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Brums [2.3K]
3 years ago
13

Suppose the multiplier is 5 and the government increases its purchases by $15 billion. Also, suppose the AD curve would shift fr

om AD1 to AD2 if there were no crowding out; the AD curve actually shifts from AD1 to AD3 with crowding out. Also, suppose the horizontal distance between the curves AD1 and AD3 is $55 billion. The extent of crowding out, for any particular level of the price level, is:______
A) 20 billion
B) 30 billion
C) 10 billion
D) 40 billion
Business
1 answer:
german3 years ago
3 0

Answer:

A) 20 billion

Explanation:

Y = AD

   = C + I + G  

C = A + cY

A - Autonomous Consumption

c - MPC

Y = A + cY + I + G

Y - cY = A + I + G

Y(1 - c) = A + I + G  

Y = (A + I + G)*1/(1 - c)

Taking derivative with respect to goverement purchase  

dY/dG = 1/(1 - c)  

( here d is represting del we are representing partial derivative.)

1/(1 - c) = Multiplier

dY = Multiplier*dG  

     = 5*15  

     = 75

75 = horizontal distance between AD1 & AD2

55 = horizontal distance between AD1 & AD3  

Extent of crowding out = 75 - 55 = 20

Therefore, the Extent of crowding out is 20 billion.

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When planning a procurement, it is useful to ______________.
Gre4nikov [31]

Answer & Explanation: When planning a procurement, it is useful to at least conduct a make or buy analysis which aids in determining the most cost effective approach, to consult and liaise with in-house experts in the departments of procurement, human resource, and legal, and also to insure the sponsor of the project signs off on the procurement plan. The goal of procurement planning is to increase the transparency and predictability of the procurement process while also deciding on what to buy, when and from what source.

5 0
3 years ago
32,500 shares of common stock outstanding at a price per share of $80 and a rate of return of 12.95 percent. The firm has 7,350
pashok25 [27]

Answer:

WACC = 11.1%

Explanation:

The weighted Average cost of Capital is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion each source of finance bears to the total capital in the pool.

<em>Market of securities</em>

Common stock =  $80 × 32,500=  2,600,000.  

Preferred stock = $95.50 ×  7,350=   701,925.00  

Bond = 407,000/100 × 111.5= 453,805.00  

<em>Cost of each capital type</em>

Common stock= 12.95

Preferred stock = (7.90%× 100)/95.50= 8.3%

Bond= 8.11%× (1-0.4)=4.87%

<em>WACC</em>

Type                      Market Value          Cost           Market value  cost

Common stock   2,600,000.              12.95%         336,700.00  

Preferred            701,925.00              8.3%             58,065.00  

Bond                   4<u>53,805.00  </u>           4.87%            <u>22,100.30 </u>

Total                    <u>3,755,730.00</u>                               <u>  416,865.30</u>  

WACC = (416,865.30  / 3,755,730.00) ×  100

       = 11.1%

WACC = 11.1%

4 0
3 years ago
The following items are taken from the financial statements of Cullumber Company for 2022:
Doss [256]

Answer:

                                          Cullumber Company

                                          Balance Sheet

                                          As at 2022

Explanation:                      Amount in $

Current Assets

Accounts Receivable           12,500

Cash                                      13,000

Prepaid Insurance                  6,600

Supplies                                  4,600

Total Current Assets            36,700

Non-Current Assets

Equipment (225,000-36,900)  188,100

Total Assets                            <u>  </u><u>224,800</u>

Liabilities & Shareholders' Equity

Current Liabilities

Accounts Payable                10,600

Notes Payable                      65,000

Salaries Payable                      3,900

Total Current Liabilities           79,500

Equity

Common Stocks                      97,000

Retained Earnings (25,900+133,000-21,400-13,600-2,600-16,800-33,500-6,700)                                          64,300  

Dividends                                   (16,000)

 Total Equity                              145,300

Total Liabilities & shareholders' equity    <u>224,800</u>  

4 0
4 years ago
The primary purpose of __________ is to preserve memories of persons or events.
kupik [55]
<span>monuments is the right answer </span>
3 0
3 years ago
The kenosha company has three product lines of beer mugslong dash​a, ​b, and clong dashwith contribution margins of $ 5​, $ 4​,
Tema [17]

Answer:

break even point in units:

  • a = 11,700
  • b = 46,800
  • c = 35,100

Explanation:

beer mugs          contribution margin         expected sales

a                                $5                                   25,000

b                                $4                                  100,000

c                                $3                                   50,000

fixed costs = $351,000

if the sales proportion remains the same, we can assume a bundle of products = 1a + 4b + 3c (1 for every 25,000 units) whose contribution margin = $5 + $16 + $9 = $30

break even point = fixed costs / bundle's contribution margin = $351,000 / $30 = 11,700 bundles

break even point in units:

a = 11,700

b = 11,700 x 4 = 46,800

c = 11,700 x 3 = 35,100

3 0
3 years ago
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