Assume the marginal propensity to save is 0.10. Firms become optimistic and increase investment spending by $10 billion. Other things being equal, real GDP will:

Answers

Answer 1

The real GDP will increase by $20 billion if the MPS equals 0.10 and investment spending increases by $10 billion.

What is MPS?

MPS stands for marginal propensity to save which is determined by deducting the MPC value from 1. This value is used in computing the investment multiplier.

Given values:

MPS = 0.10

Change in investment spending (increase) = $10 billion

Computation of change in real GDP (increase):

[tex]\rm\ Change \rm\ in \rm\ real \rm\ GDP=\rm\ Multiplier\times\ \rm\ Change \rm\ in \rm\ investment \rm\ spending\\\rm\ Change \rm\ in \rm\ real \rm\ GDP=\frac{1}{MPS}\times\ \$10\rm\ billion\\\rm\ Change \rm\ in \rm\ real \rm\ GDP=10\times\ \$10\rm\ billion\\\rm\ Change \rm\ in \rm\ real \rm\ GDP=$20\rm\ billion[/tex]

Therefore, when the investment spending increased by $10 billion with MPS equal to 0.10 then the real GDP will also increase by $20 billion.

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Related Questions

Donna is well-respected for her decision-making skills, always supporting her proposals with detailed pro and con insights she gathers from sources with a balance of perspectives. Donna's strategy to _______ facilitates acceptance of her decisions by top management.

Answers

Answer:

Rely on objective information

Explanation:

You see a pair of jeans on sale for 10% off the regular price of $50. You have a credit card with a 13% interest
rate. If you buy the jeans today with the credit card and pay them off after two months, are
you paying more or less than the regular $50 price for them? Please explain your decision

Answers

The person will pay more than the regular $50, he will pay $50.85 for the jeans that he brought for the with the credit card.

What is credit card?

A credit card is a payment card that is issued to users to inform them of their need to pay a merchant for goods and services based on their outstanding debt.

The rebate of 55 days are given to the credit card holder for the repayment of money that he purchased with the help of credit card.

In the given case, the customer will pay $45 for purchasing the shoes of $50, with the help of credit card. He makes the payment of $45 by the credit card.

He will incur the interest at the rate of 13% on the regular price of $50, because the limit of 55 days is crossed.

[tex]\$45 \times 13\% = 50.85[/tex]

Therefore, the person will pay more from the regular price of $50.

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If reserves increase by $8 billion, what is the difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent compared to when it is 10 percent

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The difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent is $16 billion.

                                                     

Difference in the resulting change

Using this formula

Difference in the resulting change=(Increase in reserve/required reserved ratio of 10%)-(Increase in reserve/required reserved ratio of 12.5%)

Let plug in the formula

Difference in the resulting change=($8 billion/0.10)-($8 billion/0.125)

Difference in the resulting change =$80 billion-$64 billion

Difference in the resulting change=$16 billion

Therefore the difference in the resulting change in checkable deposits when the required reserve ratio is 12.5 percent is $16 billion.

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Rasheed works for Company A, earning $421,000 in salary during 2021. Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year

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Based on 2021 FICA tax rates, the amount of FICA taxes that Rasheed will pay in 2021 is $16,947.60.

What are Rasheed's FICA taxes?

He will pay 6.2% for Social Security on the first $148,800:
= 6.2% x 142,800

= $8,853.60

He will also pay 1.45% for Medicare:

= 1.45% x 421,000

= $6,105

He will pay 0.9% for all amounts above $200,000 for Medicare Surtax:

= 0.9% x (421,000 - 200,000)

= $1,989

Total is:

= 1,989 + 6,105 + 8,853.60

= $16,947.60

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The benefit of a mutual fund for investors is that.

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Answer: investing in mutual funds is diversification

Explanation:hope this helps :3 Please mark me brainliest

The window of opportunity to capitalize on an innovation is very narrow, so businesses with new ideas should:_______.

a. Develop customer-centric marketing that is enhanced with AI.

b. Move quickly so that competitors do not swoop in and pass them by.

c. Conserve their resources and hope they can survive disruptive innovation.

d. Partner with offshore suppliers to reduce labor costs

Answers

So the window for capitalizing on innovation is so small, that companies with innovative ideas should act quickly and Develop AI-assisted customer-centric marketing strategies.

Thus Option A is correct.

What is the definition of customer-centric marketing?

Customer-centric marketing is a marketing approach that is focused on the needs and wants of customers. It's all about putting customers first, using a mix of insight, good judgement, and statistics about their behavior.

Being customer-centric entails more than simply recognizing the customer's significance.

It all comes down to getting to know your consumers so you can anticipate their needs, expectations, and communication choices, create better experiences, and build long-term connections. It's also easier to say than to do.

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According to the phillips curve, policymakers would reduce inflation but raise unemployment if they.

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Answer:

decreased the money supply

Explanation:

The profits from various forms of trafficking are estimated to be _____ annually.

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Answer:

The answer is $150 billion

Explanation:

The profits from various forms of trafficking are estimated to be $150 billion annually.

The firm will pay the dividend to all shareholders of record on a specific date, set by the board, called the ________ date.

Answers

Answer:

organisation mineral resources

When Janet sends out an e-mail to her subordinates reminding them that the offices will be closed for the upcoming holiday weekend and wishes them all a good time with their friends and family, it is an example of ________ communication.

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The fact that Janet sent out an e-mail to her subordinates to remind them of the office closure would make this an example of a One-way communication.

What is a one-way communication?

This is a communication where the sender of the message does not expect a response to their message.

Janet sent an e-mail reminding her subordinates that there would be an office closure but did not ask for a response to her message. This was therefore a one-way communication.

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Business firms sometimes refer to social media as ________ media.

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Business firms sometimes refer to social media as consumer generated media.

What is social media?

Social media is an internet-based form of communication which enhance users sharing of ideas, thoughts and information.

There are many forms of social media, like

BlogsPhoto-sharing sitesVirtual words

Hence, business firms sometimes refer to social media as consumer generated media.

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An additional cost from selecting a certain course of action is a(n): Multiple Choice Sunk cost. Period cost. Pocket cost. Discount cost. Incremental cost.

Answers

Answer:

Incremental cost.

Explanation:

Hope that helps!!

If you borrow money to pay for an item, your _____ in that item at a given time is the part of the principal you have paid.

Answers

in you borrow money to pay for an item your interest

Which of the following scenarios would the National Highway Traffic Safety Administration be involved in?
investigating the use of a faulty gearbox in a semitrailer
determining the number of cars sold in the country in a year
building railways within city limits
modifying the fuel efficiency standards for new cars
setting the emission standards of an automotive factory

Answers

The National Highway Traffic Safety Administration be involved in determining the number of cars sold in the country in a year.

What is Traffic?

In Simple terms, Traffic can be defined as the flow if Vehicle(Especaily) to and fro a particular axis or road. When there is a large amount of vehicle moving through a small passage, we say traffic is high.

Too much vehicle plying on a road can lead to traffic congestion.

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Answer:

See image

Explanation:

See image

As the technology manager for your firm, you have been tasked with identifying options for cloud-based software and hardware that will be hosted by an external vendor. In addition, the firm wants control over the operating system, underlying applications, and some of the software packages. Based on these specifications, you will be evaluating _____.

Answers

Based on making specifications, on identifying options for cloud-based software and hardware, you will be evaluating Cloud computing.

What is Cloud computing?

Cloud computing serves as the process involving delivering of hosted services over the internet.

Therefore, Cloud computing involves making different services through the Internets, such as data storage.

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Decisions related to _____ are considered structured decisions at the operational management level of an organization

Answers

Answer:setting queue priorities

Explanation:

what is one key difference between payday loans and title loans?

Answers

Personal loans usually have a fixed interest rate and a predetermined payback period. The length of your loan might range from 24 to 60 months. Rates will be determined mostly by your credit score and credit history, and can range from single digits to triple digits. Fees differ depending on the lender.

Title loans are high-interest, short-term loans secured by the title of your vehicle. The amount you may borrow is determined by the car's worth, and payback terms range from 15 to 30 days. Rates can be in the tens of thousands of dollars.

What two outcomes would be considered part of the feedback loop in the communication process?.

Answers

Feedback is the state in which an output or loop response affects or influences an input or update.

What is Feedback Loop?

Feedback loop is an ongoing process where you listen and talk to your customers, and then make changes based on repeated evaluations.

It means starting in a place of humility, knowing that there is always room for improvement.

The two outcomes that would be considered as part of the feedback loop in the communication process are:

A consumer uses a car as a result of their interaction with a salesperson.A retailer notices an increase in sales following its purchase of advertising in Sunday's paper.

Thus, These are the two outcomes that would be considered as part of the feedback loop in the communication process.

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If the government reduces some of the national debt and as a result households have more money to spend, this can result in: Group of answer choices Crowding in. Fiscal crowding. External debt. Deficit spending.

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If the government reduces some of the national debt and as a result households have more money to spend, this can result in crowding in.

What is crowding in?

Crowding in is when an increase in government spending increases the amount of money in the economy. This increases the money that households can spend and it also increases the level of investment spending in the economy.

Suppose the market for money, drawn with the value of money on the vertical axis and the quantity of money on the horizontal axis , is in equilibrium. If the money supply increases, then at the old value of money there is an

Answers

If the money supply increases, then at the old value of money there is an excess supply of money that will result in an increase in spending. The entire amount of money in circulation in an economy at any given time is referred to as the money market.

What is money market?

The money market is defined as dealing in debt with a maturity of less than one year. Investors use it to make a modest profit.

While governments and corporations use it to keep their cash flow constant. Long-term debt and equity instruments are sold and bought on the capital market.

Thus, excess supply of money that will result in an increase in spending.

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If you are the manager of a hotel and a person who booked a room for the week calls to cancel the reservation, you have a duty to attempt to rent the room to someone else to minimize the damages. This is known as the duty to ______ damages.

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In the situation, the duty to try to rent the room to someone else to minimize the damage is known as the duty to mitigate the damage.

What is the duty to mitigate damages?

Corresponds to the obligation that a person has to reduce his losses by taking reasonable actions to do so, even if the losses are not related to a personal action.

Therefore, the duty to mitigate damages helps in planning actions and strategies that reduce the consequences caused by losses to a business.

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A contractionary monetary policy combined with an expansionary fiscal policy will:.

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If fiscal policy is expansionary and monetary policy is contractionary, interest rates will almost certainly rise because both measures serve to raise interest rates.

What do the terms Monetary Policy and Fiscal Policy mean?

The Monetary policy regulates the amount of money available in an economy as well as the channels by which new money is provided. A central bank's goal in controlling the money supply is to impact macroeconomic factors such as inflation, consumption rate, economic growth, and general liquidity.

Fiscal policy is the process through which a government modifies its spending levels and tax rates in order to monitor and impact the economy of a country. It is a monetary policy strategy in which a central bank controls a country's money supply. These two policies, in various combinations, are used to direct a country's economic goals.

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Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. In 2021, she sells the following long-term assets used in her business: Asset Sales Price Cost Accumulated Depreciation Building $ 232,800 $ 202,800 $ 54,800 Equipment 82,800 150,800 25,800 Lily's taxable income before these transactions is $193,300. What are Lily's taxable income and tax liability for the year

Answers

Lily’s taxable income for the year is $235,900, and her tax liability for the year is $45,152.50.

Calculation of taxable income and tax liability

Note: See the attached photo for the proper arrangement of the table in the question.

These can be calculated as follows:

Profit on building = Sales price of building – (Cost of building – Accumulated Depreciation of building) = $232,800 – ($202,800 - $54,800) = $84,800

Loss on equipment = (Cost of equipment – Accumulated Depreciation of equipment) - Sales price of equipment –= ($150,800 - $25,800) - $82,800 = $42,200

Net profit = Profit on building - Loss on equipment = $84,800 - $42,200 = $42,600

Taxable income before transaction = $193,300

Total taxable income = Taxable income before transaction + Net profit = $193,300 + $42,600 = $235,900

In line with the tax rules, we have:

Tax Liability = ((Taxable income before transaction - $85,650) * 28%) + ((17,442 + Net profit) *25%) = (($193,300 - $85,650) * 28%) + (($17,442 + $42,600) *25%) = $45,152.50

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Calculate the total return for each fund. Take the ending value divided by 1,000 (the beginning value), subtract 1, and multiply by 100. What are your investment returns for your money market fund and your stock fund

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The total return for each fund is calculated as follows:

                                 Money Market Fund       Stock Fund

Total return                             35%                         25%.

What is the total return?

The total return can be computed using the given formula.

It can also be computed as the dollar returns divided by the beginning value (investment cost), multiplied by 100.

Question Completion with Calculations:

                                 Money Market Fund       Stock Fund         Total Fund

Beginning value                 $1,000                         $1,000             $2,000

Ending value                      $1,350                         $1,250              $2,600

Total return                          $350                            $250                $600

Using the given formula, the total return for each fund is as follows:

Total return          ($1,350/$1,000 - 1) x 100   ($1,250/$1,000 - 1) x 100

=                                   35%                                     25%                   30%

Thus, the total return for each fund is 35% for the Money Market Fund and 25% for the Stock Fund.

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Under the _____ concept, the company carefully integrates and coordinates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

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Under the Integrated Marketing Communucation concept, the company carefully integrates and coordinates its many communication channels to deliver message.

What is Integrated Marketing Communication?

Integrated marketing communication is seen as the process employed by organisation to unify marketing communication means like public relations, social media, audience analytics, and advertising, into a brand identity that remains consistent in all media channels.

Therefore, the answer is Integrated Marketing Communication.

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Acme, Inc., bought land and a building for $150,000. Acme plans to use the building for 20 years and then sell it. What is the useful life of the land

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Based on the term of usage for the land by Acme Inc., the useful life of the land is 20 years.

What is the useful life of the land?

The useful life of an asset refers to the number of years or periods that the company that acquired the asset, plans on using it.

Acme Inc. in this scenario, plans on using the land for 20 years before they sell it. The useful life must therefore be the 20 years.

In conclusion, the useful life is 20 years.

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Assume you invested $5,000 in a mutual fund that earns 6% compounded annually on December 1, 2018. The balance in your account on December 1, 2023 will be $

Answers

The balance in your account on December 1, 2023 of the mutual fund account will be $6691.

How to calculate the mutual fund?

From the information given, the person invested $5,000 in a mutual fund that earns 6% compounded annually on December 1, 2018.

The amount in the account by the date will be:

= 5000 × ( 1 + 6%)^5

= 6691

In conclusion, the correct option is $6691.

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A high-end jewelry designer creates several different brands of jewelry for women of different ages and tastes. To gain the greatest exposure to her potential customers on social media, her SMIS should be designed to use the platforms that

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For a high-end jewelry designer to gain exposure to her potential customers she should use social media that have the highest reach of woman that uses Jewelry.

What is social media?

Social media are platforms that allows for interaction among individuals, this is done online through internet facilities and it allows to reach wide range of audience.

It allows for sales and marketing of different products.

Therefore, For a high-end jewelry designer to gain the greatest exposure to her potential customers she should use social media that have the highest reach of woman that uses Jewelry.

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The accounting scandals of the early 2000s led many people to question the legitimacy of.

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Ratio analysis as a means of evaluating the performance of a firm

______ marketing is the practice of focusing on the identification and recruitment of influential people to advocate a company's products, services, and brands rather than focusing exclusively on prospective buyers.

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Influencer marketing focus on the identification and recruitment of influential people to advocate a company's products and brands rather than focusing exclusively on prospective buyers.

What is marketing?

Marketing involves all strategies and various processes a company or firm make use of to get a product to the end users.

It include how they advertise and distribute their product to sell.

Therefore, Influencer marketing is the practice of focusing on the identification and recruitment of influential people to advocate a company's products, services, and brands rather than focusing exclusively on prospective buyers.

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