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GalinKa [24]
3 years ago
12

According to the balanced budget multiplier, an increase in government spending of $10,000 that is financed by an increase of $1

0,000 in taxes will have what effect on the economy when MPC is 0.80?
a. Income will not change.
b. Income will increase by $8,000.
c. Income will increase by $50,000.
d. Income will increase by $10,000.
Business
1 answer:
tia_tia [17]3 years ago
6 0

Answer:

D) Income will increase by $10,000.

Explanation:

The balanced budget multiplier measures the change in aggregate output when government spending increases by increasing taxes. The formula for determining the balanced budget multiplier is by adding government expenditures multiplier and the tax multiplier. The balanced budget multiplier is always equal to one, therefore the net change in aggregate production (income) is equal to the increase in government spending.

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Answer:

specialty store

Explanation:

Based on the scenario being described within the question it can be said that for this you would most likely choose a specialty store. This refers to a retail business that focuses on very unique and specific product categories, in which everything revolves around that category. This category may be unique but offer a wide variety of product offering within it.

8 0
3 years ago
If an increase occurs in the demand for the output of industry A, we would expect all of the following to happen except:A. an in
ruslelena [56]

Answer:

The correct answer is option B.

Explanation:

The total revenue and profits of the industry as the price level  increases with increase in the demand.

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In order to produce more output the industry will require more inputs, so the demand for inputs will increase.

An increase in the demand for inputs will be accompanied by increase in their prices.

There will not be any decline in the price of inputs.

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3 years ago
In the theory of perfect competition, the assumption of easy entry into and exit from the market implies:_____.
Hitman42 [59]

The assumption in perfect competition that there is an easy entry and exit from the market implies that firms will make a zero economic profit in the long run.

<h3>Why do firms make a zero economic profit?</h3>

In a pure competition, companies are allowed to freely enter and leave.

They take advantage of this to enter a market when prices are high and economic profit is being made.

As more firms enter, the economic profit keeps decreasing as prices decrease until this profit gets to zero and then turns to economic losses.

At this point, some firms will leave the market to stop making losses. When they do, the supply will decrease which leads to prices rising once more.

The cycle will then repeat itself and keep the companies at a zero economic profit in the long run.

Find out more on perfect competitions at brainly.com/question/1748396

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3 0
2 years ago
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3 years ago
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Basile [38]

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