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nadya68 [22]
3 years ago
9

Suppose that a certain country has an MPC of 0.8 and a real GDP of $400 billion. If its investment spending decreases by $5 bill

ion, what will be its new level of real GDP
Business
1 answer:
Lera25 [3.4K]3 years ago
3 0

Answer: $375 billion.

Explanation:

Using the MPC, one can calculate a multiplier that shows how much GDP changes when there is a change in investment.

Multiplier = 1 / ( 1 - MPC)

= 1 / (1 - 0.8)

= 1 / (0.2)

= 5

Change in GDP = change in investment spending * multiplier

= -5 billion * 5

= -$25 billion

New level of GDP = 400 - 25

= $375 billion.

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The labor force that can be depicted from the information about the people will be 36.

<h3>How to calculate the labor force</h3>

The labor force will be:

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= 3/36 × 100

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Margarita [4]

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C. <u>not valid because performance depends on Parsley's personal skills</u>

Explanation:

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For a contract to be termed as valid, it must be performed by the parties to it.

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The transfer will not be valid since the performance i.e service to be provided by Parsley are of personal nature and the consideration is based upon that. No two individuals can provide exact services.

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<u>Weaknesses</u>

You are dependent upon a few artists to keep you in stock.

<u>Opportunities</u>

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