Question

Benji charges the tooth fairy 10% interest every night that they are late in exchanging money for his lost tooth. If the price of a lost tooth is initially $1, approximately how many nights would it take for the price of the tooth to rise to $128? 7 nights O 13 nights 14 nights 49 nights It cannot be determined from the information above. Question 4 3 pts A description of the fiscal multiplier effect is when: the government increases government spending initially by $100 billion, and total income in the economy increases by more than $100 billion. an increase in the price level leads to a shift in the aggregate demand curve. the central bank increases the money supply, decreasing interest rates and boosting aggregate demand. an initial deposit at a bank turns into a larger number of deposits collectively worth more than the initial deposit through an iterative process banks loaning out much of the deposits they receive and those loans being redeposited. None of the above.

Answer 1

3. Ans: 49 nights

Explanation:

F = P(1 + i)ⁿ

128 = 1(1 + 0.10)ⁿ

1.10ⁿ = 128 / 1 = 128

Taking ln of both the sides

Ln 1.10ⁿ = Ln 128

n Ln1.10 = Ln 128

n * 0.1 = 4.852

n = 4.852 / 0.1 = 48.52

If round it will be 49.

4. Ans: The government increases government spending initially by $100 billion, and total income in the economy increases by more than $100 billion.

Explanation:

Multiple effect means when one variable (government spending) increases by an amount, the other variable (Income) will increase more than the first variable.