The economy is in the horizontal portion of the AS curve, there is a liquidity trap, and investment spending is sensitive to changes in the interest rate. According to the Keynesian transmission mechanism, if the money supply increases the interest rate , investment spending , the AD curve and the price level . Question 8 options:

Xinhong company is considering replacing one of its manufacturing machines. the machine has a book value of $39,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. it has a current market value of $49,000. variable manufacturing costs are $33,300 per year for this machine. information on two alternative replacement machines follows. alternative a alternative b cost $ 115,000 $ 117,000 variable manufacturing costs per year 22,900 10,100 1. calculate the total change in net income if alternative a and b is adopted. 2. should xinhong keep or replace its manufacturing machine