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Mekhanik [1.2K]
3 years ago
15

If the MPC is 0.75 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $100 bi

llion will eventually shift the aggregate demand curve to the right by a. $125 billion. b. $80 billion. c. $400 billion. d. $500 billion.
Business
1 answer:
umka21 [38]3 years ago
5 0

Answer:

c. $400 billion

Explanation:

Calculation to determine what an initial increase in aggregate demand of $100 billion will eventually shift the aggregate demand curve to the right

First step is to calculate the GDP Multiplier

Using this formula

GDP Multiplier=1/(1-MPC)

Let plug in the formula

GDP Multiplier=1/1-0.75

GDP Multiplier=1/0.25

GDP Multiplier=4

Now let determine the shift in aggregate demand curve

Shift in aggregate demand curve=4*100 billion

Shift in aggregate demand curve= $400 billion

Therefore an initial increase in aggregate demand of $100 billion will eventually shift the aggregate demand curve to the right by $400 billion

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d. The maintenance costs associated with the napkin folding machine.

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The cost that required one or more processors to produced a final product is known as joint cost

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Answer:

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Explanation:

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economic result = revenue - total cost

<u>Where:</u>

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400 + 600 = 1,000

revenue = units x selling price per unit

100 units x $3 = $300

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The company is on the optimal level, marginal revenue = marginal cost at 100 units of output.

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5 0
3 years ago
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Brett's outside tax basis in his LLC interest = Cash contribution + basis of building - debt of building + Non recourse loan + non recourse mortgage + remaining mortgage on building

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