1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
How is granite made i will give brainliest if right ?
IRINA_888 [86]

Answer:

Granite is a light-shaded molten stone with grains adequately huge to be obvious with the independent eye. It structures from the moderate crystallization of magma beneath Earth's surface. Stone is made basically out of quartz and feldspar with minor measures of mica, amphiboles, and different minerals. Granite slabs are gotten from unique locales that are known as quarries. Utilizing incredible machines, a mining organization mines and shoots crude rock out of the quarry. Processing Machines Cut the Slabs. After rock has first been mined out of the earth, it will be in an exceptionally harsh structure.

Explanation:

3 0
3 years ago
The wage rate is $10 per hour and the last worker hired by the firm increased output by 100 units. Computers rent for $100 per h
const2013 [10]

Answer:

To minimise cost, the firm should lay off worker and rent more computer as it give more output per dollar invested on it.  This reduce the fixed cost of the company drastically and increase the production of the company.  The marginal cost of production and marginal revenue are economic parameter, which help to determine the amount of output and price per unit of input that will maximise the profits. The point at which marginal revenue is equal to marginal cost maximise the profit.

5 0
3 years ago
Assume again that the cost of capital is 7 percent and the effective tax rate is 40 percent. How would the payback, internal rat
vfiekz [6]

Answer:

If the effective tax rate increases then the net savings coming from investments will get lowered as a result the investment will have higher payback period (The increase in effective tax rate would lower demand of the product which means there is decline in net saving arising from the sale of the product). Likewise this decrease in annual net savings will also decrease the internal rate of return which shows that their are increased chances of project rejections. The NPV method is based on cash flows and relevant costing just like IRR and payback method but the only difference is that it assumes that the cash earned would be reinvested at cost of capital. The NPV will also decrease due to increased effective tax rate.

4 0
3 years ago
A fee collected by a real estate agent upon the sale of a property is
vladimir2022 [97]
Real estate commission fee
3 0
3 years ago
May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000.
zubka84 [21]

Answer:

Date       General Ledger                                        Debit        Credit

May 24   Accounts Receivable-Old Town Café   $18,450

                      Sales                                                                   $18,450

              Cost of goods sold                                 $11,000

                       Inventory                                                            $11,000

Sept. 30  Cash                                                         $6,000

                      Allowance for Doubtful Accounts                      $12,450

                      Accounts Receivable-Old Town Cafe               $18,450

Dec. 7    Accounts Receivable-Old Town Cafe      $12,450

                      Allowance for Doubtful Accounts                     $12,450

              Cash                                                             $12,450

                       Accounts Receivable-Old Town Cafe               $12,450

7 0
3 years ago
Other questions:
  • When a company lends cash to a customer who signs a promissory note: total assets decrease when the lending transaction occurs,
    11·1 answer
  • You have been given the following information for Corky’s Bedding Corp.: Net sales = $12,250,000. Cost of goods sold = $8,900,00
    7·1 answer
  • What a primary cause of inflation​
    5·1 answer
  • Imagine that you are a member of the band and you want to purchase some items from a music supply store. Use what you've learned
    6·2 answers
  • Sarah's Smart Shop has an inventory turnover ratio of 3 times per year and an average inventory of $156,000. If Sarah could mana
    5·1 answer
  • Suppose, due to the effects of a military conflict that has ended, that a country experiences a large reduction in its capital s
    10·1 answer
  • A(n) ______ is a network that links the intranets of business partners via the Internet in such a way that the result is a virtu
    7·1 answer
  • CompuTop Company sells toy laptop computers for $30 each. If the variable cost for each laptop is $20 and fixed costs total $25,
    8·1 answer
  • Carmel Corporation is considering the purchase of a machine costing $52,000 with a 4-year useful life and no salvage value. Carm
    5·1 answer
  • First, look up a treaty via the Internet or a book, cite your source, and answer the following questions in a report of at least
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!