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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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Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first three mont
rewona [7]

Answer:

The sales budget is prepared below. See table below.

Explanation:

<em>A sales budget shows the expected revenue and units to be sold for a forth coming accounting period. The sales budget for Patrick Inc would look as follows:</em>

Sales budget

Month        Units                 Revenue($)

January      41,000                1,435,000

February      38,000             1,330,000

March          50,000              1<u>,750,000</u>

                                               <u>4,515,000</u>

Note the revenue per month is determined by multiplying the unit to be sold by the price per unit of $35

6 0
3 years ago
How can you value our farmers in your own simple way​
SOVA2 [1]

Answer:

By helping them

Explanation:

We need to cooperate

3 0
3 years ago
Ken's Car Repair uses a 35.00% material loading charge and a labor rate of $23.00 per hour. How much will be charged on a job th
Art [367]

Answer:

the amount charged on a job is $401.50

Explanation:

The computation of the amount charged on the job is shown below:

The Amount to be charged is

= Material Loading Charge + Labor Charge + Materials Cost

= 35% × $110 + $23 Per Hour × 11 Hours + $110

= $38.50 + $253 + $110

= $401.50

Hence, the amount charged on a job is $401.50

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

4 0
3 years ago
A small business has determined that the machinery they currently use will wear out in 16 years. To replace the new machine when
Afina-wow [57]

Answer:

Present value deposit today = 216,886 (Approx)

Explanation:

Given:

Number of year (n) = 16 years x 4 quarter = 64

Rate of interest (r) = 1.6% = 0.016 / 4 = 0.004

Future value = $280,000

Present value = ?

Computation of present value deposit today:

Present\ value = \frac{Future\ value}{(1+r)^n}\\\\Present\ value = \frac{280,000}{(1+0.004)^{64}}\\\\Present\ value = \frac{280,000}{1.291}\\\\Present\ value = 216,886.135

Present value deposit today = 216,886 (Approx)

8 0
3 years ago
The balance sheet identifies the productive resources (assets) that a firm uses to generate income, as well as the sources of fu
docker41 [41]

Answer:

A) True

Explanation:

The Balance Sheet is a snapshot of the financial situation of a company at the end of the accountable period. It shows which productive resources (assets) the company has for the development of its activities and how they are financed. Assets can be financed by external (Obligation with creditors – Liabilities) or internal sources (Issuing equity shares - Shareholders' equity). As every Asset must be financed either or both with Liabilities or Shareholders' equity, in the Balance Sheet, the accountable equation is represented.

5 0
3 years ago
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