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Sindrei [870]
3 years ago
15

If current output is $40b less than Potential GDP, how much would congress need to decrease taxes by to correct this short-run e

conomic fluctuation given that the MPC is 0.75?
Business
1 answer:
malfutka [58]3 years ago
6 0

Answer:

Reduction in Tax Needed = $ 13.33

Explanation:

Tax Multiplier shows magnitude of change (decrease) in income due to tax change (rise) .

Tax Multiplier = ΔY / ΔT = - MPC / (1- MPC)

Given : Change in Income needed [ΔY] = 40

MPC = 0.75

Putting in formula ;

40 / ΔT  = - 0.75 / (1- 0.75)

40 / ΔT = - 0.75 / 0.25

40 / ΔT  =  - 3

ΔT = - 40/ 3

ΔT = - 13.33

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Answer: In the case of Gloria’s son several strategies can be used to help him take better decisions. Gloria’s son was seeking attention and that lead him to take heuristic decisions. Heuristic decisions are the decisions that are taken impulsively without thinking and knowing the consequences.

Here, Gloria should sit down and talk to her son about his bad habits and should make him realize what are the consequences of drinking at a very young age and how it badly affects him physically and mentally.

7 0
3 years ago
Sheridan Company receives a $14000, 3-month, 8% promissory note from Carla Vista Company in settlement of an open accounts recei
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Answer and Explanation:

The journal entry to record while receiving the note is shown below:

Notes receivable  Dr. $14,000

          To Accounts receivable $14,000

(Being receiving of the note is recorded)

Here the note receivable is debited as it increased the assets and credited the account receivable as it decreased the assets

The same is to be considered

3 0
3 years ago
Chang Industries has already spent $230,000 to produce tables. Those tables can be sold as is for $442,000. Alternatively, the t
Thepotemich [5.8K]

Incremental revenue is often compared to production costs. The stained tables can be sold for $178,000.

<h3>What is incremental revenue?</h3>

Incremental revenue is the profit that a business earns through rising sales.

It can be used to determine the additional revenue generated by a particular product, investment, or direct sale from a marketing campaign when sales value has grown.

As per the information,

the tables could be sold for $442,000 and after additional processing the tables can be sold for $620,000. The incremental revenue is equal to $620,000 - $442,000 = $178,000

Therefore,The stained tables can be sold for $178,000.

Learn more about incremental revenue here:

brainly.com/question/1446002

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8 0
1 year ago
The security market line is a positively sloped straight line that displays the relationship between expected return and _______
Svetllana [295]

Answer:

E) beta

Explanation:

The security market line (SML) can be regarded as a line that is drawn on a chart which represent the capital asset pricing model. And it allows to know the expected of security which can be attributed to the function of non-diversifiable risk as well as systematic

.It should be noted that The security market line is a positively sloped straight line that displays the relationship between expected return and beta

5 0
3 years ago
Juan argued that bluegrass is the best food for cattle in the Midwest. Sammy objected by citing how the authorities at the U.S.
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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2 years ago
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