hypothetical economy in which households spend 0.5 of each additional dollar they earn and save the remaining 0.5
<h3>What is
hypothetical economy?</h3>
The paper investigates the consequences for a hypothetical economy of a set of government tax and spending policies that are unsustainable in the long run and are recognized as such by private individuals.
Comparative Economic Systems is a sub-category of economics that deals with the comparative study of various economic organization systems such as capitalism, socialism, feudalism, and the mixed economy.
The marginal propensity to consume is calculated by dividing the change in consumption by the change in income.
Each economy operates under its own set of conditions and assumptions. Traditional economies, command economies, mixed economies, and market economies are the four major types of economic systems.
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Answer:
The rule of 72 establishes that, to determine the time in which an investment will double its initial capital through the generation of compound interest, 72 must be divided by the interest rate number of said financial investment.
In the present question, the interest rate is 7.8%, with which the investment would double in 9.23 years (72 / 7.8 = 9.23).
Now, at the same time there will be an annual inflation of 4.9%, that is, an accumulated inflation of 45.22% (4.9 x 9.23 = 45.22). In other words, the real growth of investment will not be 100%, but the accumulated inflation will have to be discounted from said number, with which the real growth of investment will be 54.88% over those 9.23 years.
Answer:
Dividens paid in 2015: $85.000
Explanation:
TOTAL ASSETS 972.500
TOTAL LIABILITIES 450.000
Common Stock $ 370.000
Retained Earnings $ 152.500
TOTAL EQUITY $ 522.500
Retained Earnings Report
Opening retained earnings $ 0
Add: Net Income $ 237.500
Subtotal $ 237.500
Less: Dividens -$ 85.000
Total $ 152.500
