Explain the effects of the following actions on equilibrium income. 1 . Government purchases rise by $20 billion. 2 . Taxes fall by $20 billion. Assume that the marginal propensity to consume is 0.8
1 . $100 billion calculated as: $20 billion /(1 - 0.8)
2 . $80 billion calculated as: (-0.8 ? -$20 billion)/(1 - 0.8)
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At the beginning of the year, Tom's Tubes had a capital stock of 5 tube inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's capital stock at the end of year equals
A) 1 machine. B) 2 machines. C) 3 machines. D) 6 machines.
Facebook sold shares of stock for the first time in an IPO on May 18, 2012. The stock originally sold for $38 per share. As of October 19, 2012, a share of Facebook stock was valued at $19 per share
The decrease in the value of a share of Facebook purchased in May and still owned in October is called A) a capital gain. B) a capital loss. C) gross investment. D) net investment.