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
oksian1 [2.3K]
3 years ago
8

Suppose the marginal propensity to consume is 0.75 and the government spending multiplier is 4. If the government decreases its

purchases by $100 million, the aggregate demand curve will shift to the by $ million. If the government increases income taxes by $100 million, the aggregate demand curve will shift to the by $ million.
Business
1 answer:
kvasek [131]3 years ago
5 0

Answer:

Left by $400; Left by $300

Explanation:

Given that,

Marginal propensity to consume, MPC = 0.75

Government spending multiplier = 4

(a) If the government decreases its purchases by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in government spending to the government spending multiplier.

Aggregate demand curve shift left by

= Change in government spending × Government spending multiplier

= $100 × 4

= $400 million

(b) If the government increases income taxes by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in taxes to the tax multiplier.

Tax multiplier:

= MPC ÷ (1 - MPC)

= 0.75 ÷ (1 - 0.75)

= 0.75 ÷ 0.25

= 3

Aggregate demand curve shift left by

= Change in taxes × Tax multiplier

= $100 × 3

= $300 million

You might be interested in
LRQ Inc. issued bonds on April 18, 2006. The bonds had a coupon rate of 5.5%, with interest paid semiannually. The face value of
ankoles [38]

Answer:

$857

Explanation:

Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.

According to given data

Face value of the bond is $1,000

Coupon payment = C = $1,000 x 5.5% = $55 annually = $27.5 semiannually

Number of periods = n = (April 18, 2036 - April 18, 2020) years x 2 = 16 x 2 period = 32 periods

Market Rate = 7% annually = 3.5% semiannually

Price of the bond is calculated by following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond = 27.5 x [ ( 1 - ( 1 + 3.5% )^-32 ) / 3.5% ] + [ $1,000 / ( 1 + 3.5% )^32 ]

Price of the Bond = $524.29 + $332.59 = $856.98 = $857

8 0
3 years ago
(1.1: Modeling) Before paying employee bonuses and state and federal taxes, a company earns profits of $103,000. The company pay
yan [13]

Answer:

Amount paid in;

Bonuses to employees = $5,150

State tax = $5,150

Federal tax = $41,200

Explanation:

The bonus paid to employees, federal tax and state tax are all a percentage of the profit made by the company.

The amount of each of these elements may be computed by applying the applicable percentage on the profit made by the company before any of these deductions.

amounts paid in;

bonuses =  5% * $103,000

= $5,150

state tax  =  5% * $103,000

= $5,150

and

federal tax =  40% * $103,000

= $41,200

8 0
3 years ago
Scale is not as important as style when decorating a room<br><br> A. True<br> B. False
Paul [167]

Answer:

b

Explanation:

once a style is chosen all pieces should be in the designated style

6 0
3 years ago
An array of firm resources includes interpersonal relations among managers in the firm, its culture, and its reputation with its
ZanzabumX [31]

Answer: social complexity

Explanation:

Social complexity simply relates to how the existence of human beings are being studied. The things that are studied include armed conflicts, marriage practices, emigration patterns, political movements, natural disasters, etc.

Therefore, array of firm resources includes interpersonal relations among managers in the firm, its culture, and its reputation with its customers and suppliers. Such competitive advantages are based upon social complexity.

6 0
3 years ago
A work team can be empowered by keeping roles independent and separate from one another. authorizing the team to make decisions
Olenka [21]

Answer:

Authorizing the team to make decisions traditionally made by managers.

Explanation:

That gives them a sense of leadership and knowing that certain ideas and contributions they make will eventually be valid. It fuels their energy to do more and that helps the company grow which is what the management looks out for.

8 0
3 years ago
Other questions:
  • After tyrese and ryan move in together, ryan finds himself disappointed. he thought they'd spend all their time together, but ty
    11·1 answer
  • 3) Frito-Lay's gathers daily sales data and sorts it by product line and by region. The marketingmanagers use the data to evalua
    10·1 answer
  • The _____ method uses independent and dependent variables to reveal cause-and-effect relationships.a) descriptiveb) correlationa
    13·1 answer
  • Following the formation of a corporation, which of the following terms best describes the process by which the promoter is relea
    15·1 answer
  • $600,000 of 7% bonds due in 10 years. The bonds pay interest each July 1 and January 1. Assume an effective interest rate of 8%.
    12·1 answer
  • Informal groups: Group of answer choices exist primarily for the benefit of their members. perform routine organizational goals.
    11·1 answer
  • EXPLAIN WHY ARE CRYPTOCURRENCIES RELIABLE.
    11·2 answers
  • How long will it take money to double if compounded continuously
    10·1 answer
  • When using the process of shared decision-making, what strategy should families be sure to include? A. criticism of others’ idea
    12·2 answers
  • Question 1<br> What is the most important question you should have after seeing this ad about a check cashing business?<br> Why
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!