Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. also assume that the economy’s multiplier is 3.
a. if household wealth falls by 4 percent because of declining house values, and the real interest rate falls by 2 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level?

Individual consumers belong to which step of choosing a target market? possible customers competition demographics communication

On january 2, well co. purchased 10% of rea, inc.’s outstanding common shares for $400,000, which equaled the carrying amount and the fair value of the interest purchased in rea’s net assets. well did not elect the fair value option. because well is the largest single shareholder in rea, and well’s officers are a majority on rea’s board of directors, well exercises significant influence over rea. rea reported net income of $500,000 for the year and paid dividends of $150,000. in its december 31 balance sheet, what amount should well report as investment in rea?

Why is efficiency an important economic goal?