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kvasek [131]
3 years ago
12

The interest rate effect of a decrease in the aggregate price level will increase which of the following?

Business
1 answer:
Mama L [17]3 years ago
6 0

Answer:

Investment spending.

Explanation:

Rate of return can be defined as the percentage of interest or dividends earned on money that is invested.

In Financial accounting, a return refers to the amount of profit generated by an investor on an investment over a specific period of time.

Basically, the rate of return which is typically expressed as a percentage of the initial costs of an investment can either be a gain or a loss on an investment. Therefore, a positive rate of return on an investment over a specific period of time, simply means that an investor is making a profit (gains) while a negative rate of return on an investment over a specific period of time, indicates that the investor is running at a loss.

The interest rate effect of a decrease in the aggregate price level will increase investment spending.

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2. Fiscal policy Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $32 billion. Four e
Umnica [9.8K]

Answer:

For the Economist A the spending multiplier  is = 8, the tax multiplier = 4, the increase in spending is = $4 billion, the tax cut is = $8 billion.

For the Economist B, the spending multiplier is =4, the tax multiplier = 2, the increase in spending is = $8 billion, the tax cut is = $16 billion.

Explanation:

Solution

Given that:

(1)The Economist A

The Spending multiplier = 8

In closing the output gap of $32 billion, required increase in spending = $32 billion / 8 = $4 billion

Thus,

The tax multiplier = 4

To close output gap of $32 billion, required decrease in tax = $32 billion / 4 = $8 billion

(2)The Economist B

Now,

The spending multiplier = 4

To close output gap of $32 billion, required increase in spending = $32 billion / 4 = $8 billion

So,

Tax multiplier = 2

To close output gap of $32 billion, required decrease in tax = $32 billion / 2 = $16 billion

8 0
3 years ago
Suppose that white workers are getting paid $21/hour, while similarly-productive African-American workers are getting paid $18/h
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Answer:

C) Not hire African-Americans at all, even if they offer to work for free.

Explanation:

Racism is a type of prejudice that even nowadays continues to exist and sadly many important people try to encourage it, like ____________. Feel free to fill in the blank with your favorite president or favorite cabinet member.

Racism is bad, and racist people are bad people. So it shouldn't be a surprise that a racist man/woman will not hire African Americans even if they offer to work for free. They wouldn't probably hire Latin workers or Asians either.

4 0
4 years ago
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