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
steposvetlana [31]
3 years ago
6

Suppose the Japanese economy has been experiencing slow growth. As a result, the Prime Minister, who thinks John Maynard Keynes

was the greatest economist ever, has decided to increase government spending. The Prime Minister asks the head of the economic council to determine the increase in government spending necessary to bring the economy to full employment. Assume there is a GDP gap of 1 trillion yen and the marginal propensity to consume (MPC) is 0.60. What advice should the head of the economic council give the Prime Minister
Business
1 answer:
snow_tiger [21]3 years ago
4 0

Answer: The recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen

Explanation:

From the question, we are informed that GDP gap of 1 trillion yen and the marginal propensity to consume (MPC) is 0.60. Also, to close the GDP gap, the prime minister has decided to increase government spending. This means that there will be a recessionary gap because the actual GDP will be less than the potential GDP.

Fir the economy to be brought to its potential GDP, the spending of the government will give a stimulus to the economy. Since MPC is 0.6, the multiplier will be:

= 1/1-MPC

= 1/1 - 0.6

= 1/0.4

= 2.5

The government spending will then increase in order to close the recessionary gap as:

∆Y = ∆G × Multiplier

100 = ∆G × 2.5

∆G = 100/2.5

∆G = 40

Therefore, the recessionary gap will be equal to 1 trillion yen divided by 2.5 or 0.4 trillion yen.

You might be interested in
According to liquidity preference theory, money supply and money demand are balanced by adjustments of
givi [52]

Answer:

Nominal Interest rate

Explanation:

According to liquidity preference theory, money supply and money demand are balanced by adjustments of Nominal Interest rate. Suppose you have some money, you will decide to either keep it in cash or in the bank. If you keep the money in cash, the opportunity cost of keeping in cash is the interest rate earned if you would have kept the money in the bank. Bank offers the nominal interest rates and not the real interest rates. Bank rates are not adjusted for inflation. So if the interest rate on money increases the opportunity cost of holding money in cash increases. If money supply in the economy increases the demand for money will increase only by reducing the interest rate because then only people fir hold cash and demand higher money.  So, money supply and money demand are balanced by adjustments of the Nominal Interest rate.

5 0
3 years ago
Lorinda has started to think about saving for retirement. She reads a recommendation that says she should save at least 3/10 of
Bumek [7]

Answer:

          \large\boxed{\large\boxed{\$ 13,200}}

Explanation:

This is an algebra question about fractions.

You need to find 3/10 of the income, and the income is $44,000.

You must muliply the fraction 3/10 by the $44,000 income.

To multily one fraction by a whole number you convert the whole number to a fraction with denominator 1. Then multiply numerator with numerator and denominator with denominator. This is how:

                     \dfrac{3}{10}\times \dfrac{\$ 44,000}{1}=\dfrac{3\times \$ 44,000}{10}=\\\\\\=\dfrac{\$ 132,000}{10}=\$ 13,200

3 0
3 years ago
Explain global business planning system in detail
Orlov [11]

Explanation:

in global business obligation plan more ideas

8 0
3 years ago
Campbell's has been marketing soup in Japan for more than 40 years. Early on, Japanese consumers were not receptive to ads featu
Alex

Answer:

D, product-communication adaptation

Explanation:

Product adaptation can be defined as the process of modifying a product to make it useful for a variety of users.

Communication adaptation can also be defined as the change in a product's communication as a result of a change in product strategy.

Product-communication adaptation can be defined as the modification of a product for a variety of users but ensuring that the marketing of the product is through standard communication channels.

In the case of Campbell adapted his product to look like M'm M'm Good product but ensured that he used a standard communication channel (ads) to market his product.

Cheers.

6 0
3 years ago
Your company has earnings per share of $ 4.19. It has 1.9 million shares​ outstanding, each of which has a price of $59. You are
sveticcg [70]

Answer:

If the current earnings per share of TargetCo. are $2.10, and the times earnings multiple is 12, the relative valuation should result in a $2.10 x 12 = $25.20 per stock. This means that the premium per stock = $25.20 - $21 = $4.20, and the total premium paid for all the 1.9 million shares = $7.98 million.

8 0
3 years ago
Other questions:
  • Is the process of planning, scheduling, and then controlling the activities during system development?
    6·1 answer
  • What is the definition of liquidity?
    15·2 answers
  • The shadow banking system refers to Group of answer choices nonbank financial institutions such as investment banks and hedge fu
    10·2 answers
  • You purchased an annual-interest coupon bond one year ago with six years remaining to maturity at the time of purchase. The coup
    9·1 answer
  • A nurse manager is preparing to talk to her staff about quality improvement at a staff meeting. Which statement below is a corre
    5·2 answers
  • partial credit, E12-19A (similar to) Turner Hardware is adding a new product line that will require an investment of $ 1 comma 5
    5·1 answer
  • The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two
    5·1 answer
  • 70 Marketing Dynamics .. .. : : . . : Part 4: Be Your Own Leader Leaders on a Top Secret Mission On December 6, 2011, a woman wa
    14·1 answer
  • The Future Business Leaders of America (FBLA) is the best organization to
    5·1 answer
  • What are capital gains on an investment.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!