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cricket20 [7]
4 years ago
14

If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion an

d cause inflation. If the marginal propensity to consume (MPC) is 0.80, federal policymakers could follow Keynesian economics and restrain inflation by decreasing
A. government spending by $200 billion
B. taxes by $100 billion
C. taxes by $1,000 billion
D. government spending by $1,000 billion
Business
2 answers:
timofeeve [1]4 years ago
5 0

Answer:

A) government spending by $200 billion

Explanation:

The government spending multiplier is calculated by dividing 1 by marginal propensity to save.

marginal propensity to save (MPS) = 1 - MPC = 1 - 0.8 = 0.2

government multiplier = 1 / 0.2 = 5

since we need to reduce aggregate demand by $1,000 billion, then we need to decrease spending by:

spending decrease x multiplier = $1,000 billion

spending decrease = $1,000 billion / 5 = $200 billion

gladu [14]4 years ago
4 0

Answer:

A

Explanation:

Going by the above scenario, federal policymakers could follow Keynesian economics and restrain inflation by reducing government spending by $200 billion.

Cheers

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icang [17]

Answer:

Tim imposes a Negative externality on his neighbor in the form of noise pollution.

The command-and-control policy might the landlord impose is : a) A rule that music could not be played above a certain decibel level

(True)According to the Coase theorem, Tim and Brian might not be able to reach an agreement if the transaction costs are high.

Explanation:

As given ,

Brian loves opera and hates rock 'n' roll. Tim loves playing rock 'n' roll music at high volume.

In this case, Tim imposes a Negative externality on his neighbor in the form of noise pollution.

Because Tim's rock 'n' roll music disturb Brian and it effects negatively because due to Tim's music , Brian is unable to listen opera properly

Now,

The command-and-control policy might the landlord impose is :

a) A rule that music could not be played above a certain decibel level

Now,

If the landlord lets the tenants do whatever they want.

According to the Coase theorem, Tim and Brian might not be able to reach an agreement if the transaction costs are high.

It is True

Because if transaction cost is low , then Tim can pay compensation to Brian for high volume of music . But if transaction cost is high then they can not do any negotiation.

5 0
3 years ago
Selected information from Large Corporation's accounting records and financial statements for 2018 is as follows ($ in millions)
Elena-2011 [213]

Answer:

Large most likely reports net cash outflows from investing activities of $9 million.

Explanation:

Large Corporation

Statement of cash flows (extract)

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Proceeds from sale of land and buildings          24

Cash paid to acquire office equipment              (19)

Net cash flows from investing activities         ($9)

Note that the purchase of treasury stock belongs to financing activities section of the cash flows, while gain from sale of land and buildings  and investment revenue belong to operating activities section of the cash flows

7 0
3 years ago
An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $7,900. If Allowance
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Answer:

option d) debit to Bad Debt Expense for $7,200

Explanation:

Data provided :

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credit balance for the allowance for doubtful accounts  =  $ 700

Therefore,

the net bad debt expenses of the company = $ 7,900 - $ 700 = $ 7,200

Hence,

the<u> correct answer is </u><u>option d) debit to Bad Debt Expense for $7,200</u>

7 0
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Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asse
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Answer:

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By definition, a country is said to have a <em>comparative advantage</em> over another, when they can produce a certain good or service at a lower marginal or opportunity cost.

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d) Costco didn't issue nor sold any stocks during that financial year, instead it purchased treasury stocks for $328 million.

3 0
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