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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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What is the primary goal of the As-Is process model? Group of answer choices
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Lubov Fominskaja [6]

Answer:

d. Straight-line.

Explanation:

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3 0
3 years ago
A company buys an oil rig for $3,000,000 on January 1, 2018. The life of the rig is 10 years and the expected cost to dismantle
kherson [118]

Answer:

$346,266.00

Explanation:

The expense that should be recorded for 2018 as a result of the events is the depreciation charge plus the finance charge on the present of value of dismantling cost

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