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Economic Growth

Financial Economics

1. The dividends of Charles Schwab Co. are expected to grow indefinitely by 5% per year. a. If this year's year-end dividend is $8 and the firm's required rate of return is 10% per year, what must the current stock price be according to the DDM? b. If the expected earnings per share are $12, what is the implied value of the

present value of growth opportunities

1. The market consensus is that Analog Electronic Corporation has an ROE = 12%, a beta of 1.25, and it plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $3 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 14% and T-bills cu

Thus, it appears that the high Mexican interest rates do not attract substantial U.S. investment in Mexico's securities. Why do you think U.S. investors do not try to capitalize on the high interest rates in Mexico?

High interest rates are commonly expected to strengthen a country's currency because they can encourage foreign investment in securities in that country, which results in the exchange of other currencies for that currency. Yet, the peso's value has declined against the dollar over most years even though Mexican interest rates ar

Economics for Decision-Making

Based on the income statement attached (look at the price-to-earnings ratio) do you think it(your company) looks undervalued? Could that perception change if the economic climate changes? Do you believe your company's valuation is being impacted today if let's say, your company was only a regional player? What is the basis for y

Climate of importing into Indonesia

Marketing managers feel it is first important to get an idea of the climate in the country towards foreign trade and investment. Analyze Indonesia's trade policies as to how they promote and/or restrict international trade. Determine whether these policies include any of the following: Subsidies Export financing Foreign

Loss of Jobs

What are some of the causes for a loss of jobs in the U.S.?

Population Growth models and Economic Growth

Explain why population growth has such a negative impact on economic growth in the Malthusian and Neoclassical growth models. Explain why population growth can have positive effects on economic growth in more recent models. Which theory does the evidence support?

Exploitation

What marketing, pricing, distribution or other competitive advantages can firms exploit (use concept of zero sum, positive sum, and negative sum games, and dominant market participants)? What limits or constraints are on these firms?

Macroeconomic Concepts - True and Fales & Multiple Choice

True/False Supply is not a consideration for short term analysis. Inflation includes increases and decreases in prices. A recession is defined as at least four consecutive declines in real growth. GDP includes the money paid to the neighbor's child to mow our lawn. Wealth is a stock concept. The underground economy

Q ratio

1. Explain how any intangible capital effects of R&D intensity can reflect the effects of market power and/or superior efficiency. 2. A multiple regression analysis based upon the data contained in Table 12.3 revealed the following (t statistics in parentheses): q = 1.825 + 7.358 profit margin + 0.0220 growth - (3.7

Economic Policy, Investments, & Monetary Changes

International Investments 1. An example of direct foreign investment is given by: a. The sale of U.S. government bonds to foreigners. b. The sale of U.S. stocks (equities) to foreigners. c. A multinational corporation such as Ford, builds production facilities in Mexico. d. All of the above. 2. The foreign exchange ma

Intermediate Economics

Please explain why after such unprecedented economic growth, technical advance, and expansion of the size and scope of government since the 1930's do economies still experience economic cycles and stagnation.

International Trade

1. "A rise in the dollar price of yen necessarily means a fall in the yen price of dollars." Do you agree? Illustrate and elaborate: "The critical thing about exchange rates is that they provide a direct link between the prices of goods and services produced in all trading nations of the world." Explain the purchasing-power-

International Econ - The Euro and Policy

1. Terms of trade refers to? a. What goods are imported b. What goods are exported c. The volume of trade. d. The prices at which trade occurs. 2. The use of real GDP rather than nominal GDP allows us to? a. Measure the value of output in a given year at constant prices that have been adjusted for changes in inflat

Macroeconomic Questions

1. The time spent on job search rises when: a. unemployment compensation decreases b. unemployment compensation increases c. the efficiency wage rate is lowered d. more young people enter the labor force. 2. The productivity curve: a. has a positive slope b. has a negative slope

Basic Trade Model for International Economics

See attached file for full problem description. You can get information from the class homepage: http://www.stanford.edu/~rstaiger/Economics.165.htm Please solve the problem Consider two large countries, A and B. A imports good x and exports good y, while B imports good y and exports good x. (a) Using the Basic Tr

Tariffs and International Trade notes

1. "The United States can produce X more efficiently than can Great Britain. Yet we import X from Great Britain." Explain 2.Evaluate the following statements: a. The extensive application of protective tariffs destroys the ability of the international market system to allocate resources efficiently. b. In view of th

Intermediate Economics

Here is the problems: 1. Does the structure of the global economy allow poor countries to catch up with rich ones? Is the Solow model a useful framework for understanding whether poor countries tend to catch up with rich ones? How do Sachs and Rodrik differ regarding the policies that are most likely to promote catching up

Macroeconomic Theory

1. Suppose that an earthquake destroys part of the capital stock. Predict what will happen to (1) total production, (2) the real return to capital, and (3) the real wage. For simplicity, assume that the size of the population is unaffected. 2. Assume that GDP is 5000. Consumption is Investment is where is the real

Housing and GDP

New federal housing data shows that the nation's most overheated local housing markets make up such a large share of the total US market that a sharp fall in their value could stall or slow economic growth. If worst case is true, and a sharp fall in real estate values leads to a decline in GDP, assess: 1. how this situation w

Income

1. What factors have contributed to increased income inequality since 1969? 2. Should a nation's income be distributed to its members according to their contributions to the production of that total income or according to the member's needs? Should society attempt to equalize income or economic opportunities? Are the i

Intermediate Macroeconomics

1. Two economies, Hare and Tortoise, each start with a real GDP per person of $5000 in 1950. Real GDP per person grows 3% per year in Hare and 1% per year in Tortoise. In the year 2000, what will be real GDP per person in each economy? Make a guess first; then use a calculator to get the answer. 2. Over the past twenty y

Printing Company Analysis

Printing company 1. How does your organization go about estimating its sales? How does it estimate the demand for new products so that it can prepare a production run? 2. Which is more important for your organization: a. Lower cost, quality, customer expectations, or b. Some other feature? Why? 3. Is the market system t

Investing Questions

A. In order for you to be indifferent between the after tax returns on a corporate bond paying 8.5% and a tax-exempt municipal bond paying 6.12%, what would your tax bracket need to be? b. What is the bond equivalent yield of a T-Bill that is selling for $9,453 and has 173 days remaining until maturity? 2) You purchased 10

How the reserve requirement affects economic growth.

Banks fail when all depositors try to withdraw money at the same time. One way to prevent this problem would be to require banks to hold 100% of deposits on hand. Why would this not be a desirable thing to do? What would happen to the banking system? What would you expect to see happen to the cost of a checking account if banks

What are the four stages of the Business Cycle?

2) What are the four stages of the Business Cycle? Compare and Contrast five internal and external Business Cycle theories. Prepare a diagram showing how the movement in any combination of the components of GDP (Gross Domestic Product) can lead to business cycles. What is the relationship between and among the U.S. nat