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garri49 [273]
3 years ago
11

Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respect

ively. Next, assume that disposable income increases by $20 billion, consumption rises by $15 billion, and saving goes up by $5 billion.a. What is the economy’s MPC?What is its MPS?b. What was the APC before the increase in disposable income?What was the APC after the increase?
Business
1 answer:
nalin [4]3 years ago
6 0

Answer:

The computation is shown below:

Explanation:

The computation is shown below:

As we know that

a) Marginal Propensity to Consume (MPC) = Change in consumption ÷ change in disposable income

MPC = $15 billlion ÷ $20 billion

MPC = 0.75

And,

Marginal Propensity to Save (MPS) = change in saving ÷change in disposable income

MPS = $5 billion ÷ $20 billion

MPS = 0.25

Now

b) Before the increase in disposable income

The average propensity to consume (APC) is

= Consumption ÷ disposable income

= $150 billion ÷$200 billion

= 0.75

And,

After the increase in the disposable income

New disposable income = $200 billion + $20 billion

= $220 billion

And,

New consumption = $150 billion + $15 billion

= $165 billion

So,

APC = New consumption ÷ new disposable income

= $165 billion ÷ $220 billion

= 0.75          

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3 years ago
Which term can be defined as the net income that a firm reinvests in itself?
KengaRu [80]

Answer:

retention ratio

Explanation:

Retention ration is the portion of net income retained by a firm to grow its business rather than being declared and paid as dividened.

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2 years ago
Peggy offers to sell Shelby a purebred Scottish terrier puppy for $800. Shelby and Peggy do not discuss the dog's ancestry, but
ladessa [460]

Answer:

a. No, because Shelby made a mistake about the dog's value, not a mistake about a material fact.

Explanation:

Peggy made an offer to sell the dog for $800, they didn't discuss the dog's ancestry and Shelby wrongly assumed the dog was from champion lines and agreed to buy the dog for $800.

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2 years ago
Suppose that the demand and price for a wrist watch are related by the following equation:
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Answer:

a. $28

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Explanation:

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= 800 watches

4 0
3 years ago
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