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
fgiga [73]
3 years ago
9

This question compares the effects of a tax cut on aggregate demand and aggregate supply. A tax cut of 150 is targeted to busine

ss enterprises so that, as their after-tax profits rise, they raise their spending on investment goods by the full 150. When subsequent rounds of increases in income occur, however, there is a normal marginal propensity to consume, and a multiplier of two. Investment has the following effect on aggregate supply: for every $3 of investment goods produced, annual output rises by $1.a) What increase in aggregate demand will result from this tax cut?b) What increase in aggregate supply will occur in the first year?c) Comparing your answers in a) and b), which impact is bigger?d) Assuming the tax reduction is permanent, how many years will it take before the effects on aggregate demand and aggregate supply are equal?e) Suppose the tax cut is not quite as well targeted toward the supply side as the government hoped. Of the cut of 150, initially 60 is spent on investment, 60 is spent on consumption, and 30 is saved. Answer questions a) through d) above under these circumstances.
Business
1 answer:
salantis [7]3 years ago
6 0

Answer:

Check the following explanation.

Explanation:

Ans a - Aggregate demand will increase by $150.

Ans b - Aggregate supply will increase by $50 in the first year.

Ans c - The aggregate demand impact is bigger.

Ans d - If the tax reduction is permanent then the aggregate demand and aggregate supply will be equal in 3 years.

Ans e - The aggregate demand increases by 120. The aggregate supply increases by 20. The aggregate demand impact is bigger. If the tax reduction is permanent then the aggregate demand and aggregate supply will be equal in 6 years.

You might be interested in
The difference between the basic eoq model and the production order quantity model is that
Marrrta [24]
EOQ stands for Economic Order Quantity. It<span> is the order quantity that minimizes the total holding costs and ordering costs.</span><span>
The difference between the basic EOQ model and the production order quantity model is that </span>the production order quantity model does not require the assumption of instantaneous delivery.
3 0
3 years ago
What are the basic sources of underwriter information?
BigorU [14]

The basic source of underwriting information is your completed application for term insurance

5 0
3 years ago
Read 2 more answers
Iron Works International is considering a project that will produce annual cash flows of $38,500, $47,200, $57,900, and $23,400
Ronch [10]

Answer:

18.625%

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 = $-112,500

Cash flow in year 1 = $38,500

Cash flow in year 2 = $47,200,

Cash flow in year 3 = $57,900,

Cash flow in year 4 = $23,400

IRR = 18.625%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

8 0
3 years ago
How have the evolving business environment and the emergence of free agent workers affected make-or-buy talent decisions?
lyudmila [28]
The business environment has drastically changed from old traditional methods to methods with fast improving technology and globalized work culture.
3 0
3 years ago
Charlie represents sue, a buyer. charlie is being paid by claude, the seller, through his brokerage. what's true about this situ
CaHeK987 [17]

Charlie represents sue, a buyer. charlie is being paid by Claude, the seller, through his brokerage. Normally they are prorated on closing day.

A seller is a sales facilitator responsible for initiating a sales pitch and driving the customer's sales experience. The seller assists the customer in providing the best possible solution regarding the products being sold.

A vendor is a general term for a person who buys or sells goods or services. A vendor buys a product or service and sells it to another company or individual.

Buyers are responsible for purchasing merchandise for their business to use or sell in their business. This position requires extensive research and contract negotiations with suppliers, maintaining inventory, evaluating high-quality merchandise, and the ability to stay within budget.

Learn more about seller here:brainly.com/question/906651
#SPJ4

7 0
1 year ago
Other questions:
  • Baby boomers represent a huge demographic segment for travel marketers. baby boomers are also heavily motivated by self-fulfillm
    15·1 answer
  • Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of i
    8·1 answer
  • During a recession, what is one way governments try to encourage growth? by increasing unemployment benefits by stopping governm
    7·2 answers
  • Concord Company pays cash dividends of $670. The entry for this transaction will include a debit of $670 to
    10·1 answer
  • A customer alleges wrongdoing on the part of a registered representative and files a complaint with the broker/dealer. The broke
    14·1 answer
  • If you owned a business what would be the way to protect your personal assets from liablity?
    13·1 answer
  • What are the portfolio weights for a portfolio that has 122 shares of Stock A that sell for $32 per share and 102 shares of Stoc
    14·1 answer
  • What is advertising?
    12·2 answers
  • If the price elasticity of demand for a product is 2. 5, then a price cut from $2. 00 to $1. 60 will:_______
    8·1 answer
  • As lynn is working on writing the text that will be incorporated into a new magazine ad for her company’s line of handbags, she
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!