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Elenna [48]
3 years ago
15

Suppose Deborah gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend

$480 and save the remaining $120.
1. From this, you can tell that Deborah marginal propensity to consume (MPC) is __________.
a. 0.48
b. 0.12
c. 0.20
d. 0.80
Business
1 answer:
Mashutka [201]3 years ago
7 0

Answer:

Option (d) is correct.

Explanation:

Suppose Deborah gets a sales bonus at her place of work,

Disposable Income, YD = $ 600

Consumption, C = $480

Savings , S = $ 120

Marginal propensity to consumer, MPC:

= Consumption ÷ Disposable Income

= 480 ÷ 600

= 0.8

Therefore, Deborah marginal propensity to consume (MPC) is 0.80

Option (d)

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Geraths Windows manufactures and sells custom storm windows for three-season porches. Geraths also provides installation service
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Answer:

July 1

No Entry

Sep 1

Dr Cash $2,000

Dr Accounts Receivable $400

Dr Cost of goods sold $1,100

Cr Inventory $1,100

Cr Unearned Service Revenue $554

Cr Sales Revenue $1,846

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Dr Unearned Service Revenue $554

Cr Service Revenue $554

Cr Accounts Receivable $400

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Preparation of the journal entries for Geraths in 2020.

July 1

No Entry

Sep 1

Dr Cash $2,000

Dr Accounts Receivable $400

($2400-$2000)

Dr Cost of goods sold $1,100

Cr Inventory $1,100

Cr Unearned Service Revenue $554

($600/$600+$2000*$2400)

Cr Sales Revenue $1,846

($2,000/$600+$2000*$2400)

Oct 15

Dr Cash $400

($2400-$2000)

Dr Unearned Service Revenue $554

Cr Service Revenue $554

($600/$600+$2000*$2400)

Cr Accounts Receivable $400

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