Nae Nae Killua (( lol idek just bored ))

Consider three closed economies. In the first economy, households spend $0.50 of each additional dollar they earn and save the r

aleksklad [387]

Answer:

b. In the first economy, the spending multiplier is greater than in the second economy. In the third economy, the spending multiplier is undefined

Explanation:

This can be easily understood by going through some calculations in a spending multiplier formula.

WORKINGS

The formula for Spending Multiplier = $\frac{1}{MPS}$

Spending Multiplier

Economy 1: Multiplier = $\frac{1}{0.5}$ = 2

Economy 2: Multiplier = $\frac{1}{1}$ = 1

Economy 3: Multiplier = $\frac{1}{0}$ = undefined

Note: MPS can be abbreviated as Marginal propensity to save

As we can see here economy 1 is 50% greater than economy 2 and economy 3 is undefined because they spend whole dollar they earn additionally.

On behalf of the above calculations, option B is a perfect match!

4 0

3 years ago

In regard to firm growth, evidence shows that ________. service firms tend to generate sustained growth while manufacturing firm

JulijaS [17]

Answer:

At least during the last couple of decades, service firms tend to generate sustained growth while manufacturing firms do not.

Explanation:

The last president that recorded a steady manufacturing growth rate was Bill Clinton.

Service firms are growing steadily and probably will continue to do it. While manufacturing firms have been slowing down, their growth rate (if any) is not very large during the past few years and that tendency has increased with the new trade barriers imposed by our government during the last couple of years.

Another thing that helps the growth of service firms is that when manufacturing firms or agricultural firms grow, they need more services, so service firms will grow even more.

6 0

2 years ago

The vice-president of HR for Health Wizard, Inc. is designing a performance appraisal system that includes subordinate ratings o

Svetllana [295]

The vice-president of HR for Health Wizard, Inc. is designing a performance appraisal system that includes subordinate ratings of their supervisors.The supervisors are concerned about this and have raised all of the following objections EXCEPT (d) the concern that they will be rated on how nice they are to subordinates rather than their true supervisory performance

Explanation:

The rating of the sub-ordinates by their supervisors can not be considered as a perfect way for performance appraisal because it will be over-focused on the behavior of the sub-ordinate with their supervisors rather than the on the job performance.

The sub-ordinates who follow all the commands of their supervisors will be rated high rather than those who perform well on the task given to them

So the answer to the above question is (d) the concern that they will be rated on how nice they are to subordinates rather than their true supervisory performance

8 0

3 years ago

The permanent files included as part of audit documentation do not normally include

viva [34]

The answer is a copy of the current and prior year’s audit programs

I hope that helped

4 0

3 years ago

Trendsetters has a cost of equity of 14.6 percent. the market risk premium is 8.4 percent and the risk-free rate is 3.9 percent.

BabaBlast [244]

Given:
cost of equity of 14.6 percent
market risk premium is 8.4 percent
risk-free rate is 3.9 percent
increase company's beta to 1.4 after purchase.

We will use the CAPM or Capital Asset Pricing Model formula to solve the new cost of equity.

Re = rf + (rm – rf) * β

Where:

Re = the required rate of return on equity
rf = the risk free rate
rm – rf = the market risk premium
β = beta coefficient = unsystematic risk

We need to solve for the original beta coefficient using the given cost of equity, market risk premium and risk free rate.

Re = rf + (rm – rf) * β
14.6% = 3.9% + 8.4% * β
14.6% - 3.9% = 8.4% * β
10.7% / 8.4% = β
1.27 = β

The initial beta coefficient is 1.27.

Using the same risk free rate, market risk premium, and a new beta coefficient of 1.4, we need to solve the cost of equity.

Re = 3.9% + 8.4% * 1.4
Re = 3.9% + 11.76%
Re = 15.66%

The new cost of equity after purchasing a company is 15.66%. It increase from 14.6% by 1.06%.

4 0

2 years ago