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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.

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You are in charge of your country's currency, which is backed by a gold standard. Unfortunately, gold production is dropping sha
Dahasolnce [82]

Answer:

C. Move to fiat currency

Explanation:

Gold Standard

Gold standard is a monetary system where the paper money issued by the government through its monetary authority must be backed a defined quantity of gold. But nations have since moved from that gold standard and to a monetary system known as  Fiat currency. under gold standard the value of money is commensurate with the value of gold backing such a currency.

Fiat currency

When monetary authority issue paper money that is not backed by gold but  with the faith of the issuing authority, such is called fiat currency or fiduciary issue. Fiduciary issues is purely based on trust in the government issuing it.

4 0
3 years ago
Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ g
Brrunno [24]

The firm is not engaging in international trade is True.

(B) The firm is using a regional approach to international expansion.

<u>Explanation:</u>

When a company wants it's business to grow and expand in a new country it uses the regional approach. It is generally used when the company is quite established and it has a nice foothold in the country.

In the regional approach the business is first set up in the country and when it gains power it starts spreading across the borders to get a region as a whole.

4 0
3 years ago
Suppose you owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or
lianna [129]

Answer:

Never, you will continue to be in debt

Explanation:

the interest per month are 1% of the unpaid amount:

3,000 x 1% = 30 interest per month

the minimum payment is 30 dollars

Therefore, by doing the minimum payment we are just coering the interest generated per month we are not doing any amortization on the principal Hence we cannot repay the debt.

3 0
3 years ago
The primary purpose of ________ is to encourage the expenditure of funds on research and development to create new products.
Firdavs [7]

I guess the correct option is D.

The primary purpose of patents and copyrights is to encourage the expenditure of funds on research and development to create new products.

8 0
3 years ago
Rust Pipe Co. was established in 1994. Four years later the company went public. At that time, Robert Rust, the original owner,
irina1246 [14]

Answer:

Rust Pipe Co.

The Percentage of the Founder's Family Votes to Class B  Votes:

= Founder's Family Votes / Class B Votes x 100 = 577,775/1,747,475 x 100 = 33.-6%

Explanation:

Total votes for the Founder's Family = 52,525 x 11 = 577,775

Class B votes = 1,747,475 (1,800,000 - 52,525) x 1 vote = 1,747,475

Founders of companies who want to go public but still retain control of the entity may decide to issue two or more classes of shares in order to allocate more voting rights to some classes than the others.

In this case, while the founder's family currently held 52,525 shares representing 29.2% of the total outstanding shares, in voting rights, the founder's family has 33.6% control.

4 0
3 years ago
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