The u. s. economy slowed significantly in early 2008, and policy makers were extremely concerned about growth. to boost the economy, congress passed several relief packages (the economic stimulus act of 2008 and the american recovery and reinvestment act of 2009) that combined would deliver about $700 billion in government spending. assume, for the sake of argument, that this spending was in the form of payments made directly to consumers. the objective was to boost the economy by increasing the disposable income of american consumers.
calculate the initial change in aggregate consumer spending as a consequence of this policy measure if the marginal propensity to consume (mpc) in the united states is 0.5. then calculate the resulting change in real gdp arising from the $700 billion in payments.

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The production manager of rordan corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st quarter 2nd quarter 3rd quarter 4th quarter units to be produced 10,800 8,500 7,100 11,200 each unit requires 0.25 direct labor-hours, and direct laborers are paid $20.00 per hour. required: 1. prepare the company’s direct labor budget for the upcoming fiscal year. assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. 2. prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,500 hours of work each quarter. if the number of required direct labor-hours is less than this number, the workers are paid for 2,500 hours anyway. any hours worked in excess of 2,500 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

Lusk corporation produces and sells 14,300 units of product x each month. the selling price of product x is $25 per unit, and variable expenses are $19 per unit. a study has been made concerning whether product x should be discontinued. the study shows that $72,000 of the $102,000 in monthly fixed expenses charged to product x would not be avoidable even if the product was discontinued. if product x is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: