The Keynesian analysis of
aggregate demand indicates that a
decline in the price level causes:

Select one:
a. an increase in the real money
supply, a decline in interest rates,
an increase in investment
spending, and an increase in
aggregate output demanded.

b. a decline in the real money
supply an increase in interest
rates, a decline in investment
spending, and a decline in
aggregate output demanded.

c. a decline in the real money
supply, a decline in interest rates,
an increase in investment
spending, and an increase in
aggregate output demanded

d. an increase in the real money
supply, an increase in interest
rates, a decline in investment
spending and a decline in aggregate output demanded

= an increase in the real money
supply, a decline in interest rates,
an increase in investment
spending, and an increase in
aggregate output demanded.

Answers

Answer 1

The Keynesian analysis indicates that the fall in price level causes an increase in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demanded.

What is an aggregate demand?

This refers to the total amount of demand of all goods and services produced in an economy.

The Keynes's theory asserts that the aggregate demand helps in measurement of spending by households, businesses, government etc

However, the analysis depicts that an increase in the real money supply, a decline in interest rates, an increase in investment spending, and an increase in aggregate output demanded.

Therefore, the Option A is correct.

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Related Questions

Which of the following answer options are your employer's responsibility? (OSHA)
(A) Develop a written hazard communication program
(B) Implement a hazard communication program
(C) Maintain a written hazard communication program

Answers

Answer: A, B, and C. ALL OF THE ABOVE!

Explanation:

They're all the correct answer.

An employer's OSHA responsibility with regard to a hazard communication program is (C) Maintain a written hazard communication program.

OSHA's HCS, 29 CFR 1910.1200 (e) specifically requires the employer to maintain a written hazard communication.

This written program includes maintenance of labels and other warning forms, safety data sheets.

It is also required that the employer should provide safety information and training, especially for its employees.

Thus, the responsibility of the employer is not to develop or implement a hazard communication program but to maintain a written hazard communication program.

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IN the economic order quantity model, if carrying costs increase while all other costs remain unchanged, the number of orders placed would be expected to:_______

a. increase.
b. decrease.
c. remain unchanged.
d. change without regard to carrying costs.

Answers

Answer:

b. decrease

Explanation:

In the EOQ model, if carrying costs increase while all other costs remain unchanged, the number of orders placed would be expected to decrease.

Carrying cost is placed in denominator of the EOQ formula hence as we increase denominator the total quantity will fall. If the carrying cost is high, then we would place lesser order to reduce such costs.

Also, if carrying costs decrease while all other costs remain unchanged, the number of orders placed would be expected to decrease because there is already excess of inventory due to which the new orders have to be decreased to utilize the already pending inventory.

A competitive firm produces a product using labor and plastic. The firm is initially in equilibrium. If the cost of plastic suddenly increases, which of the following will occur?
A. The demand curve for the product will shift to the left.
B. The firm's demand curve for plastic will shift to the left.
C. The firm will increase the number of units offered for sale.
D. The firm will definitely go out of business, since competitive firms earn zero economic profits in equilibrium.
E. The firm's marginal costs will increase at each level of output.

Answers

Answer:

B

Explanation:

Option (e), which states that the firm's marginal costs will rise at each output level, is the right choice.

Does the marginal cost of a production increase?

The marginal cost of production often increases as output volume increases. The manufacturer can decide how to divide resources among the production units in order to maximize output by using marginal cost.

What occurs when a company's marginal cost increases?

They make the unit and supply it if the sale price exceeds the marginal cost. It would not be economically feasible to make it if the marginal cost was higher than the price. Therefore, manufacturing will continue until the sale price equals the marginal cost.

Why eventually does marginal cost increase with output?

As output grows, the marginal cost eventually rises as a result of the declining marginal product of labor.

When output declines, what happens to the marginal cost?

At this point, marginal cost decreases until it reaches a minimum due to economies of scale and the Law of Diminishing Returns. The marginal cost then grows as output rises.

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Marketers can use to link the virtual world of online social networking with the
physical world of retail stores.

Answers

Gamification links the virtual world of online social networking with the physical world of retail stores and other locations.

Sally received $78,300 of compensation from her employer and she received $540 of interest from a corporate bond. What is the amount of Sally's gross income from these items?

Answers

Answer: The amount of sally's gross income from these items is $78,300

Explanation:

Information provided from the question;

Amount received from employer as compensation = $78,300

Amount received as interest from a corporate bond = $540

Gross income is defined as the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. However, the interest income earned from municipal bonds is exempted from all federal income taxes regardless of one's tax bracket. Therefore, the amount of Sally's gross income from these items is $78,300

The C&C Candy Company uses machine hours to allocate manufacturing overhead. The company estimates $150,000 worth of manufacturing overhead and 3,000 machine hours. The batch ticket for Batch 127 reveals the following information:

3,000 oz of chocolate at 50 cents per ounce
400 hours of direct labor at $15 per hour
180 machine hours 82,500 candy bars produced Batch Completed July 16, 2019.

Determine the cost of one bar.

Answers

Answer:

$0.20

Explanation:

Predetermined overhead rate = Estimated manufacturing overhead / Machine hours = 150000/3000 = 50

Applied overhead = Machine hours worked * Predetermined overhead rate = 180 * $50 = 9000

Direct material                       $1,500 (3,000*0.50)

Direct labor                            $6,000 (400 hours*$15)    

Manufacturing overhead $9000

Total cost                                $16,500

Number of units = 82500 candy bars

So, the Unit cost = Total cost / Number of units = $16,500/82,500 units = 0.20

So, the cost of one bar is $0.20

Financial managers use data prepared by accountants to develop strategies for improving the financial performance of the firm.

a. True
b. False

Answers

Answer:

A

Explanation:

At the beginning of the year, Vendors, Inc., had owners' equity of $49,850. During the year, net income was $6,150 and the company paid dividends of $4,250. The company also repurchased $8,350 in equity. What was the cash flow to stockholders for the year

Answers

Answer: $12,600

Explanation:

Based on the information that have been given in the question, the cash flow to stockholders for the year would be calculated as:

= Dividends Paid - (Ending Common Stock - Beginning Common Stock)

= $4250 - {[$49850 - $8350] - $49850}

= $4250 - [$41500 - $49850]

= $4250 - (-$8350)

= $4250 + $8350

= $12,600

Wanda Company produces its finished product in two processing departments--Mixingand Finishing. The following information is available for the month of March:

Mixing Department:
The beginning work in process inventory was $17,130 ($14,880 direct materials and $2,250 converion costs) and consisted of 1.200 units.
During March, an additional 10.600 units were started into production. A total of 10.900 units were completed and transferred out to the Finishing Department.
The ending work in process inventory consisted of 900 units which were 80% complete as to conversion costs.
The following costs were incurred during March: direct materials $132,620; direct labor $140, 000; and overhead costs $101,770.
Direct materials are added at the beginning of the process in the Mixing Department and conversion costs are incurred evenly throughout the process.

Finishing Department:
The beginning work in process inventory was $57,210 ($44,250 transferred-in costs and $12,960 conversion costs) and consisted of 600 units.
During March, a total of 11.000 units were completed and transferred out to Finished Goods Inventory.
The ending work in process inventory consisted of 500 units which were 40% complete as to conversion costs.
The following costs were incurred during March: direct materials $143,000; direct labor $250, 000; and overhead costs $149.200.
Direct materials are added at the end of the process in the Finishing Department and conversion costs are incurred evenly throughout the production process.

Required:
a. Prepare a production report for March for the Mixing Department.
b. Give the general journal entry to record the transfer of the completed units from the Mixing Department to the Finishing Department for March.
c. Prepare a production report for March for the Finishing Department.
d. Give the general journal entry to record the completion of the units in the Finishing Department for March.
e. Draw the Work-in-Process Inventory T-accounts for the Mixing Department and the Finishing Department and enter the appropriate cost flow account data.
f. Why is computing cost of goods sold problematic in a process costing environment?

Answers

Answer:

Part a

Production report for March for the Mixing Department

                                                             Units                    Costs

Input

Opening Inventory                             1.200                   $17,130

Started during the period                10.600               $374,390

Total                                                   11.800                $391,520

Output

Completed and transferred            10.900                 $365,150

Ending Work In Process                      900                   $26,370

Total                                                   11.800                $391,520

Part b

Debit : Work in Process - Finishing Department $365,150

Credit : Work in Process - Finishing Department $365,150

Part c

Production report for March for the Finishing Department

                                                           Units                     Costs

Input

Transferred                                        10.900              $365,150

Opening Inventory                                 600                $57,210

Started during the period                          0              $542,200

Total                                                    11.500              $964,560

Output

Completed and transferred               11.000             $933,130

Ending Work In Process                        500                $31,375

Total                                                    11.500             $964,560

Part d

Debit : Finished Goods Inventory $933,130

Credit : Work In Process - Finishing Department  $933,130

Part e

Work-in-Process Inventory T-accounts for the Mixing Department

                                                           Units                     Costs

Debit

Opening Inventory                             1.200                   $17,130

Cost incurred                                    10.600               $374,390

Total                                                   11.800                $391,520

Credit

Completed and transferred            10.900                 $365,150

Ending Work In Process                      900                   $26,370

Total                                                   11.800                $391,520

Work-in-Process Inventory T-accounts for the Finishing Department

                                                             Units                     Costs

Debit :

Transferred                                        10.900              $365,150

Opening Inventory                                 600                $57,210

Started during the period                          0              $542,200

Total                                                    11.500              $964,560

Credit :

Completed and transferred               11.000             $933,130

Ending Work In Process                        500                $31,375

Total                                                    11.500             $964,560

Part f

Cost of Goods Sold is a direct cost related to sale of goods. In process costing it is difficult to accurately value this amount since it contains the average cost. this means that units never sold would have been included in the calculation of the cost of goods sold.

Explanation:

It is important to first calculate the equivalent cost unit in each department to be able to solve the question. Calculations of equivalent units are shown below :

Mixing Department

Equivalent Units :

Conversion costs = 900 x 80% + 10,900 = 11,620

Material costs = 900 + 10,900 = 11,800

Equivalent Units Costs

Conversion = ($2,250 + $140,000 + $101, 770) ÷ 11,620 = $21.00

Material costs = ($14,880 + $132,600) ÷ 11,800 = $12.50

Finishing Department

Equivalent Units :

Process 1 = 11.000 + 500  = 11.500

Conversion costs = 500 x 40% + 11.000 = 11,200

Material costs = 11.000 + 500  = 11.500

Equivalent Units Costs

Process 1 = ($44,250 +  $365,150) ÷ 11.500 = $35.60

Conversion = ($12,960 + $250,000 + $149,200) ÷ 11,200 = $36.80

Material costs = ($0 + $143,000) ÷ 11,500 = $12.43

How are bonds a safer investment than stock?

A. Bonds are safer because they are loans with a guaranteed interest rate for return

B. Bonds are sager because they are paid with with taxes

C bonds are safer because they are paid by the stock market

D bonds are safer cause they qre assets with gauranteed return from the government


Can be mutiple answers​

Answers

Answer: D and B

Explanation:

The stock market is where you invest where you want to and hope the money will grow bigger by the company growing bigger. Bonds are you paying a certain amount of money and the government will pay back a little back at a time so if the government doesn't pay which is very unlikely is the reason why bonds are safer.

The following data is from Netflicks Company for 2020.
Sales revenue $96,000
Beginning inventory 12,800
Purchases 64,000
For each separate case a through e, estimate ending inventory.
a. Markup is 50% on cost. ?
b. Markup is 60% on sales. ?
c. Markup is 25% on cost. ?
d. Markup is 40% on sales. ?
e. Markup is 60% on cost. ?

Answers

Answer:

a. $12,800

b. $38,400

c. $0

d. $19,200

e. $16,800

Explanation:

Given the following;

Sales revenue $96,000

Beginning inventory $12,800

Purchases $64,000

Recall that

Opening inventory + purchases - sales = closing inventory

Also;

a. If Markup is 50% on cost, let the cost of the items sold be T then

50% * T + T = 96,000

1.5T = 96,000

Divide both side by 1.5

T = $64,000

Hence the closing inventory Y may be derived as

Y = 12800 + 64000 - 64000

Y = $12,800

b. If Markup is 60% on sale, let the cost of the items sold be T then

T = $96,000 - (60% * $96,000)

= $96000 - $57600

= $38400

Ending inventory Y = 12800 + 64000 - 38400

Y = $38,400

c. If Markup is 25% on cost, let the cost of the items sold be T then

25% * T + T = 96,000

1.25T = 96,000

Divide both side by 1.25

T = $76,800

Hence the closing inventory Y may be derived as

Y = 12800 + 64000 - 76800

Y = 0

This means all items were sold.

d. If Markup is 40% on sale, let the cost of the items sold be T then

T = $96,000 - (40% * $96,000)

= $96000 - $38400

= $57600

Ending inventory Y = 12800 + 64000 - 57600

Y = $19,200

e. If Markup is 60% on cost, let the cost of the items sold be T then

60% * T + T = 96,000

1.6T = 96,000

Divide both side by 1.6

T = $60,000

Hence the closing inventory Y may be derived as

Y = 12800 + 64000 - 60,000

Y = $16,800

Use the following items to determine the toata assets ,total liabilities , net worth , total cash inflows and total cash outflows.
Rent for the month $ 650 Monthly take-home salary$ 2,185
Spending for food $ 345 Cash in checking account$ 450
Savings account balance $ 1,890 Balance of educational loan 2,160
Current value of automobile $8,800 Telephone bill paid for month 65
Credit card balance $ 235 Loan payment 80
Auto insurance $ 230 Household possessions 3,400
Video equipment $ 2,350 Payment for electricity 90
Lunches/parking at work $ 180 Donations 160
Personal computer $ 1,200 Value of stock investment 860
Clothing purchase $ 110 Restaurant spending 130

Answers

Answer:

Determining the total assets, total liabilities, net worth, total cash inflows, and total cash outflows:

1. Total assets

Cash in checking account         $ 450

Savings account balance        $ 1,890  

Current value of automobile  $8,800  

Household possessions           3,400

Video equipment                  $ 2,350

Personal computer               $ 1,200

Value of stock investment        860

Total assets                         $18,950

2. Total liabilities

Rent for the month              $ 650

Balance of educational loan 2,160

Credit card balance             $ 235

Total liabilities                  $3,045

3. Net worth

Total assets                      $18,950

Total liabilities                   ($3,045)

Net worth                        $15,905

4. Total cash inflows

Monthly take-home salary $ 2,185

5. Total cash outflows

Spending for food                  $ 345

Telephone bill paid for month    65

Loan payment                             80

Auto insurance                     $ 230  

Payment for electricity               90

Lunches/parking at work     $ 180

Donations                                160  

Clothing purchase               $ 110

Restaurant spending             130

Total cash outflows         $1,390

Explanation:

a) Data and Calculations:

Rent for the month $ 650

Monthly take-home salary$ 2,185

Spending for food $ 345

Cash in checking account$ 450

Savings account balance $ 1,890

Balance of educational loan 2,160

Current value of automobile $8,800

Telephone bill paid for month 65

Credit card balance $ 235

Loan payment 80

Auto insurance $ 230

Household possessions 3,400

Video equipment $ 2,350

Payment for electricity 90

Lunches/parking at work $ 180

Donations 160

Personal computer $ 1,200

Value of stock investment 860

Clothing purchase $ 110

Restaurant spending 130

Until 2002 public accounting firms were self-regulated. Beginning in 2002, public accounting firms auditing SEC registrants became subject to the oversight of which entities?

Answers

The correct answer to this open question is the following.

Although there are no options attached, we can say the following.

Until 2002 public accounting firms were self-regulated. Beginning in 2002, public accounting firms auditing SEC registrants became subject to the oversight of the following entity: the Public Company Accounting Oversight Board, also known as PCAOB.

This organization was formed on July 30, 2002, after US Congress passed the Sarbanes-Oxley Act, which became an investor protection Act, generating accountability and transparency when auditing companies after the corruption issues that happened at that time.  

US Security and Exchange Commission oversees and has to approve any actions and changes of PCAOB when auditing companies or broker-dealers to present accurate, clear, and transparent reports.  

Wages have risen in Europe since the 1970s and workers work substantially less than they did 40 years ago. Does this suggest that income effects or substitution effects dominate?

a. Income effect
b. Substitution effect

Answers

Answer:

The correct answer is A. Income effect .

Explanation:

In consumer theory, the income effect is the change in consumption that is due to a change in the consumer's real income, that is, his or her purchasing power. Thus, the fact that wages have increased notably, while working time has been reduced during the same period of time, is a clear sign that the working hour of each man within the productive circuit has today in day a purchasing power much higher than what it had in the past.

'Structural unemployment arises from longer term changes in
the demand for and supply of labour in specific industries?

Select one:
True
False

= False ​

Answers

Answer:

It’s False

Explanation:

The number of levels and managers
an organization has is determined
by_____
= Formalization

Answers

Explanation:

it is called Formalization

hahahahahahahahaha

Making money is always on the agenda of the media.

True
False

Answers

It say true lol. The media is corrupt and selfish

There are four resources and four jobs to be done. Assume there must be one-to-one matching between jobs and resources. The time required for each resource to do each job is as follows:
Job (Hours)
Resource A B C D
1 5 8 7 7
2 4 9 5 9
3 6 9 8 7
4 7 6 6 9
What is the optimal assignment of resources to jobs?
Multiple Choice
1 to A; 2 to C; 3 to B; 4 to D
1 to B; 2 to D; 3 to C; 4 to A
1 to C; 2 to B; 3 to A; 4 to D
1 to D; 2 to B; 3 to C; 4 to A
1 to A; 2 to C; 3 to D; 4 to B

Answers

Answer:

1 → A ; 2 → C ; 3 → D ; 4 → B

Explanation:

From the given information, the table can be better structured as follows:

                       Job (Hours)

Resource               A                B               C                  D

1                              5                8                7                   7

2                             4                9                5                   9

3                             6                9                8                   7

4                             7                 6                6                   9

From the table, the allocation of resources is based on the minimum number of jobs i.e. time(hours) required to do all four tasks appropriately.

These are 1 → A ; 2 → C ; 3 → D ; 4 → B

Then, the time taken by this process is = (5 + 5 + 7 + 6)

= 23 hours

Paragraphs in a business email should be 20 to 40 words long. True False

Answers

The answer would be false

Which option identifies the concept represented in the following scenario? Winn-Dixie has acquired the nine Gooding's grocery stores in Florida.
- vertical consolidation
- horizontal consolidation
- oligopolistic consolidation
- monopolistic consolidation​

Answers

Answer:

oligopolistic consolidation

Answer:

maybe vertical

Explanation:

What is the relationship of
Stores function and other
departments​

Answers

Answer:

Explanation:

The store function has the responsibility for the receipt custody and distribution of stocks and for the determination of appropriate quantities and qualities of material to be held since order that operational needs, may be in an economic possible therefore, store management can become an important tool. Therefore,every department in a store is supposed to work together to get sales. Managers of each department should work together to ensure each department is staffed and there is enough products.

If you found my answer useful then please mark me brainliest....

When drafting an end-of-year summary report to her supervisor about the status and sales of the restaurant's newest pizza, Diane omits details about negative customer feedback. By only reporting positive feedback, which barrier of effective communication is she using?
A) deceptive tactics
B) perceptual differences
C) distractions
D) information overload​

Answers

A) Deceptive tactics

Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million on January 1, 2018. The bonds mature on December 31, 2032 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method.

Required:
a. Determine the price of the bonds at January 1, 2018.
b. Prepare the journal entry to record their issuance by Universal Foods on January 1, 2018, interest on June 30, 2018 and interest on December 31, 2025.

Answers

Answer:

Price of bond issued = $20,305,000 + $115,403,700 = $135,708,700

Explanation:

January 1 2018 ,

Investment in Bond issued by Universal Food (Dr.) $155,000,000

Discount on investment in Bonds issued by Universal Foods (Cr.) $19,291,300

Cash (Cr.) $135,708,700

June 30, 2018,

Cash (Dr.) $9,300,000

Discount in Investment in Bonds by Universal Foods (Dr.) $643,043

Interest Revenue (Cr.) $9,943,043

Dec 31, 2025,

Cash (Dr.) $9,300,000

Discount in Investment in Bonds by Universal Foods (Dr.) $643,043

Interest Revenue (Cr.) $9,943,043

Comment with your agreement or disagreement (and why) on the following quote; include in your answer a discussion of what the CEO’s role should be in setting ethical standards and in enforcing ethical behavior: ""Value statements serve as a cornerstone for culture building; a code of ethics serves as a cornerstone for developing a corporate conscience.""

Answers

Answer:

agreed

Explanation:

In simple words, the modern business environment is such that an unethical firm will not survive for long in the market. Thus, it is mandatory for firms to be ethical in every way. A CEO of a company represents the company and can considerations the face of the entity, thus, his or her authority obliges him or her to act and make others act in an ethical manner.

The value statements and code of ethics should be considered as must for the operative activities as it serves as a code of conduct for followers.

Which of the following statements accurately describe the phases of a business cycle?
A. A contraction phase is when an economy exhibits decreasing levels of production and consumption.
B. A period of expansion is when an economy exhibits decreasing levels of production and spending.
C. A trough occurs at the end of the contraction phase and the beginning of the expansion phase
D. A peak level of business activity occurs at the end of the expansion phase and the beginning of the contraction phase.

Answers

Answer:

Option A

Explanation:

In simple words,  contraction relates to a period of the market cycle throughout which the market is in recession as a group When the economic cycle rises, a recession usually occurs, just before it reaches a trough. A contraction is triggered by three kinds of occurrences. We are talking of a sharp spike in borrowing rates a banking crash, or uncontrolled inflation . Paranoia and anxiety replace assurance.

In the current year, Wilson Enterprises, a calendar year taxpayer, suffers a casualty loss of $90,000. The casualty was attributable to a Federally declared disaster. How much of the casualty loss will be deductible by Wilson under the following circumstances?

Required:
a. Wilson is an individual proprietor and has AGI of $225,000. The casualty loss was a personal loss, and the insurance recovered was $50,000 before any limitations. Wilson can claim a casualty loss as an itemized deduction of $_________
b. Assume Wilson is a C corporation, and the insurance recovered was $50,000 before any limitations Wilson can deduct $________

Answers

Answer:

Items                                                      Amount

a. Loss                                                    90000

Less: Insurance Recovery                     50000

Loss after Insurance reimbursement   40000

Less : Single event Deduction              100    

Loss after $ 100 rule                              39900

Less: 10%*225000(AGI)                         22500

Casualty loss deduction                        $17,400

So, the casualty loss deductible by Wilson = $17,400

b. Wilson is a corporation, and the insurance recovered was $50,000. As the casualty loss is a personal loss, no deduction is available to Wilson Corporation . So,casualty loss deductible by Wilson = $0.

Why might Gross Domestic Product not be the most accurate measure of an economy's health? (Explain at least 3 reasons)

Answers

Answer: See explanation

Explanation:

The gross domestic product is the value of an economy's final goods which the economy produces. The reasons why Domestic Product may not be the most accurate measure of an economy's health include:

• It doesn't take into account the value of the works of housewives, volunteers etc.

• The gross domestic product doesn't measure the quality of education that is offered, the children's health, happiness etc.

• GDP takes into consideration the market prices and therefore, activities that are outside the market are left out and not measured.

The Institute of Management Accountants' Statement of Ethical Professional Practice for management accountants includes the elements of:
A. Competence, confidentiality, independence, and objectivity.
B. Competence, confidentiality, integrity, and credibility.
C. Competence, accuracy, integrity, and independence.
D. Competence, confidentiality, integrity, and relevance.

Answers

Answer: competence, confidentiality, integrity, and credibility.

Explanation:

The Institute of Management Accountants' Statement of Ethical Professional Practice for management accountants reflects on the globalization of the accounting profession. The statement is based on ethical principles such as responsibility, fairness, integrity and honesty.

Also, the statement consist of elements such as competence, confidentiality, integrity, and credibility.

6
Marginal Cost of producing Pies
$1.60
$1.40
$1.20
$1.00
Marginal Cost
SO 80
$0.60
$0.40
$0.20
$0.00
O Pies
1 Pies
5 Pies
6 Pies
2 Pies 3 Pies 4 Pies
Quantity Supplied
According to the graph, the marginal cost begins to increase when the producer makes
0
two pies.
three pies
O four pies.
O five pies
Save and Exit
Next
Mark this and return
Submit

Answers

Answer: Four pies.

Explanation:

Marginal cost is the additional cost of producing one extra unit of a good or service.

From this graph we see the marginal cost rise when the first pie is produced and then it subsequently decreases as the second and third pie is produced which is where it reaches its lowest point.

From the fourth pie, the marginal cost begins to rise again which means the marginal cost begins to increase when the producer makes four pies.

Assume the economy of Ucheland is currently at full employment. The government of Ucheland reduces the tax rate on household interest earnings.

a. What will happen to private savings in Ucheland?
b. Draw a correctly labeled graph of the loanable funds market, and show the effect of the change in private savings identified in part (a) on the equilibrium real interest rate.

Answers

Answer:

a) since the tax rate oh household interest earnings increases, the number of households that will save money will increase, and the households that were already saving money might increase the amount saved. As a result, private savings will increase in Ucheland.

b) see attached image

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