GDP stands for gross domestic product.
MPC stands for marginal propensity to consume (the ratio of the ratio of change in consumption to change in income)
From MPC you obtain the GDP Multiplier, which gives the relationship between a change in a particular expenditure and the GDP.
This is: Change in GDP = Mutliplier * Change in expenditure
The multiplier is equal to 1 / [ 1 - MPC].
Now use that information to calculations.
<span>Change in GDP with MPC of 0.9
multiplier = 1 / [1 - 0.9 ] = 1 / 0.1 = 10
Change in GDP = 8 billions*10 = 80 billions.
Change in GDP with MPC of 0.8 </span>
multiplier = 1 / [1 - 0.8] = 1 /0.2 = 5
Change in GDP = 8 billions*5 = 40 billions
Answer:
The correct answer to this question is that the amount of loss suffered by Bennett cannot be taken out because no information has been given in the question regarding sale of the land.
Explanation:
In the given above question Bennett purchased a tract of land for $20,000 in 2012, thinking that the value of land would increase to $200,000 when the new highway would be constructed but that didn't happen and the value of the property fell to $15,000. Here we can't tell anything about the loss suffered by Bennett because there has been no information given regarding the selling of the land and if he hasn't sold the land then that means there is no loss.
If he would have sold the land then he would have suffered a loss of $5000($20,000 -$15,000).
Answer:
PAYBACK PERIOD
Year Cashflow Cummulative cashflow
$ $
0 (16,000) (16,000)
1 8,000 (8,000)
2 6,000 (2,000)
3 5,000 3000
4 6,000
5 5,000
Payback period
= 2 years + 2,000/5,000
= 2.4 years
Explanation:
In this case, we need to deduct the initial outlay from the cashflows for each year until the initial outlay is fully recovered.
Answer:
The correct answer is A
Explanation:
Seasoned loan is the loan which is defined as the loan that has been made out for at least a year, in which the borrower of the loan has a good history in relation to the payment of the loan. It is considered a sign that the loan will be unlikely to default. And it may command the higher prices on the secondary market.
In short, it is defined as the loan which has been paid on time and the adequate amount of time to give the lender, the belief that it will be continue in this way.
So, it is a loan with the payment record of the payments made by the borrower.
