According to the Keynesian school of thoughts, the key factors that determine equilibrium output is aggregate demand. With the crashing of the housing market, there is a deep decline in household wealth because a significant fraction of household wealth is in the form of housing. Reduced wealth leads to reduced consumption, which lowers aggregate expenditure.
<h3>What is meant by household wealth?</h3>
Household wealth is the difference between the value of a household's assets and the value of its liabilities and is one of the key determinants of private consumption.
To learn more about Household wealth, refer
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Complete Question is,
a. A decline in household wealth leading to a decrease in consumption expenditure.
b. Expected future incomes increasing and an increase in home purchases.
c. Declining tax revenues with cause a decrease in government spending.
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Answer:
$10.82
Explanation:
The computation of one share of stock is shown below:-
Expected dividend = Annual dividend × (1 + Growth rate)
= $1.42 × (1 + 1.3%)
= $1.42 × 1.013
= $1.44
Stock value = Expected dividend ÷ (Required return - Growth rate)
= $1.44 ÷ (14.6% - 1.3%)
= $1.44 ÷ 13.30%
= $10.82
Therefore for computing the stock value we simply applied the above formula.
D.) Marginal cost is equal to average total cost. (Because when the average total cost is at its minimum, marginal cost is also at its minimum.)
Answer: The answer is given below
Explanation:
It should be noted that the split limits approach is used by several auto insurance policies and this simply combines per person and occurrence approach.
For every accident, three dollars amount are being applied. The first limit is simply a per person limit which is the maximum amount that one injured person will get. The second limit is simply the per occurrence limit which is the maximum amount that all the injured persons will get while the third limit applies during the claim of property damage as it is the maximum amount that will be paid for damages by an insurer to property that results from the accident.
since the split is 50/100/20, it implies that $50,000 medical coverage for every injured person, $100,000 injury coverage for all accident victims and then $20,000 for property damage.
1. Bill's insurance company will pay $20000.
2. Amount Bill will pay:
= $17,603 + $3,136 + $9,659 - $20,000
= $30,398 - $20,000
= $10,398
