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olga2289 [7]
4 years ago
8

Suppose that investment demand increases by $300 billion in a closed and private economy (no government or foreign trade). Assum

e further that households have a marginal propensity to consume of 80 percent. Ultimately, how much will aggregate demand increase? Enter your answer in billions. For example if your answer is $600 billion then enter 600. If your answer is $1,500 then enter 1500.
Business
1 answer:
aleksandrvk [35]4 years ago
4 0

Answer:

Aggregate demand increase by $1500 billion.

Answer is 1500

Explanation:

Investment demand increases by $300 billion.

MPC = 0.80

Multiplier = 1 / (1-MPC)

Multiplier = 1 / (1-0.8)

Multiplier = 1 / 0.2

Multiplier = 5

Multiplier = Change in GDP / Change in investment

5 = Change in GDP / $300 billion

Change in GDP = 5 * $300 billion

Change in GDP = $1500 billion.

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Explanation:

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4 years ago
Khalil Hamid Ali borrowed $12,000 and paid $1,890 in exact interest when the loan came due 11 to 2 years later. What rate of int
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The rate of interest that Khalil Hamid Ali paid for borrowing $12,000 and paying $1,890 as interest expense for 1.5 years is <em>10.5%.</em>

Data and Calculations:

Amount borrowed = $12,000

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Time period = 1.5 years

Rate of interest = 10.5% ($1,890/$12,000 x 1/1.5)

Thus, the rate of interest that Khalil Hamid Ali paid for borrowing $12,000 and paying $1,890 as interest expense for 1.5 years is <em>10.5%.</em>

Learn more about rate of interest here: brainly.com/question/25545513

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2 years ago
If the maturity date of a semi-annual coupon bond is February 20, 2039, on what date is the final coupon paid?
IrinaK [193]

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February 20, 2039

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