1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
olga2289 [7]
3 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]3 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.

You might be interested in
Saturn Systems, an electronic goods manufacturer, sells its LED bulbs to Shockwave Enterprise, which in turn sells those bulbs t
AVprozaik [17]

Answer:

C. retailer

Explanation:

A retailer is a business entity that buys goods from manufacturers or wholesalers and sells them to the end-users.  A retailer is, therefore, a middleman who helps customers acquire products from manufacturers.

There are several types of retailers classified according to their size and nature of business. Departmental stores are the largest retailers. They stock a wide range of products from electronics, jewelry, food items, furniture, clothing, to books, all under one roof. Other retailers include supermarkets, drugstores, restaurants, convenience stores, and discount stores.

Retailers make profits by buying goods at a wholesale or factory price and selling them at a higher retail price.

4 0
3 years ago
Kokomochi is considering the launch of an advertising campaign for its latest dessert​ product, the Mini Mochi Munch. Kokomochi
Alla [95]

Answer:

Check Explanation.

Explanation:

Note that the amount are in millions(dollar).

Year one: the sales of Mini Mochi Munch = $ 8.8 million = 8.8, sales of other products = $ 1.7 million. Hence, the gross profit = (8.8 × 38%) + (8.8 × 23%) = 5.368.

The selling, general and administrative expenses = 4.9 and the depreciation is zero.

Then, the EBIT = the gross profit -selling, general and administrative expenses - Depreciation.

EBIT = 5.368 - 4.9 - 0 = 0.468.

Less income tax at 38% = 0.17784.

incremental earnings= EBIT - Less income tax at 38%.

incremental earnings = 0.468 - 0.17784.

Year two: the sales of Mini Mochi Munch = $ 6.8 million = 6.8, sales of other products = $ 1.7 million. Hence, the gross profit = (6.8 × 38%) + (6.8 × 23%) = 4.148.

The selling, general and administrative expenses = 0, and the depreciation is zero(0).

Then, the EBIT = the gross profit -selling, general and administrative expenses - Depreciation.

EBIT = 4.148 - 4.9 - 0 = −0.752.

Less income tax at 38% = −0.28576.

incremental earnings= EBIT - Less income tax at 38%.

incremental earnings = −0.752 - −0.28576 = −1.03776.

3 0
3 years ago
Tp-38 by law, what must you do if oil or fuel spills into the water?
Alexxx [7]
Report it to the U.S Coast Guard National Response Center
4 0
3 years ago
Read 2 more answers
Which of the following is a likely cause of​ globalization? A. Trade barriers have been added worldwide. B. Developing economies
Vesna [10]

Answer: Option B

Explanation: Globalization refers tot he process under which certain business entities starts operating their business in many different countries of the world.

One of the major reasons behind the increasing globalization is the condition in developing nations. The developing nations like India and Pakistan have a large population with a strong purchasing power, but due to lack of technology and capital these economies lack competitive producers.

Therefore, every second business firm with sufficient resources wants to operate in these economies for profit maximization.

4 0
3 years ago
As a rule of thumb, how often should an entrepreneur reevaluate her compensation package?
shusha [124]

Answer:

12 months

Explanation:

The fiscal or financial period of a business lasts for 12 months or one year. It means that at the end of that  12 months, the business prepares its financial statement to determine its profitability. The business assesses its growth, success, and failure for the period.

After evaluating performance, planning for the next period of 12 months begins. The entrepreneur prepares a budget for the year, including their compensation. Compensation for the entrepreneur should be budgeted and reviewed every year together with the other budget items.

7 0
2 years ago
Read 2 more answers
Other questions:
  • Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its wo
    5·1 answer
  • The use of activity-based costing information to support the decision-making process is known as:
    11·1 answer
  • On March 1, 2012, Kelly Company lent $3,500 to Tim on a 1-year 6% promissory note. The amount of interest to be accrued on Decem
    9·1 answer
  • Suppose you have two indifference curves U 1 and U 2 representing the consumption of two normal goods. If U 2 is twice as far fr
    11·1 answer
  • N 2011, brazil had a gdp of $2.3 trillion and a per capita gdp of $11,800. a fifth of the population lived below the poverty lin
    9·1 answer
  • The economic system in which the state controls the economy is called
    10·1 answer
  • 2. Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will
    15·1 answer
  • Items that regularly appear on the financial statements of Maple Park Theatres Corp. The amounts shown for balance sheet items a
    14·1 answer
  • Capitol Supply's sales and sales force have continued to expand. Now, the firm plans to add a fleet of company cars as part of i
    5·1 answer
  • An approach to managing organizations that emphasizes division of labor and favors hierarchy is the _______________.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!