Suppose the MPC Is

question 248

Multiple Choice

Suppose the MPC is .75.There are no crowding out or investment accelerator effects.If the government increases expenditures by $200 billion how far does aggregate demand shift? If the government decreases taxes by $200 billion how far does aggregate demand shift?

• A)$800 billion and $800 billion
• B)$800 billion and $600 billion
• C)$600 billion and $600 billion
• D)$600 billion and $450 billion

Understand the recording and impact of selling receivables and promissory notes on financial statements.

Grasp the concept of Allowance for Doubtful Accounts and its role in adjusting entries.

Analyze the aging method for estimating uncollectible receivables.

Calculate interest on interest-bearing notes and understand the treatment of dishonored notes.

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Definitions:

Sales Discounts

A reduction in the price of goods or services offered by a seller to encourage prompt payment by the buyer.