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Suppose the government increases taxes by $11110 billion and the marginal propensity to consume is 0.990. By how will equilibri

Helen [10]

Answer:

- $1,099,890 billion.

Explanation:

Marginal propensity to consume (MPC) = 0.990

Tax multiplier = - MPC ÷ (1 - MPC)

= - 0.990 ÷ (1 - 0.990)

= - 9 9

change in GDP = Change in taxes × Tax multiplier

= $11110 × (-99)

= - $1,099,890

the minus sign shows a decrease

Hence, the change in equilibrium GDP is - $1,099,890 billion.

5 0

3 years ago

Blossom Corporation, a manufacturer of ethnic foods, contracted in 2020 to purchase 470 pounds of a spice mixture at $2.35 per p

Sveta_85 [38]

Answer:

No gain or loss.

Explanation:

Given:

Amount of spice mixture = 470 pound

Current price = $2.35 per pound

Future price = $2.73 per pound

Computation:

We know that, Future price of spice mixture is higher than current price of spices.

But contract price is fixed at $2.35.

Therefore, no gain or loss will be recognized.

7 0

3 years ago

Read 2 more answers

Business combinations historically have been accounted for as either purchases or poolings of interests. Now, with SFAS 141(R),

lora16 [44]

Answer:

Explanation:

FASB amended the rules to improve the comparability of the information about business combinations provided in financial reports. A variable interest entity is a legal business.

The Financial Accounting Standards Board issued SFAS 141(R) in 2007 December, to substitute the SFAS 141. Evaluating the comment letters, articles and industry publications, they analyzed issues that were with SFAS 141 from the perspective of professionals, users and the FASB; it was evaluated 141(R) to ascertain these weaknesses and they were corrected with solutions been profound in 141(R).

8 0

3 years ago

Monetary Policy in Flosserland: In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has ha

evablogger [386]

Answer:

The correct answer is d) neither the long-run Phillips curve nor the Classical dichotomy.

Explanation:

The answer that best suits the situation described is the Phillips curve in the short term but not in the long term.

The Phillips curve starts from the principle that the amount of money circulating (commonly called "money supply") has real effects on the economy in the short term. In this way, an increase in the money supply would have a beneficial effect on aggregate demand, as citizens will spend more when their nominal wages are increased (known as “monetary illusion”) and a more favorable framework for investment and investment will be created. that the prospects of rising prices will improve the expectations of corporate profits. The improvement in aggregate demand would result in greater economic growth, and this in turn in the creation of new jobs. This is how an inverse relationship between inflation and unemployment is established, expressed graphically by a downward curve.

3 0

3 years ago

Alexis Company was started in Year 1. At the end of Year 1 the Company had the following accounting equation.Assets = Liabilitie

swat32

Answer:

Company's assets at the end of Year 2 were provided by creditors = 20%

Explanation:

Calculation of Cash at the end of Year 2

Cash balance at the end of Year 1 $600

Less: Paid off to notes payable ($500)

Add: Earned cash revenue $700

Less: Paid cash expenses ($400)

Less: Paid cash dividend ($100)

Cash balance at the end of Year 2 $300

Notes payable at the end of Year 2 = Beginning balance - Paid off

= $1,000 - $500

= $500

Calculation of Notes Payable at the end of Year 2

Notes Payable at the end of Year 1 $1000

Less: Paid off to notes payable ($500)

Notes Payable at the end of Year 2 $500

Total assets at the end of Year 2 = Cash + Land

= $300+2200

= $2500

Creditors at the end of the Year 2 (Notes payable) = $500

Company's assets at the end of Year 2 were provided by creditors = Creditors * 100 / Total assets

= $500 * 100 / $2500

= 20%

5 0

3 years ago