Norder to financially stimulate the nation, the federal government injected $900 billion dollars into the economy. however, the results were less than spectacular. one reason could have been a failure to understand the marginal propensity to consume. assume the marginal propensity to consume (mpc) was only 0.4. how much of that $900 billion went to increased consumption? where did the rest of the money go?

increased consumption:

where did the rest go?

using mpc = 0.4, what is the spending multiplier (the actual numerical value ):



what was the implied change in income as a result of the stimulus package?

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar. spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements. cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery. rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer. gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life. esquire company provides financial statements to external users every three years.