Please answer the following practice questions clearly and comprehensively. Please include references if applicable. 1. Explain why economists focus on REAL GDP as opposed to NOMINAL GDP in tracking the business cycle? 2. What are the FOUR different types of unemployment? Why should you avoid being structurally unemploye
1. Discuss the conceptual similarities between the government expenditures multiplier and the money multiplier. 2. The yield curve reflects interest rates over different maturities for a given debt instrument, like 10-year treasury bonds, or 3-month treasury bills, as well as private debt. What can you conclude about an upwar
Financial intermediation is the process by which financial institutions transfer funds from ultimate lenders, i.e. savers, to ultimate borrowers, i.e. investors. It is a process that makes the economy operate more efficiently and enhances the ability of the economy to grow. Financial intermediation significantly reduces transa
There are 168 hours in a week. Of these, about 60 hours will go to sleeping (more or less). That leaves 108 hours for which we have a choice in terms of how we will spend that time. Let's assume that we will spend the 108 hours in either work or leisure, or some kind of combination of the two. A. What factors would you consid
Explain the five demand shifters in managerial econimics-consumer income, prices of related goods, advertising and consumer taste, population, and consumer expectations and how they effect market forces.
1. Explain how puts and calls can be used to reduce reisk, speculate, and increase portfolio returns. 3. List a minimum of four fundamental factors to be considered when trying to forecast stock prices. 4. List two advantages of buying a put on a stock instead of selling it (the stock) short. 5. If you expect i
Helpful Tips: Text book: Corporate Finance, 8th edition, Ross. Westerfield. Jaffe Unit 2 Homework Submit answers, as an attachment, to the following questions to Unit 2 Dropbox. All calculations must be shown. For problems that have an Excel template, be sure to download the template from the publisher's web site, and s
Why might M1 and M2 grow at very different rates during a given year?
Your parents are giving you $500 a month for 5 years while you attend college to earn both a bachelor's and a master's degree. At a 7% discount rate, what are these payments worth to you when you first enter college? a) $22,681.13 b) $24,601.18 c) $25,251.00 d) $27,209.17 e) $30,000.00
Use an elasticity concept to explain each of the following observations. a. During economic boom times, the number of new personal care businesses, such as gyms and tanning salons, is proportionately greater than the number of other new business such as grocery stores. b.Cement is the primary building material in Mexico. A
1. What are the two types of fiscal policy and how are aggregate expenditures affected by each policy? 2. Briefly explain how each of the Federal Reserve's Monetary Polciy tools affects teh LM curve. 3. In the short-run what is the policy dilemma when the economy is experiencing stagflation> 4. If a government is co
The money supply is broadly defined to include all the deposits held with the chartered banks and near banks. The deposits with near banks, on average, are equal to 80% of those held with the chartered banks. Currency held by the public to satisfy their day-to-day needs is equal to 10% of total deposits held by the depository
A. From time to time, the city of Chicago provides free concerts. Can this program be rationalized on the basis of welfare economics? Relate the program to the concept of merit goods. b. Some say, "Small corporations should face lower tax rates than large businesses, just as individuals with low incomes should face lower inco
1. Explain how do banks create money? What is money multiplier? 2. American (and world) history is rich with examples of bank crises, often the result of overly expansive loan policies by private banks. As recently as 2007, subprime bank loans (real estate loans made to borrowers with relatively poor credit ratings) have re
What interest rate are you charging your "friend"? If you make your first deposit at the end of this year, and you would like your account to reach $20,000 when the final deposit is made, what will be the amount of your deposits? If the cost of common equity for the firm is 20 percent, the cost of preferred stock is 12 percent, and the before-tax cost of debt is 10 percent, what is Jower's cost of capital? What is the effective annualized cost of forgoing the discount? Calculate the project's NPV.
1. You lend a friend $15,000, for which your friend will repay you $37,313 at the end of five years. What interest rate are you charging your "friend"? 2. You plan to buy some property in Florida five years from today. To do this, you estimate that you will need $20,000 at that time for the purchase. You would like to accu
Please assist with the following homework: 1.Calculate the future value of the following a, $500 invested for 5 yrs at a 5 % interest rate b. $700 invested for 3 years at a 2 % interest rate c. $1200 if invested for 7 years at an 11 % interest rate d. $400 if invested for 10 years with an 0 % interest rate CALCULATE THE
I would like to learn something about GM automotive industry. Could you provide some examples? 1. A brief history of the industry. An industry overview.
Explain the effects of monetary and fiscal policy on economic activity using both IS/LM and AS/AD models. Also explain the difference between the supply side and demand theories.
Please see file attached.
1) Your college has agreed to give you a $10,000 tuition loan. As part of the agreement, you must repay $12,600 at the end of the 3-year period. What interest rate is the college charging? 2) A country's gross domestic product (GDP) is $20 billion and its money supply (MS) is $5 billion. a) What is the country's velocity
See attached file for full problem description. A Company produced and sold 8,000 units of product and is operating at 80% of plant capacity. Unit information about its product is as follows: Sales Price $35 Variable manufacturing cost $16 Fixed manufacturing cost (48,000 / 8,000) 6
1. For each of the following, predict the effects on the equilibrium levels of aggregate output (Y) and the interest rate ( r ): A) During 2005, the Federal Reserve was tightening monetary policy in an attempt to slow the economy. The Congress passed a substantial cut in the individual income tax at the same time. B) D
Finance - The present value of a single sum of $100 to be received in 10 years and discounted at a annual 12% rate on a semi-annual basis. The best way to compare two sums to be received at different times in the future. Factor to use when computing the present value of a series of rent payments.
2. The present value of a single sum of $100 to be received in 10 years and discounted at a annual 12% rate on a semi-annual basis is: a. $32.19 b. $31.18 c. $100 d. $310.58 3. The best way to compare two sums to be received at different times in the future is to compute: a. The present value of each sum. b. The futur
1. If a firm used a combination of inputs that was to the left of the isocost line, it would indicate that A. It is exceeding its budget. B. It is not spending all of its budget. C. It is operating at its optimal point because it is saving money. D. None of the above. 2. The Learning Curve A. Is really no different
1. Assume that in a certain economy the LM curve is given by Y=2000r-2000+2(M/P), and the IS curve is given by Y=8000-2000r+, where is a shock that is equal to 200 half of the time and -200 half of the time. The price level is fixed at P=1 for simplicity. The natural output level is 4000. The government wants to keep outp
Suppose you have invested $50,000 in the following four stocks: Security Amount Invested Beta Stock A $10,000 0.7 Stock B $15,000 1.2 Stock C $12,
1) A building is purchased with a principal amount to pay down of $108000. The payments will be made in 20 EQUAL, end of year (not monthly!) installments. What are the equal installments if the annual interest rate is 10%? 2) Your job pays only once per year on December 31 - you just received your salary of $50,000 and will
1) The time it would take for money to double at a simple interest rate of 10% per year is closest to: A) 5 Years B) 7 Years C) 10 Years D) 12 Years 2) At a compound interest rate of 10% per year, $10,000 one year ago is equivalent to how much 1 year from now? A) $8264 B) $9091 C) $11,000 D) $12,000 3) In most engine
Time Value of Money: Present Value of Annuity, Future Value of Annuity, EAR versus APR, monthly payment for a loan
1) Calculating Annuity Present Value. An investment offers $6,000 per year for 15 years, with the first payment occurring 1 year from now. If the required return is 8 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years? Forever? 2) Calculating Annuity Futur
I need a graph of the production possibilities frontier for the following question: American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, while a Japanese worker can produce 5 tons of grain a year. Assume that each country has 100 million workers.