As the marginal propensity to consume (MPC) increases, the multiplier increases. decreases. remains the same. As the marginal propensity to save (MPS) increases, the multiplier decreases. remains the same. increases. If the marginal propensity to consume is 0.40 , what is the multiplier, assuming there are no taxes or imports

Answer: 1. Increases

2. Decreases

3. 1.67

Explanation:

The formula for the Investment Multiplier is,

= 1/ ( 1 - MPC)

From this formula, inferences can therefore be made.

1. As the marginal propensity to consume (MPC) increases, the Multiplier INCREASES.

As the MPC increases, it will reduce the denominator therefore increasing the Multiplier.

2. As the marginal propensity to save (MPS) increases, the multiplier DECREASES.

The Marginal Propensity to Save is ( 1 - MPC) because what isn't consumed is saved.

The MPS is therefore the denominator of the Multiplier equation.

That means then that as it rises, the Multiplier Decreases.

3. The Formula for the Investment Multiplier is, = 1 / ( 1 - MPC)

= 1 / ( 1 - 0.40)

= 1.67

7. A generous benefactor pledges $1 million to The Smith Foundation, a NPO that promotes the arts. The gift is to be used to provide scholarships for talented musicians at a music camp operated by the Foundation. The gift was given in August 2006 to support the Summer 2007 music program. The Foundation Director argues that the gift is a conditional restricted gift and therefore cannot be recognized as revenue in 2006. The accountant argues that the gift is an unconditional restricted gift and must be recognized in the current year. What is the basis for the Director’s argument? What is the basis for the accountant’s argument? In your answer provide an explanation of the terms conditional, unconditional, restricted and unrestricted.

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Whitmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.07 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 4,200 units in February and 4,700 units in March. Required: Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round "labor-hours per unit"

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Zoum Corporation had the following transactions during the year: Issued $250,000 of par value common stock for cash. Recorded and paid wages expense of $120,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $20,000. Sold a long-term investment (cost $8,000) for cash of $6,000. Recorded cash sales of $800,000. Bought inventory for cash of $320,000. Acquired an investment in Zynga stock for cash of $42,000. Converted bonds payable to common stock in the amount of $1,000,000. Repaid a 6-year note payable in the amount of $440,000. What is the net cash provided by financing activities?

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Direct materials information Medium speed bump Large speed bump

Standard pounds per unit 15 ?

Standard price per pound $1.00 $1.80

Actual quantity purchased and used per unit ? 16

Actual price paid for material per pound $1.80 $2.10

Direct materials price variance $1,120 U $1,920 U

Direct materials quantity variance $100 F ?

Total direct material variance ? $480 U

Number of units produced 100 400


Calculate missing direct material variables

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a. 2.25 Years.
b. 2.5 Years.
c. 2.75 Years.
d. 3 Years.
e. 3.2 Years.

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A financier plans to invest up to $500,000 in two projects. Project A yields a return of 9% on the investment of x dollars, whereas Project B yields a return of 17% on the investment of y dollars. Because the investment in Project B is riskier than the investment in Project A, she has decided that the investment in Project B should not exceed 40% of the total investment. How much should the financier invest in each project in order to maximize the return on her investment

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Select the correct answer from each drop-down menu,
Jack has to pay
tax to the government for his house. This type of tax is
tax

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