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
Sergio039 [100]
2 years ago
15

(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, I

g, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars. Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:
Business
1 answer:
son4ous [18]2 years ago
4 0

Answer:

The correct option is c. raise G by $30 or reduce T by $40.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy. The letters Y, Ca, Ig, Xn, G, and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars.

Ca = 25 + 0.75(Y - T)

Ig = Ig0 = 50

Xn = Xn0 = 10

G = G0 = 70

T = T0 = 30

Refer to the information. If government desired to raise the equilibrium GDP to $650, it could:

a. raise G by $45 or reduce T by $10.

b. raise G by $40 and reduce T by $30.

c. raise G by $30 or reduce T by $40.

d. raise both and T by $40.

e. reduce G by $30 and increase T by $40.

The explanation of the answer is now provided as follows:

Equilibrium GDP (Y) can be obtained as follows:

Y = C + G + I + Xn …………………….. (1)

Substituting all the values in the question into equation (1) and solve for Y, we have:

Y = 25 + 0.75(Y - 30) + 70 + 50 + 10

Y = 0.75Y - 22.50 + 155

Y – 0.75Y = 132.50

0.25Y = 132.50

Y = 132.50 / 0.25

Y = 530

Therefore, we have:

Y = Current equilibrium GDP = $530

Amount of increase in equilibrium GDP required = Desired equilibrium GDP – Current equilibrium GDP = 650 - 530 = 120

From the question, we have:

Ca = 25 + 0.75(Y - T) ………………. (2)

The 0.75 in equation (2) is the marginal propensity to consume (MPC). Therefore, we have:

MPC = 0.75

Expenditure multiplier = 1 / (1 - 0.75) = 4

Tax multiplier = - MPC / (1 – MPC) = -0.75 / (1 – 0.75) = -3

Amount of increase in G or government expenditure required = Amount of increase in equilibrium GDP required / Expenditure multiplier = 120 / 4 = $30

Amount of tax cut or decrease in T required = Amount of increase in equilibrium GDP required / Tax multiplier = 120 / (-3) = -$40

Therefore, correct option is c. raise G by $30 or reduce T by $40.

You might be interested in
1. As an Organizational Psychologist, you have thought of arranging a picnic in two weeks' time for your employees from all depa
yuradex [85]

Hello. This question is incomplete. The full question is:

As an Organizational Psychologist, you have thought of arranging a picnic in two weeks' time for your employees from all departments and their families to unwind their work stress and give them a healthy mental break. There are many fun activities that you have planned. For the children, there will be games like three-legged races and kite-flying. For the adults, besides the baseball game in the afternoon, there will also be sack race and horseshoes. There will be prizes for the winners of all the events. Lunch should be around noon, and you are generously providing all the food and drinks, so let your employees know that they do not need to bring anything.

Your Task: Write a memo requesting, but not demanding, that employees attend the picnic. Also ask your employees to confirm at least one week in advance whether they are coming or not, and also how many guests they are bringing. Also, make sure employees know when and how to respond to you. Be sure to list the activities for that day as well.

Answer:

MEMORANDUM No. 0120

From: Department of Organizational Psychology

For: All employees and families

Subject: Invitation to the annual picnic for socializing.

November 25, 2020.

Dear employees,

We have the honor of inviting all employees and their families to participate in the annual picnic of fraternization that our company will hold on December 20 at 2 pm, at the Club Santa Anne. On the occasion we will offer recreational activities, games and relaxation sessions to promote a day of leisure for our employees. We also have activities for children and a delicious lunch and snack for everyone.

The piquimique will be offered completely free of charge and we hope to meet everyone, although the presence is not mandatory.

In order to avoid waste, we would like to ask you to confirm your presence and the number of guests you intend to bring. This information should be sent to the psychology department email and we ask that the information be sent by January 10th.

We count on your understanding.

Regards,

Maria Lopes.

Director of the psychology department.

7 0
2 years ago
Labor economists studying the determinants of women’s earnings discovered a puzzling empirical result. Using randomly selected e
Artist 52 [7]

Answer: Sample selection bias

Explanation: Sample selection is a term used to describe the various steps and processes through which a researcher was able to determine and collect his or her samples.

Bias is an inclination towards or a prejudice against one or more parties or factors in an experiment or a Research.

SAMPLE SELECTION BIAS IS ONE OF THE MAIN CAUSES OF POOR OR WRONG OUTCOMES DURING A RESEARCH OR AN EXPERIMENT.

3 0
3 years ago
Obama Company has identified that Bill Clinton’s receivable account of $100 is uncollectible. What is the journal entry needed t
DerKrebs [107]

Answer:

Allowance for Doubtful Accounts 100 Accounts Receivable 100

Explanation:

The allowance method first estimates an allowance for doubtful debts.When the company receives the actual figure of the amount that have gone wrong, it writes off the  trade receivable and utilizes the allowance provided for

<u>When allowance is estimated </u>

Bad Debts (debit)

Allowance for doubtful debts (credit)

<u>When the  actual figure of the amount that have gone wrong is obtained</u>

Allowance for doubtful debts (debit)

Account Receivable (credit)

4 0
2 years ago
What are some business plan questions
inysia [295]

What business are you in? The question sounds easy enough. ...

How will the business make money? ...

What does your business need to get off the ground? ...

What is the operating budget? ...

Who are your customers? ...

How will you reach your customers? ...

What sets you apart from the competition? ...

What are your strengths and weaknesses?

What business are we in? ...

What is the vision and mission of the company? ...

Who is our customer? ...

What does our customer value? ...

What is our target market? ...

What products and services do we provide? ...

What is our sales and marketing strategy?

3 0
2 years ago
A bank owns a 10-story office building. In the bank's balance sheet, this would be listed as part of?
ziro4ka [17]

A 10-story office building is owned by a bank. This would be an example of a chequable deposit on the bank's balance sheet.

An organization's assets, liabilities, and shareholder equity are listed on a balance sheet, which is a financial statement. One of the three primary financial statements used to assess a company is the balance sheet. It offers a snapshot of the assets and liabilities of a corporation as of the publication date.

A balance sheet is a summary of the financial positions of a person or an organization in financial accounting, regardless of whether they are a sole proprietorship, a business partnership, a corporation, a private limited company, or some other type of entity like a government or not-for-profit entity.

Learn more about balance sheet here

brainly.com/question/1113933

#SPJ4

5 0
1 year ago
Other questions:
  • Rodgers Inc. is imports paper from Shanghai China. In a typical transaction Rodgers receives a delivery of paper from the Chines
    10·1 answer
  • Harrison Co. issued 13-year bonds one year ago at a coupon rate of 8 percent. The bonds make semiannual payments. If the YTM on
    8·1 answer
  • A fundamental difference between regular marketing and global marketing is
    14·1 answer
  • Long-run economic growth in the United States is best measured using A. nominal GDP per​ capita, which has been trending strongl
    14·1 answer
  • There are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generat
    11·1 answer
  • If the percentage change in the quantity demanded of a good is greater than the percentage change in the price of the good, then
    6·2 answers
  • A distribution of scores that is positively skewed will have a small number of scores that:
    14·1 answer
  • During the norming stage of team development, team members: a. are likely to disagree about what the group should do. b. meet ea
    10·1 answer
  • ____ describes the degree of interdependence among modules.
    7·1 answer
  • Production Budget and Direct Materials Purchases Budget
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!