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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

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When Unraveling the Unit Circle the sine function creates a relationship between the _________and the ________ starting at 0 rad
notka56 [123]

Answer:

Vertical distance

y-axis

Horizontal distance

x-axis

where n are integers

Explanation:

The relationship between x-axis and y-axis is determined by cosine function. The sine and cosine functions have a domain of all real numbers. These distances are determined by the vertical distance ratio.

3 0
3 years ago
A company, which is currently operating at full capacity, has sales of $2,480, current assets of $820, current liabilities of $5
forsale [732]

Answer:

$61.60

Explanation:

Equity funding need =  Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings

Equity funding need = $2,739 - $561 -  $1,980 - $136.40

Equity funding need = $61.60

<u>Workings</u>

Projected assets = (Current assets + Fixed assets) * 1.10 = 820+1,670 * 1.10 = $2,739

Projected liabilities = Current liabilities * 1.10 = 510 * 1.10 = $561

Current equity = Current assets + Fixed assets - Current liabilities = 820 + 1,670 - 510 = $1,980

Projected increase in retained earnings  = Sales*5% * 1.10 = $2,480*5% * 1.10 = 124*1.10 = $136.40

5 0
3 years ago
Whitewater Rapids provides canoes to tourists eager to ride Whitewater river's rapids. Management has determined that there is o
alina1380 [7]

Answer:

Expected loss without insurance = $850

Explanation:

Given:

Probability to got injured or killed = 1 / 1000

Law suit average cost = $850,000

Deductible insurance = $100,000

Expected loss without insurance = ?

Computation of Expected loss without insurance:

Expected loss without insurance = Lawsuit average cost × Probability to get injured or killed

Expected loss without insurance = $850,000 × (1 / 1000)

Expected loss without insurance = $850

8 0
3 years ago
Gilberto's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Gilberto's very tiny kitchen has ba
Leno4ka [110]

Answer:

However, Gilberto's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Gilberto lets them know how many workers he needs for each day of the week. In the short run, these workers are <u>VARIABLE</u> inputs, and the ovens <u>FIXED</u> inputs.

Explanation:

In the long run, all inputs are variable. E.g. in 5 years Gilberto might build his own pizza place and he will be able to make the kitchen as large as he wants.

But in the short run, some inputs are variable because they can be changed immediately, e.g. the number of workers changes on a weekly basis. While other inputs are fixed, and cannot be changed, e.g. Gilberto has a two yer lease contract for the ovens, so he will continue to use these ovens until the lease expires (in 2 years).

The long run and short doesn't depend on time, but on the ability of being able to change the inputs consumed by a business. The long run might represent 10 years for a company that signed a 10 year lease contract.        

5 0
3 years ago
Choose all that apply.<br> Spreadsheets can be used to
mezya [45]

Answer:

create specific budgets for things like vacations or a wedding

calculate the amount of mortgage payments or car payments

4 0
2 years ago
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