What leads to excess demand?

If an economy consumes 68 percent of any increase in disposable income, then an increase in autonomous investment of $1 billion

madreJ [45]

Answer: The answer is $3,125,000,000

Explanation:

Since autonomous investment is government investment in the economy

68% of the increase in disposable income was consumed

Using the equation

Since Y = yd , spending in the economy is represented by

Equation C = 0.68yd, investment = $1,000,000,000

Y = C + I

Y = 0.68Y + 1,000,000,000

Y - 0.68 = 1,000,000,000

Factor out the variable Y

Y ( 1 - 0.68) = 1,000,000,000

0.32Y = 1,000,000,000

Divide both sides by 0.32

0.32Y/ 0.32 = 1,000,000,000 / 0.32

Y = 3,125,000,000

Therefore the increase in total spending will be $3,125,000,000

4 0

4 years ago

Sweet Treats common stock is currently priced at $36.72 a share. The company just paid $2.18 per share as its annual dividend. T

Phantasy [73]

Answer:

Cost of equity= 8.0%

Explanation:

<em>Cost of equity can be ascertained using the dividend valuation model. The model states that the price of a stock is the present value of future dividends discounted at the required rate of return.</em>

Cost of equity (Ke) =( Do( 1+g)/P ) + g

g - 2.2%, P - 36.72, D - 2.18

Ke = (2.18 ×(1+0.022)) /38.72 + 0.022 ) × 100

= 0.07954 × 100

= 8.0%

Cost of equity = 8.0%

4 0

3 years ago

A company's inventory balance at 12/31/16 was $191,600 and $204,000 at 12/31/15. its accounts payable balance at 12/31/16 was $8

Ahat [919]

Company
Dec. 31. 2016
Assets
Cash- $191,600

Dec. 31. 2015
Assets
Cash- $204,000

Goods sold for 2016- $724,000

Liabilities
Dec. 31.2016
Accounts Payable- $88,000

Liabilities
Dec. 31. 2015
Accounts payable- $83,600

In order to find the company's total amount of cash payments for 2016, you find the minus the previous assets with the new assets..
Ex. $191,600 - $204,000 = -12,400

Then minus your answer with Goods Sold in 2016
Ex. $724,000 - $12,400 = $711,600

Then, minus the pervious amount of Accounts payable with the new Accounts Payable
Ex. $88,000 - $83,600 = $4,400

New payments for 2016-
Ex. Add $88,000 + $83,600 = $171,600

Then, $171,600 - $4,400 = $167,200

Thus, $167,200 equals the company's total amount of cash payments 2016.

3 0

3 years ago

Monte Vista uses the perpetual inventory system. At the beginning of the quarter, Monte Vista has $46,000 in inventory. During t

oksian1 [2.3K]

Explanation:

Net purchases= Gross purchases- Returned inventory- Discount on purchases

= $10,300- $800- $360= $9,140

Ending inventory= Beginning inventory+ Net purchases- Cost of goods sold

Cost of goods sold= Beginning inventory+ Net purchases- Ending inventory

= $46,000+ $9,140- $34,500= $20,640

3 0

3 years ago

When the price of a good is high, selling the good is profitable, and so the quantity supplied is large.

STatiana [176]

False, since higher prices pushes away consumers but lower prices increases consumers.

6 0

4 years ago