Business
1 answer:
Step2247 [10]3 years ago
5 0

Answer:

The answer is B.

Explanation:

Gross Domestic Product (GDP) is the total market value of all the final goods and services produced within a sovereign nation(country) during a given period of time usually a year.

Gross Domestic Product (GDP) can be calculated using expenditure method or income method or value-added method.

To analyze this question, expenditure method will be used. The formula is C + I + G + (X-M)

where C is the consumer spending

I is the business investments

G is the government spending

X is the exports

M is the imports.

Government has injected $200 billion into the economy through its spending.

This $200 billion is gotten from an increase in taxes, meaning consumers' disposable income has reduced by this amount.

Therefore, $200 billion will still be the incremental amount to the GDP

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Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. Th
saw5 [17]

Answer:

ALTERNATIVE 1 $30,000

ALTERNATIVE 2 $28,000

ALTERNATIVE 3 $33,000

Explanation:

Calculation for the incremental income

ALTERNATIVE 1 Sell as it is

Incremental revenue $30,000

(5,000*$6)

Incremental costs $0

Incremental Income $30,000

ALTERNATIVE 2 Disassemble and sell to recycler

Incremental revenue $60,000

(5,000*$12)

Incremental costs $32,000

Incremental Income $28,000

ALTERNATIVE3 Rework and turn into good jackets

Incremental revenue $135,000

(3,000*$45)

Incremental costs $102,000

Incremental Income $33,000

Therefore based on the above calculation the company should choose ALTERNATIVE 3 of the amount of $33,000

4 0
3 years ago
Southern Hydraulic Supply is undertaking a review of their inventory policies. A typical product is a small hydraulic fitting. C
zheka24 [161]

Answer:

$418,550

Explanation:

Steps are shown below:

a. The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}

= \sqrt{\frac{2\times \text{52,000}\times \text{\$50}}{\text{\$1.25}}}

= 2,040 units

b. The number of orders would be equal to

= Annual demand ÷ economic order quantity

= $52,000 ÷ 2,040 units

=  25.49 orders

c. The average inventory would equal to

= Economic order quantity ÷ 2

= 2040 units ÷ 2

= 1,020 units

d. The total cost of ordering cost and carrying cost equals to

Ordering cost = Number of orders × ordering cost per order

= 25.49 orders × $50

= $1,275

Carrying cost = average inventory × carrying cost per unit

= 1,020 units × $1.25

= $1,275

So, the total annual cost would be  

= Purchase cost + ordering cost + carrying cost

= $416,000 + $1,275 + $1,275

= $418,550

Purchase cost = Annual demand × cost per unit

                        = 52,000 × $8

                        = $416,000

6 0
3 years ago
In the equation Y = C + I + G + NX, Question 4 options: Y represents the economy’s total expenditure. C represents household exp
Zolol [24]

Answer:

Y represents the economy’s total expenditure

Explanation:

The equation Y = C + I + G + NX represents the expenditure approach to calculating GDP.

Y - economy’s total expenditure

C - household expenditures on services and goods

I - investment by firms

G - Government Spending

NX - Net Export

The variables can either be positive or negative .

I hope my answer helps you

7 0
3 years ago
The stock in Up-Towne Movers is selling for $48.20 per share. Investors have a required return of 11.2 percent and expect the di
Keith_Richards [23]

Answer:

The dividend the company just paid is $3.53

Explanation:

The solution to the problem is given as follows.

$48.20 = D1/(.1120 − .0360)

$48.20= D1(0.076)

Making D1 the subject of formula we have.

D1 = $3.66

D0 = $3.66/(1 + .0360)

D0 = $3.53

6 0
3 years ago
Read 2 more answers
Eva received $55,000 in compensation payments from JAZZ Corp. during 2018. Eva incurred $7,000 in business expenses relating to
larisa [96]

Answer:

A. $4200

B. $7,599.20

C. $6,782

D. $3,113

Explanation:see attached file

3 0
2 years ago
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