Answer:
Government spending would have to change by <u>$1.6 billion</u>
Explanation:
The marginal propensity to consume (MPC) refers to the proportion of an increase in aggregate income that is spent on consumption of commodities by a consumer.
Since from the question, we have:
MPC = Marginal propensity to consume = 0.75
The MPC can therefore be used to calculate the fiscal multiplier which measures the effect of government spending on real GDP as follows:
Fiscal multiplier = 1 / (1 - MPC) = 1 / (1 - 0.75) = 1 / 0.25 = 4.0
Therefore, we have:
Change in government spending = Fiscal multiplier * Amount of targeted increase real GDP = 4.0 * $400 million = $1.6 billion
Therefore, government spending would have to change by <u>$1.6 billion</u> to generate $400 million increase in real GDP.
Answer:
The most I could pay for the investment is $12,960.09
Explanation:
The maximum a rational investor could pay acquire an investment is the present value of all future cash flows receivable from the investment.
In the case, the present of all cash flows is calculated thus:
Years Cashflows [email protected] 12% PV
1 5000 0.892857143 4,464.29
2 5300 0.797193878 4,225.13
3 6000 0.711780248 4,270.68
Total of present values 12,960.09
The discounting factor is calculated using the formula :
1/(1+r)^n where r and n are rate and number of years respectively.
Answer:
The lip gloss shop
Explanation:
Because a trend last for a short amount of time meaning you have to restock on so many new products all the time wasting more and more money, as to the lip glosses all colors can be sold or always be in style.
In the context of time-based competition, "build a better mousetrap and the world will beat a path to your door." could be interpreted as "those who make better innovations would obtain the most opportunities to obtain profit in the market"
Innovations only offers advantages in the competition because it offer different options for consumers that exclusively belong to US. But innovation is NOT THE ONLY factors for the product's success. There are other factors that can influence the success such as marketing strategies, condition of the economy
Answer:
an increase in the price of both
Explanation:
A decrease in the supply of paprika would cause an increase in the price of both substitute goods. When the supply of paprika falls, the demand will be greater than what is available for sale and this would cause the sellers to raise it's price afterall it is now scarce.
Also as a substitute good, more people would begin to switch to buying cummin which would raise the demand for cummin. This increase in demand for cummin would then cause the price of cummin to go up.
