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Anestetic [448]
3 years ago
12

If the marginal propensity to consume (mpc) is 0.9, the spending multiplier is _____, the tax multiplier is ______, and the bala

nced budget multiplier is _______, respectively.
Business
1 answer:
Margarita [4]3 years ago
8 0

Answer:

If the marginal propensity to consume (mpc) is 0.9, the spending multiplier is <u>10</u>, the tax multiplier is -9, and the balanced budget multiplier is <u>1</u>, respectively.

Explanation:

These can be calculated as follows:

a) Calculation of spending multiplier

To calculate this, we use the formula for calculating the spending multiplier as follows:

Spending multiplier = 1 / (1 - mpc)

Since mpc = 0.9, we have:

Spending multiplier = 1 / (1 - mpc) = 1 / (1 - 0.9) = 1 / 0.1 = 10

b) Calculation of tax multiplier

To calculate this, we use the formula for calculating the tax multiplier as follows:

Tax multiplier = -mpc / mps

Note that the tax multiplier as given above is negative because increase in tax by the government makes the multiplier to work in reverse since the money is leaving the circular flow.

Since what is not consumed is saved, we have:

mps = 1 - mpc = 1 - 0.9 = 0.1

Therefore,

Tax multiplier = -0.9 / 0.1 = -9

c) Calculation of balanced budget multiplier

To calculate this, we use the formula for calculating the balanced budget multiplier as follows:

Balanced budget multiplier = Spending multiplier + Tax multiplier = 10 + (-9) = 10 - 9 = 1

Note that balanced budget multiplier is always equal to 1 as obtained above.

Conclusion

Therefore, if the marginal propensity to consume (mpc) is 0.9, the spending multiplier is <u>10</u>, the tax multiplier is -9, and the balanced budget multiplier is <u>1</u>, respectively.

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Marizza181 [45]

Answer:

1- Wages Expense (Dr.) $1,025

Wages Payable (Cr.) $1,025

2- Wages Expense (Dr.) $1,845

Wages Payable (Cr.) $1,025

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Explanation:

Wages expense = $205 * 5 days a week = $1,025 per week.

Wages expense = $205 * 4 days a week = $820 per week.

7 0
3 years ago
1. Raphael pays Better Buy $800 to for a new high-definition television (HDTV) and its installation. He's attracted by Better Bu
dsp73

Answer:

A. Raphael spend $800

B.$800

C.VALUE ADDED

Explanation:

A. The amount of $800 is the amount that would be included in the expenditure method reason been that Rapheal used the amount of $800 to pay for a new high-definition television (HDTV) as well as its installation

B. The total contribution to GDP which is measured by the expenditure method, is the amount of $800 calculated as :

The Stages of Production; The Sale Value - The Cost of Intermediate Goods = VALUE ADDED

The Home Station $50 - $0 = $50

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Better Buy $800- $650=$150

TOTAL $800

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C.The contribution to GDP that you found using the expenditure approach corresponds to the sum of the VALUE ADDED at each stage of production

8 0
3 years ago
YoYo Fashion December 31, 2013 balance sheet showed total common equity of $5,500,000 and 250,000 shares outstanding. During 201
abruzzese [7]

Answer:

$23.6 per share

Explanation:

Given that,

Total common equity = $5,500,000

Shares outstanding = 250,000

Net income = $525,000

Dividends paid out = $125,000

Total value at the end:

= Total common equity + Net income - Dividends paid out

= $5,500,000 + $525,000 - $125,000

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7 0
3 years ago
In a process costing system, the application of factory overhead usually would be recorded as an increase in: (CPA adapted) A. F
otez555 [7]

Answer: Factory overhead control

Explanation: Factory overhead is the account where the amount of cost incurred while manufacturing a product is recorded and no direct labour or material is recorded. When the manufactured goods are finished and produced they are recorded as expenses when the goods are sold as manufactured finished products.

All the expenses related to the factory are included in this account such as rent, utility, electricity, supplies, tools. Factory overhead is known as manufacturing burden or expenses.  

7 0
3 years ago
Find out equilibrium price and output for the following market condition.
Ierofanga [76]

Answer:

At equilibrium demand is equal to supply therefore  

Qd=Qs

50-2P=3P

By collecting like terms

50=3P+2P

50=5P

P=10

THEREFORE  equilibrium price  is 10

Explanation:

6 0
3 years ago
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