Answer:
The correct answer is option C.
Explanation:
A reduction in spending is going to reduce the income of the consumers in the economy. The consumers do not spend all their income but save it partially. The saving is used to create funds which are invested again and lead to increase in output. The rate of consumption depends on the marginal propensity to consume and marginal propensity to save. The marginal propensity to save is 1-MPC. Smaller MPS will cause saving to be less, consequently investment will also be lower.
So, a reduction in the government spending will be more effective in curbing demand-pull inflation if the marginal propensity to consume is higher and marginal propensity to save is smaller.
Answer:
D. 8.000 Bedford Lamps and 2.500 Lowell Lamps
Explanation:
The computation of the optimum operating income is shown below:
Particulars Bedford Lamp Lowell Lamp
Sales price $30 $35
Less: Variable costs $18 $ 23
Contribution $12 $12
Machine hours 2 4
Contribution per machine hour 6 3
(Bedford = 12 ÷ 2, Lowell = 12 ÷ 4)
As we can see that the contribution margin per hour of Bedford Lamp is more than that of Lowell lamp so the production of Bedford Lamp should produced first and then Lowell Lamp.
And, required hours to make 8,000 units of bedford lamp is
= 8,000 × 2
= 16.000 hours
Now Balance Hours is
= 260,00 - 16,000
= 10,000 hours
Lowell lamp that can be made from 10000 hours is
= 10,000 ÷ 4
= 2,500 Lowel Lamps
Answer:
a decrease in equilibrium price and an increase in equilibrium quantity
He ledger contains a list of business transactions
Answer:
Quigley's WACC = 7.53%
Explanation:
The after-tax cost of debt = 0.07 * (1-tax rate)
The after-tax cost of debt = 0.07 * (1 -0.4)
The after-tax cost of debt = 0.07 * 0.6
The after-tax cost of debt = 0.042
The after-tax cost of debt = 4.2%
WACC = Respective costs*Respective weight
40% debt, 10% preferred, and 50% common equity
WACC = (4.2*0.4) + (0.1*6) + (0.5*10.5)
WACC = 1.68 + 0.6 + 5.25
WACC = 7.53%