A. lower inflation rate. 3. higher rate of capital accumulation. C. higher long-run rate of growth. D. lower long-run rate of growth. Real Interest Rate NS Quantity of National Saving ($)
Q: A city government is considering two types of town-dump sanitary systems. Design A requires an…
A: Often referred to as CBR, the benefit-cost ratio is an indicator used in project assessment as well…
Q: An entrepreneur is looking to open a restaurant in a town with only one other restaurant. The…
A: Unique Selling Proposition:A unique selling proposition refers to the unique and distinctive…
Q: Question 2 Tembi's Fashion Boutique can jointly produce evening gowns and formal gowns. The joint…
A: Economies of scale refer to the benefit received due to the large size of the operation. Since the…
Q: The marginal utility of additional units of a product tends to: Go up Go down Remain constant There…
A: Utility refers that wants satisfying power of the commodity , different people gets different…
Q: Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into…
A: Externalities occur when there is an indirect impact on a party that is not directly related to the…
Q: capital are given as: MPL = (0.75)(0.25)Kº.25 L-0.25 MPK = (0.25)(0.25)K-0.75L0.75 a. Construct the…
A: The isoquant curve represents the different combination of inputthat is required to produce a given…
Q: In order to acquire an entrepreneurial resource, a company will most likely have to give up 000…
A: It can be defined as a concept that shows the amount of expenditure and any other sacrifice such as…
Q: Assume you put money into an asset that pays you 7 percent interest and inflation is 5 percent.…
A: The inflation rate is the rate at which the price level increases over time. The inflation rate is…
Q: Q1. The cash-flow diagram on the left-hand side of the diagram below is transformed into an…
A: An equivalent annual annuity helps to determine the amount to be paid or received each year for a…
Q: According to table 1.2, what is the opportunity cost of producing one cruise ship in Norway? Worker…
A: Opportunity cost refers to the loss of value of alternative good because you choose another…
Q: Mary's credit card situation is out of control because she cannot afford to make her monthly…
A: Financial market:It is a market where there is buying and selling of financial securities. It…
Q: Which of the following is likely to occur in the long run based on the graph of the monopolistically…
A: The study and evaluation of corporate financial concerns using abstract economic concepts and ideas…
Q: Consider a simple demand-and-supply model of a competitive labour market in a small town. The demand…
A: Demand refers to the quantity that a consumer wishes to buy at a given price in given period of…
Q: a: Illustrate an example of your choice and discuss consumer surplus, producer surplus, Total…
A: Producer surplus is an economic concept that represents the difference between the actual price a…
Q: In a private closed economy (a) the marginal propensity to save is 0.2, (b) consumption equals…
A: Economic equilibrium is a condition or state in which economic forces are balanced. In effect,…
Q: A positive cross-elasticity of demand for two products indicates that they are: Multiple Choice O O…
A: Two goods are said to be complementary when they are used together. Two goods are said to be…
Q: Which of the following is consistent with the interest rate effect? As the price level decreases,…
A: There are several factors that affect aggregate demand like the Interest rate effect, the real…
Q: 12. Suppose that events A and B are complements. From this, we know that: both events always occur…
A: This can be defined as a concept that shows when one event is going to occur the other event did not…
Q: When estimating a cubic short-run production function Q =AL³ + BL² using linear regression analysis,…
A: A cubic short-run production function is a mathematical representation of the relationship between…
Q: Consider the Solow-Swan model of growth. Imagine that the production function is Y = AK¤L¹-a 1. Use…
A: The Solow-Swan model, also known as the Solow growth model or the neoclassical growth model, is a…
Q: A. more expensive relative to foreign goods, which makes exports fall and imports rise. B. less…
A: The real exchange rate refers to the rate at which one unit of good is exchanged for goods of…
Q: i) What is the marginal propensity to consume in period 1 out of first period income (@c₁/Əy₁) if…
A: i) Marginal Propensity to Consume in Period 1To calculate the marginal propensity to consume in…
Q: In San Diego, 135 people are willing to work an hour as cashiers if the wage is $20 per hour. For…
A: The labor market serves as a crucial pillar of economic well-being, impacting both individuals and…
Q: The residential division of Prism’s high-speed Internet service uses one advertising agency, while…
A: Selection bias:Selection bias occurs when the sample used in a study is not representative of the…
Q: True or False: The licensing and regulation of financial advisers is one way by which the…
A: Licensing and regulation of financial advisers are crucial globally. Advisers must meet educational…
Q: Question 3 In Crabby land, there are only 3 goods: Burgers, Patties, and Pizza. The following table…
A: The consumer's changes in price may vary sometimes, This is measured through the consumer price…
Q: Discuss the measures of the monetary aggregates that is composed of the most liquid asset
A: The monetary aggregates refer to monetary measures. Typically, the monetary measures are divided…
Q: David Rubenstein mentions that stock and bond traders are not presently very worried about the…
A: Macroeconomic monitoring will continue to be important since it dictates the economy's eventual…
Q: The table shows the supply schedules of B's and G's (the only candy sellers in the market) Quantity…
A: Market supply is obtained by adding the individual supplies of all the firms in an economy.
Q: When Apple introduced its first portable media player, the iPod, its constant marginal cost of…
A: Inverse Demand function : p = 600 - 25QMarginal cost = $200Fixed Cost = 736 million
Q: The shift of the production possibilities frontier from A to B in the figure above illustrates a.…
A: Production possibility frontier depicts the combination of two goods that can be produced by using…
Q: When the rate of output is at the socially efficient level, _______________. net social value…
A: Socially efficient output means production and consumption of goods and services in a way to…
Q: High growth in the rich countries from 1985 to 2014 was most likely due to A. high consumption…
A: When considering the factors that contributed to high economic growth growth in rich countries…
Q: 1. The table below shows hypothetical demand and supply schedules for the Canadian dollar in terms…
A: An exchange rate is the rate at which one currency can be exchanged for another currency. It…
Q: Which of the following statements about price elasticity of demand is not true? Choose all that…
A: PED refers to the extent by which the quantity demanded of a good or service is affected by…
Q: Calculate the following using information from the table below: i. GDP at Market Price ii. GNI at…
A: National income:It refers to income earned from producing goods and services in an accounting year.…
Q: You are negotiating with another firm to become one of its suppliers. What types of promises might…
A: Marginal Cost: Marginal cost refers to the additional cost incurred by producing one more unit of a…
Q: Mondi Company produces party boxes that are sold in bundles of 1000 boxes. The market is highly…
A: Total cost refers to the total cost of production including total variable cost and total fixed…
Q: or a firm with the market power, the perfect maximize and price of a product is______ to the…
A: Monopoly power exists in the monopoly market where a single firm dominates the entire market. A firm…
Q: 14. Application: Demand elasticity and agriculture The following graph illustrates the market for…
A: Equilibrium is defined as the balance of demand and supply in the market. Demand and supply affect…
Q: Suppose the government of Marina decides to pay for public radio by taxing people on the basis of…
A: Taxation is crucial in today's economic setting because it provides governments with revenue to…
Q: Time Period at higher wages, more workers will seek to enter the industry, thereby adding to the…
A: The equilibrium wage rate is determined where the demand and supply for labor are equal. The wage…
Q: This year (10 years after you first took out the loan), you check your loan balance. Only part of…
A: Interest rate:It is the rate that an investor on this amount of investment receives. The principle…
Q: The price elasticity of demand measures... The response of revenue to a change in price The…
A: Price elasticity of demand is the concept related to demand and supply curve which refers to change…
Q: i) Derive hours worked (as a function of the parameters of the model) in the market equili- brium…
A: i) Derive hours worked in the market equilibriumGiven the utility function:Taking the first order…
Q: 7. Using the income elasticity of demand to characterize goods Data collected from the economy of…
A: Income elasticity of demand measures how sensitive the quantity demanded of a good is to a change in…
Q: Other things the same, if the exchange rate changes from 125 yen per dollar to 135 yen per dollar,…
A: In economics, the exchange rate is generally defined as the price of one nation's domestic currency…
Q: The market supply curve for this industry is OA. Q = P-200 for P > 200 and Q = 0 for P ≤200. B. Q…
A: Perfectly competitive market refers to the market where large number of buyers and sellers exist in…
Q: 1."Money is neutral" means that either an expansionary or a contractionary monetary polic Group of…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: When Ajax Co. produced 3 units of output per week, its total fixed cost was $100 and total variable…
A: Total cost (TC) is the overall expense incurred by the firm in producing its goods or services. It…
Step by step
Solved in 3 steps
- The national saving schedule (S) is usually drawn with a positive slope because: a. the value of the marginal product of capital is high when the real interest rate is high b. the demand for investment schedule shifts to the right when the real interest rate increases c. the private sector has a greater incentive to save when the real interest rate is high d. firm’s demand for investment is high when the real interest rate is highSuppose that the real interest rate is 6%. Next, assume that some factors changes, such that the expected rate of return, declines by  two percentage points at each prospective level of investment. Assuming no change in the real interest rate, by how much and in what direction will the investment change?  which of the following might cause this change: (a) a decision to increase inventories; (b) an increase in excess production capacity.Consider an economy described by the following equations: Y = C + I + G AND, Y = 20,000; G = 4,000; T = 4,000; C = 1000 + 0.80(Y − T); : I= 2,500 – 120r. national saving AND the equilibrium real interest rate equal: Select one: a. national saving 2200 AND the equilibrium real interest rate 2.5%. b. national saving 2500,AND the equilibrium real interest rate 2%. c. national saving 4000 AND the equilibrium real interest rate 1.5%. d. national saving 3200 AND the equilibrium real interest rate 2.5%.
- Economists from Funlandia have collected the following information about the economy (all measured in billions of bucks): Y = 12, C= 9, T = 2, and G = 2.5. The economists also estimate the investment function is I = 2 – 0.5r where r is the country’s real interest rate expressed as a percentage. Calculate private saving, public saving, national saving, investment, and the real interest rate.National Income: Where It Comes From and Where It Goes — End of Chapter Problem If consumption depends on the interest rate, saving will also depend on it. In particular, the higher the interest rate, the greater will be the return to saving. Hence, the supply of loanable funds will be represented by an upward-sloping, rather than a vertical, curve. National saving is the sum of public saving and private saving. Investment in this analysis is private investment. It does not include public investment.a) What generally happens to the major macroeconomic variables such as GDP, unemployment rate, and inflation rate during an economic recession? b) Define economic expansion using the reference terms of actual GDP and potential GDP. c) Explain how investment spending and interest rate related. What is the reason behind such a relationship? d) Find the correlation coefficient between interest rate and Real Investment. Does this (actual) value support the theoretical relationship between the variables? Explain. (e) Explain the importance of investment spending for the economy. Only typed answer
- Consider an economy called Xanadu for which desired aggregate consumptiondepends on income, Y. and the real interest rate, r, according toCd =100+0.7Y - 200r.Xanadu's GDP is Y = 1000 and government spending on goods and services is G=180. Xanadu's desired future capital stock is given byK* = 140 - 100ucwhere luCdenotes the user-cost of capital. The price of capital is PK =2, thephysical depreciation rate is d =0.1 and the existing capital stock is K0= 50. Trapital stock between any period t and the following period t+1 evolves accordng toKt+1 = It+(1-d)Kt where It the level of investment. Assume throughout that net factor payments from abroad (NFP) is equal to zero.Suppose instead that Xanadu is a small open economy facing a world interest rate of 1%. It follows that Xanadu's current account position is equal toA) -16B) -51C) -6D) -8Problem Set 4: Saving and Investment Economists in Fantasialand, a closed economy, have collected the following information about the economy for a particular year: Y = 9000; C = 6000; T = 1500; G = 1700. The economists also estimate that the investment function is: I = 3300 - 100r, where r is the country’s real interest rate, expressed as a percentage (i.e. r = 1 means interest rate is one percent). Calculate private saving, public saving, national saving, investment, and the equilibrium real interest rate.Suppose that the typical consumer has a salary of $30,000 in 2017. His salary grows by 2% per year. What can we say about his ability to pay for his consumption basket over time? (A) He can never pay for his consumption basket without going into debt. (B) In 2017 and 2018, he can pay for his own consumption, but will be unable to in 2019 and 2020 without taking on debt. (C) From 2017-2019, he can pay for his own consumption, but will be unable to in 2020 without taking on debt. (D) He can always pay for his own consumption basket without taking on debt.
- Suppose that conditions in the economy are such that the after-tax expected real interest rate is described by the equationRa = a X gWhere a is a number that depends on how people value their consumption in one period compared with another period, and g is the growth rate of the economy. The a equals 1 when people prefer consumption to be balanced, with the same amount of consumption each period; a may be bigger than the one when people prefer consumption today over consumption in the future, with a being larger and larger the more impatient people are:A - Suppose that a = 2, g = 0.02, the inflation rate is expected to be steady at pi = 0.03, and the tax rate is .40. What are the values of the equilibrium nominal interest rate and the before-tax expected real interest rate?B - Beginning with the situation in part a, if the growth rate of the economy increases to .04, what are the new values of the equilibrium nominal interest rate and the before-tax expected real interest rate?C -…Suppose that conditions in the economy are such that the after-tax expected real interest rate is described by the equationRa = a X gWhere a is a number that depends on how people value their consumption in one period compared with another period, and g is the growth rate of the economy. The a equals 1 when people prefer consumption to be balanced, with the same amount of consumption each period; a may be bigger than the one when people prefer consumption today over consumption in the future, with a being larger and larger the more impatient people are:D - Beginning with the situation in part a, if the expected inflation rate declings to 0.01, what are the new values of the equilibrium nominal interest rate and the before tax expected real interest rate?E - From these results, what general conclusions can you draw about the relationship between the nominal interest rate and the rate of economic growth, the tax rate, and the inflation rate? what about the relationship between the before…1. Suppose the labor market is initially at its equilibrium, i.e., labor supplied equals labor demanded. Explain and show graphically the effects of an increase in the economy’s capital stock. Please draw the full graph and provide a detailed explanation of the effect. Label the axes and explain why either the labor demand curve or the labor supply curve shifts. 2. Suppose the goods market is initially at its equilibrium, i.e., the desired level of national saving equals the desired level of investment. Explain and show graphically how an increase of the effective tax rate on capital goods affects the goods market equilibrium. Please draw the full graph and provide a detailed explanation of the effect. Label the axes and explain why either the saving curve or the investment curve shifts.