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3 years ago

Questions about the tax multiplier:

Business

1 answer:

lora16 [44]3 years ago

6 0

Answer:

1. The tax multiplier for this nation is -2.33

2. The tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 would be -3

3. Real GDP change will be of -$1,800 if the tax multiplier is-9 and taxes are reduced by $200

Explanation:

1. In order to calculate the tax multiplier for this nation according to the given data we would have to calculate the following formula:

tax multiplier for this nation=-MPC/1-MPC

tax multiplier for this nation=-0.7/1-0.7

tax multiplier for this nation=-2.33

The tax multiplier for this nation is -2.33

2. To calculate the tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 we would have to make the following calculation:

tax multiplier for this nation=real GDP/increase in taxes

tax multiplier for this nation=-$450/$150

tax multiplier for this nation=-3

The tax multiplier for this nation if a $150 increase in taxes reduces real GDP by $450 would be -3

3. To calculate the amount of change will real GDP be if the tax multiplier is-9 and taxes are reduced by $200 we would have to make the following calculation:

tax multiplier=real GDP/increase in taxes

-9=real GDP/$200

real GDP=-9*$200

real GDP=-$1800

Real GDP change will be of -$1,800 if the tax multiplier is-9 and taxes are reduced by $200

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8 0

2 years ago

Which of the following does not indicate an investor company's ability to significantly influence an investee? Select one: A. Th

Papessa [141]

Answer:

The correct option is "A"

Explanation:

The pre-dominant confirmations would incorporate;

The restriction by the investee to the speculator's impact confirm by the claims or protests to administrative specialists.
An understanding is marked by the speculator to give up the noteworthy investor rights.
A gathering of investors have a larger part proprietorship, who exercise impact over the tasks of the investee regardless of the perspectives on the investor.
A portrayal structure the investee's governing body can't be gotten by the financial specialist.

In the event that the speculator claims 30 percent of the democratic supplies of investee and other individual holds 70 percent of the democratic stocks, at that point it can't be said that the financial specialist (30 percent) has the capacity of essentially impact in investee.

5 0

4 years ago

Journalize entries for the following related transactions of Manville Heating & Air Company. Refer to the Chart of Accounts

Artyom0805 [142]

Answer:

See explanation section.

Explanation:

March 1, Purchased Debit $90,000

Accounts payable Credit $90,000

Note: To record the purchased on account.

March 9, Accounts payable Debit $90,000

Cash Credit $88,200

Purchased discount Credit $1,800

Calculation: $90,000 - ($90,000 × 2%) = $88,200

Note: To record the payment.

March 11, No journal entry required.

March 18, Purchased Debit $10,000

Accounts payable Credit $10,000

Note: To record the purchased on account.

March 20, Cash Debit $17,640

Refunds payable Credit $17,640

Note: To record the return.

8 0

3 years ago

Witt Corporation received its charter during January of this year. The charter authorized the following stock:

damaskus [11]

Answer:

Stockholders' Equity = $735,000

Explanation:

This can be prepared as follows:

Witt Corporation

Stockholders' Equity Section of the Balance Sheet

At December 31, 2011

Details Amount ($)

Common stock (w.1) 344,000

Preferred stock (w.2) 65,000

Additional paid in capital - Common stock (w.3) 181,000

Additional paid in capital - Preferred stock (w.4) 49,000

Net income 96,000

Stockholders' Equity  735,000 

Workings:

w.1. Common stock = (Number of common shares issued in transaction a + Number of common shares issued in transaction c) * Par value of common stock = (40,000 + 3,000) * $8 = $344,000

w.2. Preferred stock = (Number of preferred shares issued in transaction b + Number of preferred shares sold in transaction c) * Par value of preferred stock = (5,500 + 1,000) * $10 = $65,000

w.3. Additional paid in capital - Common stock = (Number of common shares issued in transaction a * (Selling price per share of the transaction - Par value of common stock)) + (Number of common shares issued in transaction c * (Selling price per share of the transaction - Par value of common stock)) = (40,000 * ($12 - $8)) + (3,000 * ($15 - $8)) = $181,000

w.4. Additional paid in capital - Preferred stock = (Number of preferred shares issued in transaction b * (Selling price per share of the transaction - Par value of preferred stock)) + (Number of preferred shares issued in transaction c * (Selling price per share of the transaction - Par value of preferred stock)) = (5,500 * ($16 - $10)) + (1,000 * ($26 - $10)) = $49,000

5 0

3 years ago

Let’s use the model of the supply and demand for bank reserves to explain how the Federal Reserve can change aggregate demand in

nikdorinn [45]

Answer:

A) To cut the interest rate from 2% to 1.5%, the Federal Reserve needs to increase the money supply. The Open Market Committee will have to sell US Treasury security bonds in order to increase the money supply. This in turn will increase commercial bank's reserves, who in turn, will lower their interest rates in other to get rid of excess reserves.

B) Banks will lend more money because they now have excess reserves. It will increase the nation's money supply because banks create money when they make loans.

C) This will typically increase aggregate demand because a lower interest rate and cheaper loans result in a higher demand for financial securities. Firms will take more loans, they will use this loans for investments, and this investments will in turn increase production. Increased production means a higher supply of goods and services at a better price, and consumers will take advantage of it.

7 0

3 years ago