6. You are given the following data concerning Freedonia, a legendary country: Consumption function: C = 200 + 0.8Y
Investment function: I = 100

a. What is the marginal propensity to consume in Freedonia, and what is the marginal
propensity to save?
b. Graph equations (3) and (4) and solve for equilibrium income.
c. Suppose equation (2) is changed to (2´) I = 110. What is the new equilibrium level of
income? By how much does the $10 increase in planned investment change equilibrium
income? What is the value of the multiplier?
d. Calculate the saving function for Freedonia. Plot this saving function on a graph with
equation (2). Explain why the equilibrium income in this graph must be the same as in
part b.

7.
a) Assume that the multiplier in a country is equal to 4 and that autonomous real consumption
spending is $1 trillion. If current real GDP is $15 trillion, what is the current value of real
consumption spending?
b) An economy has a fixed price level, no imports, and no income taxes. An increase in
autonomous expenditure of $2 trillion increases equilibrium expenditure by $8 trillion. Calculate
the multiplier and the marginal propensity to consume.

On january 1, 2018, red flash photography had the following balances: cash, $19,000; supplies, $8,700; land, $67,000; deferred revenue, $5,700; common stock $57,000; and retained earnings, $32,000. during 2018, the company had the following transactions: 1. february 15 issue additional shares of common stock, $27,000. 2. may 20 provide services to customers for cash, $42,000, and on account, $37,000. 3. august 31 pay salaries to employees for work in 2018, $30,000. 4. october 1 purchase rental space for one year, $19,000. 5. november 17 purchase supplies on account, $29,000. 6. december 30 pay dividends, $2,700. the following information is available on december 31, 2018: 1. employees are owed an additional $4,700 in salaries. 2. three months of the rental space has expired. 3. supplies of $5,700 remain on hand. 4. all of the services associated with the beginning deferred revenue have been performed.required: 1. record the transactions that occurred during the year.2. record the adjusting entries at the end of the year.3. prepare an adjusted trial balance.4. prepare an income statement, statement of stockholders’ equity, and classified balance sheet.5. prepare closing entries.

Southeastern bell stocks a certain switch connector at its central warehouse for supplying field service offices. the yearly demand for these connectors is 15,000 units. southeastern estimates its annual holding cost for this item to be $25 per unit. the cost to place and process an order from the supplier is $75. the company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days.a) find the economic order quantity.b) find the annual holding costs.c) find the annual ordering costs.d) what is the reorder point?

Match the different financial task to their corresponding financial life cycle phases