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3 years ago

If the MPC in an economy is 0.75 and aggregate expenditures increase by $5 billion, then equilibrium GDP will increase by?

Business

1 answer:

Crank3 years ago

4 0

Answer: D) $20 billion

Explanation: MPC, or marginal propensity to consume represents a person's change in the amount they spent compared to a change in their income. The second existing ratio, is the marginal propensity to save (MPS). This is a person's change in the amount they save compared to a change in their income. These two ratios added together will always add up to 1, as consumers either spend or save (that is don't spend).

In order to calculate the equilibrium GDP increase you need to calculate the multiplier.

This multiplier can then be used to calculate the gross domestic product of a country over time. Gross domestic product, or GDP, is the value of a nation's total goods and services produced within a year.

The mutliplier formula is:

1 ÷ (1-MPC)

= 1 ÷ (1-0.75)

The multiplier is then multiplied with the initial expenditure increase to get the new GDP increase in spending:

4 x $5 billion

= $20 billion.

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Cartier corporation currently sells its products for $50 per unit. the company's variable costs are $20 per unit. fixed expenses

charle [14.2K]

The answer is 40%, in which the following are given: the Variable expense is equal to 20 dollars per unit and Sales is equal to 50 dollars per unit. Use the formula Variable Expense Ratio = Variable Expenses / Sales to get the answer.

Variable Expense Ratio = Variable Expenses / Sales
Variable Expense Ratio = 20 dollars per unit / 50 dollars per unit
Variable Expense Ratio = 40 %

The variable expense ratio is an expression of variable production costs of the company as a percentage of sales, calculated as variable expense divided by total sales. It compares a cost that alters with levels of production to the number of revenues generated by production.

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4 years ago

If you are a producer and need to determine Q*, what rule do you use to determine Q*? (Q* = equilibrium quantity)

Lady bird [3.3K]

Answer:

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3 years ago

Santiago Systems Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $5,345,000 100.0% Less: Cost of

solmaris [256]

Answer:

1)Dividend per share = 1

2)Dividend yield = 5%

3)Dividend payout ratio = 0.39

Explanation:

As per the data given in the question,

Net sale = $5,345,000

Cost of goods sold = $3,474,250

Gross margin = $5,345,000 - $3,474,250 = $1,870,750

Operating expenses = $1,140,300

Operating income = $1,870,750 - $1,140,300 = $730,450

Interest expenses = $27,000

Income before taxes = $730,450 - $27,000 = $703,450

Income tax(40%) = $281,380

Net in come = $422,070

Preference of dividend = $40,000

Earnings available to common stockholders = $422,070 - $40,000 =$382,070

Common stock = $150,000

Earning per share = $382,070÷$150,000 = 2.55

Dividend to common stockholders = $150,000

Dividend per share = $150,000÷$150,000 = 1

Market price of common share = $20

Dividend yield = (Dividend per share×100÷market price of common share) = 5%

Dividend payout ratio = Dividend per share÷earning per share =1÷2.55 = 0.39

3 0

3 years ago

Mentor Corp. has provided the following information for the current year: Units produced 3,500 units Sale price $ 200 per unit D

weqwewe [10]

Answer:

Hence, the unit product cost using absorption costing is $318

Explanation:

For computing the unit product cost, the following things is need to be considered.

1. Direct material = Production units × per unit material price

= 3,500 × $70

=$245,000

2. Direct labor = Production units × per unit labor price

= 3,500 × $55

= $192,500

3. Variable manufacturing overhead = Production units × per unit variable manufacturing price

= 3,500 × 20

= 70,000

4. Fixed manufacturing overhead = $350,000

6. Variable selling and administrative cost = Production units × per unit varaible selling price

= 3,500 × 30

= $105,000

7. Fixed selling and administrative costs = $150,000

Now add these all items and divide by number of units.

So, total cost is equal to

= $245,000 + $192,500 + $70,000 + $350,000 + $105,000 + $150,000

= $1,112,500

And, units produced is = 3,500 units

So, unit product cost = Total cost ÷ units produced

= $1,112,500 ÷ 3,500

= $318

Hence, the unit product cost using absorption costing is $318

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3 years ago

Consider the following cash flows of two projects for Fontana Rubber Parts Company. Assume the discount rate for Fontana Rubber

marta [7]

Answer:

Year Dry Prepreg discounted cash flow

0 -$30,000 -$30,000

1 10,000 8,772

2 10,000 7,695

3 10,000 6,750

4 10,000 5,921

5 10,000 5,194

Year Solvent Prepreg. discounted cash flow

0 -$90,000 -$90,000

1 28,000 24,561

2 28,000 21,545

3 28,000 18,899

4 28,000 16,578

5 28,000 14,542

a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project

Dry Prepreg

NPV = $4,330

IRR = 19.86%

MIRR = 17.12%

payback = 3 years

discounted payback = 4.17 years

Solvent Prepreg

NPV = $6,130

IRR = 16.80%

MIRR = 15.51%

payback = 3.21 years

discounted payback = 4.58 years

b. Assuming the projects are independent, which one(s) would you recommend?

both projects, since their NPV is positive

c. If the projects are mutually exclusive, which would you recommend?

Dry prepreg becuase its IRR, MIRR are higher, and its payback and discounted payback periods are shorter.

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3 years ago