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True [87]
3 years ago
14

When the government subsidizes investment, such as with an investment tax credit, the subsidy often applies to only some types o

f investment. This question asks you to consider the effect of such a change. Suppose there are two types of investment in the economy: business investment and residential investment. The interest rate adjusts to equilibrate national saving and total investment, which is the sum of business investment and residential investment. Now suppose that the government institutes an investment tax credit only for business investment. a. How does this policy affect the demand curve for business investment
Business
1 answer:
irga5000 [103]3 years ago
8 0

Answer:

The demand curve for business investment will shift upwards to the right, signaling an increased demand for business investment.

Investors will be attracted to invest more in business investment than they will invest in residential apartments.  This is how it has worked.

Explanation:

An economy's business investment includes the investments in the machines, tools, and equipment that business entities need for the production of goods and services.  On the other hand, its residential investment refers to the expenditure made for constructing or buying new houses or dwelling apartments for the purpose of living or renting out to others. If the government grants some tax credit to business investment, it will make business more attractive to the investing public.

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Suppose you invest in 100 shares of Harley- Davidson (HOG) at $40 per share and 230 shares of Yahoo(YHOO) at $25 per share. If t
masha68 [24]

Answer:

option (D) - 1.54%

Explanation:

Number of share of Harley- Davidson (HOG) = 100

Number of share of Yahoo(YHOO) = 230

Purchase price of share of Harley- Davidson (HOG)  = $40 per share

Purchase price of of share of Yahoo(YHOO)  = $25 per share

Final price of the share  of Harley- Davidson (HOG) = $50

Increase in price of the share  of Harley- Davidson (HOG) = $50 - $40 = $10

Final price of the share  of Yahoo(YHOO) = $20

Increase in price of the share  of Yahoo(YHOO) = $20 - $25 = - $5

here, negative sign means the loss

Now,

Total amount invested = 100 × $40 + 230 × $25

= 4,000 + 5,750

= $9,750

also,

Total net gain from shares = $10 × 100 - $5 × 230

= 1,000 - 1,150

= -150

return on your portfolio = \frac{\textup{Net gain }}{\textup{Amount invested}}\times100\%

= \frac{\textup{-150}}{\textup{9,750}}\times100\%

= - 1.538% ≈ - 1.54%

option (D) - 1.54%

4 0
4 years ago
Baldwin's product manager is considering lowering the price of the buzz product by $2.50 and wants to know what the impact will
Liono4ka [1.6K]
<span>Buzz's contribution margin will be 34% if the price is lowered.
</span>
Old Price - 2.5 = 32.5
32.5-(14.36MC+7.09LC) = 11.05 
11.05/32.5 =.34
.34 = 34%
3 0
4 years ago
At Nice Price for the Ice, an ice cream parlor, customers routinely buy a scoop of ice cream for $2.75. If consumers purchase on
Alla [95]

Answer:

Consumers would not keep buying ice cream at $2.75 because after purchasing a certain amount of ice cream, utility would be maximised and consumers would not value ice cream at $2.75 anymore. Consumers would not purchase a product it the marginal utility that would be derived from consuming the product is less than the price.

According to the law of diminishing marginal utility, as more units of a product is increased, total utility increases but at a decreasing rate.

Explanation:

Marginal utitiy is the increase in utility that is derived from consuming one more unit of a product.

7 0
3 years ago
Colgate-Palmolive Company reports the following balances in its retained earnings. ($ millions) 2010 2009 Retained earnings $14,
ahrayia [7]

Answer:  $1,031 million

Explanation:

Given that,

Retained earnings(2010) = $14,329 million

Retained earnings(2009) = $13,157 million

Net income(2010) = $2,203 million

Amount of dividends = Retained earnings(2009) + Net income(2010) - Retained earnings(2010)

                                   = $13,157 million + $2,203 million - $14,329 million

                                   = $1,031 million

Therefore, amount of dividends did Colgate-Palmolive pay to its shareholders in 2010 is $1,031 million.

3 0
3 years ago
Read 2 more answers
A town's garbage trucks accidentally sideswiped two parked automobiles in the fiscal year ended December 31, 2019. One case was
asambeis [7]

Answer:

The answer is "$13,000".

Explanation:

In the given question, From December 31, 2019, the sum should also be $13,000 as just a liability for both the general fund. Its first village owner is $3000 as well as the second villager is $10,000, because their contingent liability is registered to a fair degree, that's why its correct answer is "$13,000".

7 0
4 years ago
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