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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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To maximize the profit the firm should produce fewer widgets because, as the number of widget production increases the marginal cost of producing widgets increases.

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How do you spot native advertising?
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You can't tell the difference between a legit article and an ad

Explanation:

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3 years ago
Most of the property in command economies is owned by who​
ozzi

Answer:

In a command economy an authority such as the government, governmental agency, or central planners decide what to produce, how to produce and to whom goods and services will be allocated.

4 0
3 years ago
ames Sprater of Grand Junction, Colorado, has been shopping for a loan to buy a used car. He wants to borrow $18,000 for four or
Ghella [55]

Answer:

James' credit union loan rate is 8.88% APR, the local bank loan rate is 9.34% APR.

Explanation:

Hi, since in both cases payments would be done in a monthly basis, we have to assume that the rate that we are looking for is APR (compounded monthly), and since there is no additional information in regards that 9.25% rate, we can assume that this is effective annually, so let´s convert this effective monthly rate into APR (compounded monthly)

First, we have to convert it into an effective monthly rate, that is:

r(month)=((1+r(annual))^{\frac{1}{12} } -1)

r(month)=((1+0.0925)^{\frac{1}{12} } -1)=0.00739963

Then we multiply by 12 and we get  0,088796 , which is 8.88% APR (compounded monthly)

This way James can compare both credits. The cheaper loan is from the credit union.

4 0
3 years ago
ABC Residential Investors, LLP, is considering the purchase of a 120-unit apartment complex in Steel City, Pennsylvania. A marke
hoa [83]

Answer:

The estimate value of the subject property is $8,269,200

The other information that would be desirable in reaching a conclusion:

The closeness of the property to central business districts as the closer it is the higher the asking price.

The estimate was solely based on revenue, the applicable costs have been ignored.

The average taken might not be a good indication for the subject property because the property might have unique features

Explanation:

The formula for Gross Rent Multiplier is given  Property Price / Gross Monthly Rental Income.

In determining the estimate value of the subject property ,we calculate the gross rent multiplier of the new property,then multiply it  with the annual rental income.

In ascertaining the GRM of the new property we take the average GRM of the two similar properties in the same area.This is because the new property judging from number of units, lies in-between the other two properties.

GRM for Oaks

GRM=$9000000/($550*140)

GRM =116.88

GRM for Palms

GRM=$6,600,000/($650*90)

GRM =112.82

The average GRM=(116.88+112.82)/2

                               =114.85

Subject property price=114.85*(120*$600)

                                     =$8,269,200

4 0
3 years ago
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