Question 4: Please define the oversimplified multiplier and use your knowledge of the concept to answer the following question. Suppose that GDP is currently $25,000 and the marginal propensity to consume is.50. If autonomous investment increases by $5,000, what will GDP be in the new equilibrium? Assume the oversimplified multiplier is accurate.
Any change in a component of aggregate demand will result in a larger change in equilibrium GDP, called the oversimplified multiplier. The equation would be: 1/1-.50=2.
This means that the oversimplified multiplier is 2, so instead of an increase of $25,000+5,000=30,000, the GDP will be $30,000, as the extra...
Honda Corporate Jet Department Departmental Analysis: Honda Corporate Jet Department Background of Honda Aviation Department The department of Honda Jet bears its beginnings in Honda Aviation. The journey to the aviation industry began when engineer Michimasa Fujino, initiated the vision in 1986 of Honda's participation in research and development in advanced airborne Honda (Honda, 2012). Close to four decades later, the vision is almost a realization as Honda Jet is now in its
Honda-Current Brand Strategy Honda has taken numerous actions to achieve new growth as it moves towards the fast changing era in the world. Its re-branding campaign is a progressive initiative, which has increasingly gained momentum over the years. This paper will focus on Honda's re-branding and brand equity strategies as reviewed in case studies and scholarly writings. Honda has maintained to be the most successful automotive import company in Japan. According
Honda case, Honda simultaneously developing hybrids, diesel, natural gas, fuel cell cars. a. Why Honda chosen strategy? Is characteristic company industry? Should Honda pick focus efforts important Honda pursue synergies ( preserve options) developing promoting multiple technologies? b. Honda Motor Company Ltd. The diversification strategy and the environmentally friendly automobile Honda is a long established and powerful presence within the international automobile industry. Throughout the past recent years, the company has become focused
Honda Case Study Honda Motors the iconic Japanese automobile and engine manufacturer was the definitive example of the 1980's and early 90's surge of Japanese dynamism and economic muscle. "Only 25 years after the firm entered the automobile industry, the 'industry of industries', Honda had become one of the world's top ten producers" (Mair, A. 1997). Over the last two decades though Japan has been mired in a morass of economic
Until very recently, GM was not being publicly traded; after its bailout by the U.S. government, the company was required to pay down its debt and essentially purchase itself back from the taxpayers before issuing stock. This stock has now been issued, and the debt was very recently paid off, giving the company a current debt/equity ratio of .36 (GM 2011). This means that the company is primarily being
Major markets are saturated with products. Because of high fixed costs in the industry, exit barriers are high. Competition has kept margins relatively low, so Honda must move volume since they do not have sufficient differentiation to leave the mass market category. Overall, the outlook for the automotive industry is weak for the coming years. One environmental consideration however is with respect to higher fuel costs. While this represents a
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now