1. an economy is initially at full employment, but a decrease in planned investment spending (a component of autonomous expenditure) pushes the economy into recession. assume the mpc of this economy is 0.75 and that the multiplier is 4. a. how large is the recessionary gap after the fall in planned investment? b. by how much would the government have to change its purchases to restore the economy to full employment? c. alternatively, by how much would the government have to change taxes?

Frost corporation incurred the following transactions during its first year of operations. (assume all transactions involve cash.) 1) acquired $1,900 of capital from the owners. 2) purchased $435 of direct raw materials. 3) used $290 of these direct raw materials in the production process. 4) paid production workers $490 cash. 5) paid $290 for manufacturing overhead (applied and actual overhead are the same). 6) started and completed 250 units of inventory. 7) sold 140 units at a price of $6 each. 8) paid $130 for selling and administrative expenses. the amount of raw material inventory on the balance sheet at the end of the accounting period would be: