f the multiplier in an economy is 3, a $30 billion increase in net exports will Multiple Choice increase GDP by $90 billion. reduce GDP by $10 billion. decrease GDP by $90 billion. increase GDP by $30 billion.
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If the multiplier in an economy is 3, a $30 billion increase in net exports will
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increase GDP by $90 billion.
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reduce GDP by $10 billion.
-
decrease GDP by $90 billion.
-
increase GDP by $30 billion.
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- Assume you are considering a USD 100,000 investment for which the future cash flows depend on the state of the economy. What are the expected cash flow and rate of return of the investment considering the three probability of the state of the economy? State of the economy Probability of the states CF from the investment % returns (CF / Investment cost) Economic recession 50% USD 10,000 10% (10,000 / 100,000) Moderate economic recession 40% USD 12,000 12% (12,000 / 100,000) Strong economic recession 10% USD 14,000…An economy in which household consumes 75% of all additional income and all taxes are lumpsum, an when government injects a stimulus of GHC 40 million GDP will? A. Increase by GHC 40 millionB. Decrease by GHC 40 millionC. Increase by GHC 80 millionD. Increase by GHC 160 millionE. Decrease by GHC 160 millionThe payoffs of an investment are dependent on the state of the economy. The economy can have two states, recession or growth, with equal probability. If the payoff in the event of growth is $140 and in the event of recession is $80, what is the expected payoff for the investment? a.$100 b.$130 c.$120 d.$110
- If the government wishes to decrease GDP by $2,000b, and the MPC is 0.6, it should: Question 25 options: increase its spending by $800b. decrease its spending by $1,200b. increase its spending by $1,200b. decrease its spending by $800b.Suppose that the investment demand curve in a certain economy is such that investment declines by $130 billion for every 1 percentage point increase in the real interest rate. Also, suppose that the investment demand curve shifts rightward by $150 billion at each real interest rate for every 1 percentage point increase in the expected rate of return from investment. If stimulus spending (an expansionary fiscal policy) by government increases the real interest rate by 2 percentage points, but also raises the expected rate of return on investment by 1 percentage point, how much investment, if any, will be crowded out? Instructions: Enter your answer as a whole number. 2$ billionMost economies have a goal of maximizing the average consumption per period. Assume that during each year, an economy saves the same (to be determined) percentage S of its production. During a year in which the beginning capital level is K, a quantity K1y2 of capital is produced. If the economy saves a percentage S of its capital, then during the current year it consumes (1 2 S)K units of capital and, through savings, adds (SK) 1y2 units of capital. Also, during any year, 10% of all capital present at the beginning of the year depreciates or wears out. a. What annual savings percentage S maximizes the long-run average consumption level? Assume that year 50 represents the long run, so that the objective is the consumption level in year 50. You can assume the initial capital is 1 (for some appropriate measurement unit). b. Use SolverTable to see how the optimal value of S depends on the annual depreciation rate.
- An economy has an ICOR of 4.5. What would be its average annual growth rate if its Domestic Savings ratio is 20% and Net Imports ratio is 7%?True or false: If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 250 million, then output per person increases. Explain.Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2021: Sales quantity Unit selling price Unit variable costs Fixed costs 2,200 barrels $75 per barrel $45 per barrel $18,480
- Consider the following information for Smart Products: total assets P1000; sales-P1540; net profit margin-12%; dividend payout ratio=40%; accounts payable=P308. If sales are forecast to increase 30%, the "short cut" estimate of external funds required (EFR) would be P________?PRICE (Thousands of dollars perhome). 500 450 400 350 300 250 200 150 100 50 0 0 10 + + + + 30 40 50 60 70 80 INCOME (Thousands of dollars per year) + 20 The variable shown on the vertical axis is The units for the variable on the horizontal axis are + 90 100 ? There are two ways to view the information presented on the graph. First, the graph tells us the amount a person with a certain income is likely to spend on a home, and second, it tells us the probable income of a person who spent a certain amount on a home. For example, if an individual earned $50,000 last year and purchased a new home, you would expect that person to have paid about for the home. Similarly, if someone just paid $250,000 for a home, you could use this graph to estimate that this person's income was probably aroundIf the required reserve ratio is 15%, currency in circulation is $400 Billion, checkable deposists are $8000 billion, and excess reserves total is $0.8 billion. first) calculate the M1 money multiplier second) if the monetatyr base now increases by $275 billion, how much would money supply increase by?