1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
egoroff_w [7]
3 years ago
6

If the marginal propensity to consume is 0.6, the marginal propensity to save is 0.4, and government spending increases by $2 bi

llion at the same time taxes rise by $2 billion, equilibrium income will:
Business
2 answers:
WINSTONCH [101]3 years ago
7 0

Answer: Equilibrium income will increase by $800 million

Explanation:

When taxes rises  means tax rate increased, an increase in tax rate decreases consumption and income. Increase in Government spending increases  income

the increase Government Spending by $2 Billion will increase income by $2 Billion.  An increase in taxes will decrease Consumption by $1.2 Billion ($2 billion x 0.6)

Equilibrium income will increase by $800 million (2 billion - 1.2 billion)

zvonat [6]3 years ago
4 0

Answer:

increase by $2 billion

Explanation:

If the government increases both spending and taxes by the same amount, equilibrium income will increase by the amount of the government spending which will result in an increase in total aggregate demand.

If we follow a Keynesian analysis, we can determine the net effect:

change produced by government spending increase = change G / G multiplier = $2 / 0.4 = $5 billion

G multiplier = 1 - MPC or MPS

the change produced by taxes = - (MPC x change T) / MPS = - (0.6 x $2 billion) / 0.4 = -$1.2 billion / 0.4 = -$3 billion

net effect = $5 billion - $3 billion = $2 billion

You might be interested in
You currently own 100 shares of stock in Beverly Brothers Inc. The stock currently trades at $120 a share. The company is contem
Gwar [14]

Answer:

No option is correct, since you will have 200 shares and each share should be worth around $60.

Explanation:

If the 2-for-1 stock split takes place then you will have 200 shares instead of 100. For every 1 share that you currently own, the corporation will issue another share.

Since the price of the shares was $120 before the stock split, after the stock split the price will be divided by two (the same proportion). So each new share will cost approximately $60.

In order for option 2 to be correct, the stock spit should have been 3-for-1.

8 0
3 years ago
Given that Gabbie is looking for a budget-priced flight home for the holidays, she will need to find out what various options ex
PSYCHO15rus [73]

Answer:

Gabbie is in the Information Search phase of the consumer decision process. This is the second phase.

Explanation:

The Consumer Decision Process is a situation in which a consumer passes through the phases listed below in order to make a final purchase decision.

1. The first phase where the consumer recognizes a need they have to fulfil.

2. The second phase in which Information search is carried out in order to determine how best to meet this need.

3. The third phase which Alternative Evaluation phase. Here, the consumer evaluates each medium that can fulfil their needs.

4. The fourth phase, which is the decision making phase. Here, the consumer makes their purchase decision based on the evaluation of alternatives in the previous phase.

4 0
3 years ago
Retained earnings are?
Yakvenalex [24]

Answer:

Retained earnings is the amount of net income left over for the business after it has paid out dividends to its shareholders. The decision to retain the earnings or distribute them among the shareholders is usually left to the company management.

Explanation:

hope this helps you with your question

6 0
3 years ago
A company reported net income of $6 million. During the year the average number of common shares outstanding was 3 million. The
malfutka [58]

Answer:

The EPS is approximately:

it can be any of them:

  • if preferred dividends = $4,800,000, then EPS = $0.40 (option A)
  • if preferred dividends = $720,000, then EPS = $1.76 (option B)
  • if preferred dividends = $0, then EPS = $2 (option D)

EPS = (net income - preferred dividends) / outstanding shares = ($6,000,000 - preferred dividends) / 3,000,000 shares

The Price/Earnings ratio is approximately:

  • if EPS = $0.40, then PE ratio = 12.5 (option D)
  • if EPS = $1.76, then PE ratio = 2.84 (option C)
  • if EPS = $2, then PE ratio = 2.5 (option B)

Price/earnings (PE) ratio = share price / EPS = $5 / EPS

EPS cannot be $1.80, since PE ratio = 2.78 and that is not an option.

Some companies have a higher share price for the same level of earnings. Why?

Some stocks like Amazon have a very low EPS, form any years its EPS was very low bu its stock price kept rising. The stock price is based mostly on potential future earnings, not current earnings. A company that is being liquidated might have a high EPS, but a very low stock price since it will stop operating soon.  

7 0
3 years ago
To analyze which tasks to crash in order to shorten your schedule, you want to sort tasks by duration and then cost. Which appro
Pachacha [2.7K]

The approach that you should use to accomplish this would be to use the cost feature along with the duration and the cost options.

What to do to crash a schedule

In order to crash a schedule you have to

  • analyze the part
  • identify the tasks which could be shortened
  • Make calculations for each task
  • Choose the project that would cost you the less money.
  • Prepare the crash budget.

Read more on schedule crashing here:

brainly.com/question/14069240

4 0
2 years ago
Other questions:
  • If you had a bank account, which two methods of completing transactions do you think you would use most frequently? Why?
    12·1 answer
  • What is a great example of using cluster analysis in business to create target-marketing strategies?
    6·1 answer
  • Which of the following customers generally switch companies easily?
    9·2 answers
  • Patrick patrone (single, 2 allowances), $925 wages __________ carson leno (married, 4 allowances), $1,195 wages __________ carli
    9·1 answer
  • A lender estimates that the closing costs on a $165,000 home loan will be $6,187.50. The actual closing costs were 3.5% of the l
    13·2 answers
  • When an institution wishes to take a large position in a municipal bond issue but does not want its activities to be well known,
    6·1 answer
  • A home mortgage loan closed on July 1 for $165,000 at 4.5% interest amortized over 30 years at $836.03 per month. Using a 360-da
    6·1 answer
  • If a bank holds $450,000 in required reserves, and $1.8 million in total deposits, then the deposit expansion multiplier is:____
    7·1 answer
  • Help asap plzzzzzzzzzzzzzzzzzzzzzzzzzzz
    10·1 answer
  • Question #2: Why should we simplify expressions in algebra Using race
    14·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!