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mash [69]
3 years ago
9

Suppose that technological advancements stimulate $20 billion in additional investment spending. If the MPC = 0.6, how much will

the change in investment increase aggregate demand? Multiple Choice $33.3 billion $20 billion $12 billion $50 billion
Business
1 answer:
Leya [2.2K]3 years ago
7 0

Answer:

$50 billion

Explanation:

The net effect on aggregate demand of the additional investment spending will be derived by multiplying the increased spending by the Multiplier.

Multiplier = \frac{1}{1-MPC} = \frac{1}{MPS}

Where MPC is the marginal propensity to consumer, and

MPS, the marginal propensity to save.

Therefore the multiplier = \frac{1}{1-0.6} =\frac{1}{0.4} = 2.5

Accordingly, the increase in aggregate demand as a result of the increase in the investment

= 2.5 * $20 billion

= $50 billion

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Economic growth refers to a steady increase in the production of goods and services in an economic system.
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Answer:

<em>Economic growth refers to a steady increase in the production of goods and services in an economic system.</em><em> </em><em><u>True</u></em>

3 0
2 years ago
A group of products within a product class that are closely related because they perform a similar function, are sold to the sam
solniwko [45]

Answer:

Explanation:

Product Line

A product line represents related products under a single brand name produced, grouped and sold by the same company. Organisations use product lines to keep and expand their consumer base by adding products that will appeal to their customers in the same line of products which they are familiar with.

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3 years ago
Montclair Corporation had current and accumulated E&amp;P of $500,000 at December 31, 20X3. On December 31, the company made a d
siniylev [52]

Answer:

The tax consequences of the distribution to Montclair in 20X3 would be a $150,000 gain recognized and a reduction in E&P of $175,000.

Explanation:

The distribution company distinguishes profit on the distribution, which is included in E&P netting of tax and decreases E&P by rhe lands fair market value fewer the liability believed by the shareholders.

Therefore, The tax consequences of the distribution to Montclair in 20X3 would be a $150,000 gain recognized and a reduction in E&P of $175,000.

3 0
3 years ago
Match the financial statement with its description. To match them, click the Description and then click the Financial Report Nam
kherson [118]

Answer:

a-3 / b-2 / c-4 / d-1

Explanation:

Notes to financial statements: Includes a summary of significant accounting policies and explanations of specific items on the financial statements.

The notes are required by the full disclosure principle. Also referred to as footnotes. Provide additional information pertaining to a company's operations and financial position.

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is a process designed to provide reasonable assurance regarding the reliability of financial reporting.

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7 0
3 years ago
Which of the following is an example of strategic entry deterrence?
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Answer:

E. both a and b

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5 0
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