Debt Capital Markets

The belief that we can spend our way out of low growth is inconsistent with the best availableempirical evidence and ignores South Africa’s recent poor performance in using governmentspending as a tool to unlock much‐needed economic growth. Gambling with our future on riskyeconomic strategies that have failed elsewhere is something we are not prepared to do.’ TitoMboweni is South Africa's Minister of Finance.   The increased government spending noted in Q.3.1. above has to be financed inone way or another. Describe three ways in which government spending can be financed.

Current debt levels are fiscally unsustainable and, even if they were sustainable, are detrimental to the prospects for development in the indebted countries. The Caribbean cannot achieve rising standards of living for its people in the presence of existing debt service obligations and debt induced economic vulnerability. Intuition and empirical evidence on the relationship between debt and development suggest that, while low levels of debt can be beneficial to developmental outcomes (provided that the borrowed capital is properly used) high levels of debt are obstacles to such outcomes. Source: Caribbean Development Bank, Public Sector Debt in the Caribbean: An Agenda for Reduction and Sustainability Compare the debt situations in two Caribbean countries - Jamaica and Antigua and Barbuda, over the past two decades. A. Discuss and compare the causes of the debt levels in both countries. B. What impact did the debt situation have on the standard of living of the citizens in the…

Which of the following is a true statement? Multiple Choice Economists who support economic growth say that it is the most practical route to the higher standards of living that the vast majority of people desire. Most economists believe that the recent rise in the average rate of productivity growth implies an end to the business cycle. Most economists believe that increases in real GDP actually produce decreases in overall economic well-being because of spillover costs. Mainstream economists disagree as to whether the rate of productivity growth was higher between 1995 and 2012 or between 1973 and 1995.

Please don't use Ai solution

The Harrod - Domar growth model is a simple macroeconomic growth model that states that investment is proportional to change in income:/= 3.5(Y, -Y.,), where I, is the investment at the time - period (in $ million) Y, and Y., are the income at the time - period and -1, respectively (in $ million) 3.5 is the capital - output ratio (constant). The savings at the time-period / depends on the proportional share of income: S = 0.25Y, where S, is the saving at the time - period / ( in $ million) 0.25 is the average saving rate (constant). Investment and savings must be equal in any period so that the equilibrium condition can be written as I = S, Using the assumptions above answer the following questions: (a) Write the equilibrium equation as a difference equation in Y, using the equilibrium condition provided above. (b) Solve the difference equation that you derived in (a), assume that given Y = $9.5 million. (c) Comment on the stability of the system. 0

A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Panama's real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem: Suppose that real GDP per person in Panama in 2017 was about $13,000 per person, while it was about $52,000 per person in the United States. If real GDP per person in Panama grows at the rate of 4 percent per year, about how long will it take Panama's real GDP per person to reach the level that the United States was at in 2017? (Hint. How many times would Panama's 2017 real GDP per person have to double to reach the United States' 2017 real GDP per person?) Instructions: Enter your answer as a whole number. уears

explain whether the given statement is true, false or uncertain. Then provide arguments to justify your selection.    The saving rate (gross domestic saving as a % of GDP) in Singapore, a small open economy, was 48% in 2017 while the investment rate (domestic investment as a % of GDP) was 25%. As a result, there was net outflow of capital from Singapore in 2017.

Discuss the following questions and prepare a final answer : 1.How do you expect COVID-19 to affect Economic Growth:for Canada and for the World in general? 2.Budget Deficit in light of COVID-19: What it means forCanada?

A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 ÷ 7) to double. Apply the rule of 70 to solve the following problem: Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If real GDP per person in Oman grows at the rate of 2 percent per year, about how long will it take Oman's real GDP per person to reach the level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double to reach the United States' 2020 real GDP per person?) years

A couple things that Mexico can do to raise money on the global capital market is to use either debt capital or equity capital. Debt capital usually comes in the form of loans, while equity typically comes in the form of cash in exchange for stock ownership. One of the benefits for using debt is that a large amount of money can be raised without diluting equity. Debt financing usually involves an entity borrowing money from a lender and paying it back at a later date. Raising equity usually occurs when selling shares of stock to investors. The advantage of this method is that Mexico would not have to worry about regular interest payments on debt as well as fluctuation of exchange rates. The only downside is that selling shares of stock would result in the dilution of equity for Mexican firms. I would personally recommend debt financing that way Mexico would not be diluting the equity of their firms, while also being pressured to make sure that firms remain profitable in order to…

A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, If Mexico's real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $12,000 per person, while it was about $48,000 per person in the United States.

(a) Assess the effect of an increase in taxes on savings in a two period inter-temporal model within a perfect competitive capital market

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was launched by Deputy President Phumzile Mlambo-Ngcuka in February 2006. After research and discussion with stakeholders, government identified six “binding constraints on growth” that needed to be addressed so as to progress in its desire for shared growth and to achieve its target of halving unemployment and poverty between 2004 and 2014. This could be achieved if the economy grew at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the period 2010 to 2014.These binding constraints were: deficiencies in government’s capacity the volatility of the currency low levels of investment infrastructure and infrastructure services shortages of suitably skilled graduates, technicians and artisans insufficiently competitive industrial and services sectors and weak sector strategies inequality and marginalisation, resulting in many economically marginalised people being unable to…

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was launched by Deputy President Phumzile Mlambo-Ngcuka in February 2006. After research and discussion with stakeholders, government identified six “binding constraints on growth” that needed to be addressed so as to progress in its desire for shared growth and to achieve its target of halving unemployment and poverty between 2004 and 2014. This could be achieved if the economy grew at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the period 2010 to 2014. These binding constraints were: deficiencies in government’s capacity the volatility of the currency low levels of investment infrastructure and infrastructure services shortages of suitably skilled graduates, technicians and artisans insufficiently competitive industrial and services sectors and weak sector strategies inequality and marginalisation, resulting in many economically marginalised people being unableto…

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was launched by Deputy President Phumzile Mlambo-Ngcuka in February 2006. After research and discussion with stakeholders, government identified six “binding constraints on growth” that needed to be addressed so as to progress in its desire for shared growth and to achieve its target of halving unemployment and poverty between 2004 and 2014. This could be achieved if the economy grew at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the period 2010 to 2014.These binding constraints were: deficiencies in government’s capacity the volatility of the currency low levels of investment infrastructure and infrastructure services shortages of suitably skilled graduates, technicians and artisans insufficiently competitive industrial and services sectors and weak sector strategies inequality and marginalisation, resulting in many economically marginalised people being unable to…

The Accelerated and Shared Growth Initiative for South Africa (AsgiSA) was launched by Deputy President Phumzile Mlambo-Ngcuka in February 2006. After research and discussion with stakeholders, government identified six “binding constraints on growth” that needed to be addressed so as to progress in its desire for shared growth and to achieve its target of halving unemployment and poverty between 2004 and 2014. This could be achieved if the economy grew at an average rate of at least 4.5% in the period to 2009, and by an average of 6% in the period 2010 to 2014.These binding constraints were: deficiencies in government’s capacity the volatility of the currency low levels of investment infrastructure and infrastructure services shortages of suitably skilled graduates, technicians and artisans insufficiently competitive industrial and services sectors and weak sector strategies inequality and marginalisation, resulting in many economically marginalised people being unable to…

A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico's real GDP per person is growing at 7 percent per year, it will take about 10 years ( =70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $ 11,000 per person, while it was about $ 44,000 per person in the United States.  If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico's real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico's 2005 real GDP per person have to double to reach the United States' 2005 real GDP per person?)

Given what you already know about Economics and based on your own informed opinion, which of the various measures of economic growth (e.g. GDP, GNP, real GDP, etc.) do you think is the most useful for understanding the macroeconomic “health” of a country and why? Please provide at least 3 reasons to justify your decision (1-2 PARAGRAPHS)

In a developing economy that primarily relies on agriculture, the government decides to implement a series of reforms aimed at liberalizing the financial sector, including easing restrictions on foreign bank entry. What is the most likely short-term impact of these reforms on the agricultural sector's access to credit?  A) Increased access to credit for the agricultural sector due to enhanced competition in the banking sector.  B) Decreased access to credit for the agricultural sector as foreign banks focus on more profitable urban and industrial clients.  C) No significant change in access to credit for the agricultural sector, as foreign banks have minimal impact on local lending.  D) A shift in credit allocation from large agricultural businesses to small-scale farmers due to diversified lending practices of foreign banks.

Todaro and Smith (2020: 192) state “…different countries face different bindingconstraints on achieving faster rates of growth and development…”. Analyse this statement in light of the Hausmann-Rodrik-Velasco Growthdiagnostic decision tree for South Africa that faces a high cost of finance.

In 2020, the World Bank and International Monetary Fund (IMF) have been deeply apprehensive of government debt defaults of developing countries due to COVID-19. Discuss why, when a leading developing country government defaults on its loan from a foreign country, interest rates on bonds issued by many other developing countries will rise and cause widespread harm to the world economy. (Use a loanable funds market diagram in your answer.)

Suppose that the central bank in the UK (The Bank of England) decides to raise interest rates because it is worried about high inflation. As a result, interest rates in the UK become higher than interest rates in the REST OF EUROPE. This acts as an incentive for EUROPEAN investors to increase the amount of funds they invest in British (UK) interest bearing assets. In order to increase their purchases of those UK assets, which are priced in PST, EUROPEAN investors have to convert EUR into PST. This conversion, in turn, increases the demand for PST. Based on the above information, please explain what will happen to the EUR–‐‑PST exchange rate. In other words, will the increased demand for PST, make PST gain value (appreciate

What are spillover effects and how do they affect growth? (LO27-4)

In an increasingly connected world, countries are engaging with global markets more than ever before. As a result, global wealth is shifting towards emerging markets. This megatrend—a global trend with sustained impacts—is profoundly influencing everyday life, society, and business. globalization has lifted many developing economies—most have seen expanding industrial performance and improving standards of living, particularly so in emerging economies.  The emergence of a sizeable, aspirational middle class, particularly in China, has made it an important destination for global companies. Indisputably, trends can change. Still, presently, we continue to expect emerging markets to offer significant growth potential for domestic and multinational firms. Hence, understanding international business activities, flows,  relationships requires understanding the economic power shifting to emerging economies. Key analytics include who they are, how they grow, the corresponding opportunities and…

The Grenada National Sustainable Development Plan 2020-2035 is based on three development pillars: the society; the economy and the environment.  A Medium Term Action Plan (MTAP) 2022 – 2024 was published in January 2022, which is a companion document to the Plan.  Using these links https://www.finance.gd/docs/NSDP2020-2035-FVi.pdf and https://www.finance.gd/docs/2022/FinalMTAP2022-2024upd.pdf i.Description of the current economic framework within which this Plan operates. (comment on the performance of key economic indicators: new and traditional. ii. Comment on the general economic development strategy, focusing on the macroeconomic policies – For example, is it strongly aligned with any of theories of economic development covered in the Course material. iii. Critically assess the general alignment of the national outcomes with the objectives of the Sustainable Development Goals (SDG’s). Give appropriate examples.Please assist with providing some insight on these in point form.

Civil Conflict = 0.27 - 0.38GDP Growth Ratecompute the change in the probability of a country experiencing a civil conflict, if the country’s GDP growth rate falls from +.10 to -.10. What does this number mean in words?