If the marginal propensity to consume is 0.75 and taxes are decreased by a lump sum of $400 billion, what will be the increase in income

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Answer 1

The income will be increased by $533.33 billion with MPC equals 0.75 and a decrease in taxes by $400 billion.

What is MPC?

MPC stands for marginal propensity to consume which is determined by dividing the change in consumption of consumers by to change in income earned by them.

Given values:

MPC = 0.75

Decrease in taxes (Change in consumptiuon)= $400 billion

Computation of increase in income (Change in income):

[tex]\rm\ MPC=\frac{\rm\ Change \rm\ in \rm\ Consumption}{\rm\ Change \rm\ in \rm\ Income} \\\rm\ Change \rm\ in \rm\ Income = \frac{\rm \ Change \rm\ in \rm\ Consumption}{\rm\ MPC}\\\rm\ Change \rm\ in \rm\ Income =\frac{\$ 400 \rm\ billion}{\rm\ 0.75}\\\\\rm\ Change \rm\ in \rm\ Income=\$ 533.33 \rm\ billion[/tex]

Therefore, when there is a decrease in consumption by $400 billion with MPC 0.75 then there is an increase in income by $533.33 billion.

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Related Questions

An online footwear company advertises that for every pair of shoes sold, a pair will be donated to someone in need. Employees at the company can multiply those donations by meeting specific sales and customer-service goals. The company is using _______ to influence employee behavior. Feedback clan control management by objectives feedforward control bureaucratic control

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Answer:

please don't trust those links

Which statement is true about third parties in a contract?
OA. They don't need to be specifically named in the contract.
B. They are involved in the offer of the contract.
OC. They can sue if contract performance is not met.
D. They're always involved in the acceptance of the contract

Answers

I think either B or OC is the answer

When an organization has a central core of key functions and outsources others to vendors who can do them cheaper and faster, the organization is said to have a ______ structure.

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When an organization has a central core of key functions and outsources others to vendors, it is said to have a hollow structure.

What is Hollow structure?

This is an organizational structure in which the non core processes are outsourced while the core processes are done internally.

This structure are normally outsourced to vendors who can do them cheaper and faster.

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Income tax expense for the year was $372,000. Income taxes payable decreased by $34,000 during the year, resulting in an ending balance of $71,000. How much cash was paid for income taxes during the year

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Based on the income tax expense, and the change in income tax payable, the cash paid in income taxes was $406,000.

How much was paid in taxes?

This can be found by the formula:

= Income tax expense + Decrease in tax payable

Solving gives:

= 372,000 + 34,000

= $406,000

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Lev, an agent for Mill Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Mill Grains, and the company ratifies the contract. The contract is

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Given that the contrsct that is being made here has been said to be ratified, the contravt can be said to a valid contract.

What is a valid contract?

This is a term that is used to refer to a contract that has been found to b e valid and also enforceable.

What makes a contract valid is the fact that there is an expressed offer, and a valid acceptance.

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A north face ad shows a rock climber hanging underneath a treacherous overhang, with the tagline, "never stop exploring. " in terms of the communication process, the ________ would be north face.

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A north face ad shows a rock climber with a tagline "Never stop Exploring".

The communication process, the source would be north face.

What is Rock climbing?

Rock climbing is an activity in which an individual or a group climbs the mountains and try to reach the top. Rock climbing is an activity enjoyed by many but this is also dangerous as every year a number of climbers get injured or sometimes result in death.

Source is the answer to the given question. The source would be north face as mountains are near the north and therefore a climber have to turn his/her face towards the north in order to climb it.

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A discount on bonds payable occurs when a company issues bonds with an issue price less than par value. Group of answer choices false true

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It is a true statement that discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

What is a discount on bonds payable?

This means the difference between face value of a bond and the reduced price at which it was sold by the issuer.

Hence, this discount occurs when a company issues bonds with an issue price less than par value.

Therefore, the statement is a true statement.

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What type of information is typically communicated in the information flow from the store to the buyer

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The type of information is typically communicated in the information flow from the store to the buyer is Inventory information.

What is Inventory information?

Inventory information serves as an accounting term that describes the set of of items, component parts and raw materials that the company uses in production or sells.

Therefore, Inventory information let us know information flow from the store to the buyer is Inventory information.

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Publishers in an ad network (typically media sites) have to share ad revenues with the network. What benefit does an ad network provide to make it worth sharing these revenues

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The benefit that ad network provide that makes its worth sharing with these revenues is because the publisher does not have to coordinate advertising with multiple search engines.

What is an ad network?

Also called an advertising network, is a firm's services that helps to connects advertisers to websites that want to host advertisements.

This, these publishers share ad revenues with the network because the publisher does not have to coordinate advertising with multiple search engines.

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Which of the following is the BEST reason to use cash for making purchases?

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Cash makes it easier to budget and stick to it. Its easier to track exactly how much money you are spending.

The materials price variance is calculated using the ______ quantity of the input purchased.

Answers

Answer:

the answer is: calculator

If someone thinks that their language is superior to others, it can cause defensiveness. In this case, what style should be used to move a conversation toward nondefensiveness?.

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When someone believes their language is superior to others', they may become defensive. The descriptive language should be utilized in this circumstance to steer the debate away from defensiveness.

What is descriptive style?

When an author writes in a descriptive style, they are using words to paint a picture for their audience of a person, place, or thing. To convey the author's impressions through their five senses.

In descriptive communication, a person tries to figure out about the determination of what information is true, is nondefensive, but evaluative communication is perceived as hunting for information that makes a listener defensive.

Empathy is emotional support for others, putting the listener in a non-defensive position, while equality puts both the listener and the speaker on an equal footing, promoting non-defensiveness.

This is because they seek knowledge that the listener may perceive as dangerous, evaluative and problem-solving are defensive.

Therefore, the person is thinking about the descriptive style.

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Answer:

Equal

Explanation:

An equal communication style moves superiority, which can cause defensiveness, to nondefensiveness.

According to liquidity preference theory, the opportunity cost of holding money is a. the difference between the inflation rate and the interest rate on bonds. b. the cost of converting bonds to a medium of exchange. c. the inflation rate. d. the interest rate on bonds.

Answers

The opportunity cost of retaining money, as per liquidity preference theory, is Option D.

What Is the Definition of Liquidity Preference Theory?

Liquidity Preference Theory is a model that proposes that an investor should seek a higher interest rate or premium on assets with extended maturities that involve higher risk because, all else being constant, investors seek cash or other extremely liquid assets.

According to Liquidity Preference Theory, investors seek progressively bigger premiums on medium and long-term securities against short-term securities.

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Consumers and companies populate two market environments today. One is the traditional ________ and the other is the ________.

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The market environments made up of consumers and companies is the traditional marketplace, and the other is the marketspace.

What is the marketplace?

Corresponds to the market where exchanges, transactions and negotiations of products and services between individuals and organizations are carried out.

Therefore, through the marketplace and marketspace, economic transactions are carried out and determined by the law of supply and demand.

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The same basic formulas used for materials and labor are used to analyze ______ portion of manufacturing overhead.

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The same basic formulas used for materials and labor are used to analyze variable portion of manufacturing overhead.

What is variable manufacturing overhead?

Variable manufacturing overhead costs are costs that change as the volume of production changes or the number of services provided changes.

Examples of variable manufacturing overhead include:

Production suppliesEnergy costs to run production linesWages for those handling and shipping the product.

Hence, the same basic formulas used for materials and labor are used to analyze variable portion of manufacturing overhead.

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In order to scan résumés, employers will use a scanner which looks like a compact copy machine. please select the best answer from the choices provided t f

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When employers need to scan a resume, the machine used looks like a compact copy machine so this is True.

How do employers scan resumes?

Businesses need equipment that are capable of doing multiple things at once such as scanning and photocopying.

This is why employers use compact copy machines when they need to scan resumes as these do more than just scanning.

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XYZ Office Supplies is about to introduce a new customer service program that will affect all of its 355 sales and service employees. Job duties will be changed and the employee rewards system will be altered to fit this new customer focus. Moreover, the company wants to improve the efficiency of work processes, thereby removing some of the comfortable (and ofter leisurely) routines that employees have followed over the years. Top management is concerned about the different types of forces resisting change that the company will potentially experience during this change process. XYZ attempts to assist the change process by putting employees in direct contact with customers. Here, the company is trying to:

Answers

By putting employees in direct contact with customers before implementing the new service program, it is an attempt by XYZ to create urgency for change.

How to implement organizational changes?

Changes can impact the way work is performed, altering the organizational culture in some cases, which can generate resistance. To reduce this situation, it is essential to implement the changes gradually, with objectivity and clarity about the benefits that will be achieved.

Therefore, organizational changes must be implemented smoothly, in order to provide optimal training and security for the employee.

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What is Nico's portfolio beta if he invests an equal amount in asset X with a beta of 0.60 and asset Y with a beta of 1.60

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Based on the betas of each asset and the amount invested in them by Nico, the portfolio beta would be 1.10.

What is the portfolio beta?

It is a weighted amount that is based on the individual asset betas.

Nico invested equally in each asset so there is a weight of 50% to either of them.

The portfolio beta is:

= (Weight of x × Beta of x) + (Weight of y × Beta of y)

= (50% x 0.60) + (50% x 1.60)

= 1.10

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Using the Multiple of Income Method to estimate life insurance needs, what is the minimum amount of insurance needed for Susan Smith if her annual income is $60,000

Answers

The minimum amount of insurance needed for Susan Smith if her annual income is $60,000 is: $300,000.

Multiple of Income Method

Using this formula

Low=Current income x 5

Where:

Current income=$60,000

Let plug in the formula

Low=$60,000 x 5

Low= $300,000

Therefore the minimum amount of insurance needed for Susan Smith if her annual income is $60,000 is: $300,000.

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Technological innovation can support a ________ strategy, in which an advantage comes from having a unique good or service for which customers are willing to pay a premium price.

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Answer:

The answer is differentiation

Explanation:

Technological innovation can support a differentiation strategy, in which an advantage comes from having a unique good or service for which customers are willing to pay a premium price.

A ________ firm is one that, by operating in more than one country, gains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors.

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A company that has operations in more than one country. Global corporations have cost and reputation advantages in research, production, marketing, and financial operations that domestic competitors do not have.

Why is a global firm?

A global corporation is one that operates in more than one country all over the world. It is the inverse of a domestic corporation that only operates in one country. These businesses are also known as global corporations, multinational corporations, multinational companies, or MNCs.

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Suppose that the Federal Reserve buys $400 billion worth of government securities from the public. If the required reserve ratio is 20 percent, the maximum increase in the money supply is

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If the required reserve ratio is 20 percent, the maximum increase in the money supply is $2,000 billion.

Money supply

First step

Multiplier=1/Reserve ratio

Multiplier=1/0.20

Multiplier=5

Second step

Increase in money supply=Multiplier×Federal reserve

Increase in money supply=5×$400

Increase in money supply=$2,000 billlion

Therefore If the required reserve ratio is 20 percent, the maximum increase in the money supply is $2,000 billion.

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Managers at a start-up company are working to identify the reporting structures and culture that will best enable employees to accomplish the goals of the company as it grows. What process are the managers undertaking

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The process undertaking by the managers by identifying the reporting structures and culture is known as organizational designs.

Who is a manager?

It should be noted that a manager is an individual who guides and motivates tye team mates to achieve a common goal.

In this case, the process undertaking by the managers by identifying the reporting structures and culture is known as organizational designs.

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Perit Industries has $165,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are:

Answers

The net present value of project A that Perit Industies plans to undertake is $-79,009.91.

What is the net present value?

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Cash flow in year 0 = -165,000Cash flow in year 1 - 6 = 21,00Cash flow in year 6 = 9500

I = 14%

NPV = $-79,009.91.

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Monetarists argue that fiscal policy is ineffective because: a. the velocity of money is predictable. b. the crowding-out effect reduces investment. c. prices and wages are sticky in the short run. d. it causes the value of the dollar to depreciate.

Answers

Monetarists argue about the ineffectiveness of the fiscal policy because the crowding-out effect leads to a reduction in investment.

Option B is the correct answer.

What is Monetarism?

Monetarism is a theory of macroeconomics where the money supply variates in respect of economic variables like production volume, market prices, employment factors, etc.

The crowding-out effect creates the engagement of the government in the market due to which rates of interest are goes on rising which ultimately leads to a downfall in the investment by private entities. As a result, the fiscal policy of the government becomes ineffective.

Therefore, the crowding-out effect results in the ineffectiveness of the fiscal policy as argued by the Monetarists.

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Li Wei is searching through his company's files of its customers to choose ones that would most likely be interested in the new product line his company has developed. Which stage of the personal-selling process is this

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According to the personal-selling process, the prospecting stage is the first step in the sales process and consists of searching for prospective clients.

What are the prospecting stage?

It is the first phase of the personal-selling process and its purpose is to identify potential clients.

In other words, sellers obtain candidates who need the company's product or service, for this, it is essential to carry out market research in order to identify people who have needs that the company can satisfy.

Therefore, we can conclude that according to the personal-selling process, the prospecting stage is the first step in the sales process and consists of searching for prospective clients.

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based on the production possibilities schedule, what letter would represent the most allocatively efficient point if a country had
ust signed a large international trade deal to export ethanol?

Answers

The letter that would represent the most allocatively efficient point if a country had just signed a large international trade deal to export ethanol is F.

What is allocative efficiency?

Allocative efficiency refers to the specific choice of the mix of production along the production possibilities frontier that achieves the best production outcome.

Based on the preferred export of a large quantity of ethanol, the best allocative efficiency that the country can achieve would be to produce more corn instead of tomatoes, which it can import at a cheaper rate.

Thus, the letter that would represent the most allocatively efficient point if a country had just signed a large international trade deal to export ethanol is F.

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What tends to happen to a nation that increases its participation in an open economy with an international sector?.

Answers

Generally, nations that engage in open economies export and import products with other countries more easily.

What is an open economy?

Open economy is an economic term that refers to an economic system in which two or more countries maintain an exchange agreement of goods or services.

The open economy includes the transfers and reception of:

Goods.Services.Technologies.Others.

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If a scholar associates continued economic challenges in Africa as an outcome of previous European colonialism, to which theoretical paradigm would they likely subscribe

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Conflict theory is a framework in which conflict is the result of a wrong, or wrong distribution of resources. This could be the case in colonial Africa, as the European colonies enjoyed many resources.

How did European colonization affect the African economy?

Colonialism made African colonies dependent on introducing a unique cultural economy in the region.

The Europeans also humiliated African workers and traders. It forced the Africans to work in the colonial lands for very low wages and deported them.

Thus, the theoretical paradigm that can be associated with these economic challenges is Conflict theory.

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The demand for air travel in the tourism industry tends to be relatively ______. Thus, small _____ in air fares will result in relatively _____ in air travel.

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Demand for air travel in the tourism industry tends to be relatively elastic and as a result, the small reductions in air fares will result in relatively large increases in air travel.

What is a demand?

It means the quantity of consumers that are willing to buy products at various prices during a given period of time.

The demand for air travel is also affected by price which is asserted by law of demand that stated "the higher the price, the lower the quantity demanded.

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