<span>This is a tricky question, because
most of the answers provided are correct. For instance, by raising taxes, the
government drops down the demand rates, as well as by decreasing the money
supply (in that case, it also prevents economy from falling into an inflating
situation). As for balancing the budget, this economical move entails
decreasing the public expenditure and, therefore, contracting the demanding economical
figures too. </span>
Answer:
A bank run occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank's solvency. As more people withdraw their funds, the probability of default increases, prompting more people to withdraw their deposits.
Explanation:
The dollar will appreciate against the euro because USD is selling at a premium in EURO to USD market.
Answer:
Left by $400; Left by $300
Explanation:
Given that,
Marginal propensity to consume, MPC = 0.75
Government spending multiplier = 4
(a) If the government decreases its purchases by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in government spending to the government spending multiplier.
Aggregate demand curve shift left by
= Change in government spending × Government spending multiplier
= $100 × 4
= $400 million
(b) If the government increases income taxes by $100 million, then the magnitude of the shift in aggregate demand curve is calculated by multiplying the change in taxes to the tax multiplier.
Tax multiplier:
= MPC ÷ (1 - MPC)
= 0.75 ÷ (1 - 0.75)
= 0.75 ÷ 0.25
= 3
Aggregate demand curve shift left by
= Change in taxes × Tax multiplier
= $100 × 3
= $300 million
Answer and Explanation:
The computation is shown below:
But before that we need to do the following calculations which are shown below:
The Contribution per unit of faucet is
= $75 - $15
= $60
And, the Contribution per unit of pitcher filter is
= $100 - $30
= $70
Now Contribution per unit in present sales mix is
= [($60 × 2) + ($70 × 3)] ÷ 5
= ($120 + $210) ÷ 5
= $66 per unit
And
The Fixed cost is
= $1,000,000 + $200,000
= $1,200,000
Now
Break even units is
= $1,200,000 ÷ $66 per unit
= 18,181.81 units
For faucet, it is
= (18,181.81 × 2) ÷ 5
= 7,272.72 units
For pitcher filter, it is
= (18,181.81 × 3) ÷ 5
= 10,909.086 units
