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Describe the Adjusted-discount method?
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- Give some examples of economic questions where the concept of present dis-counted value would be useful.Define the term Inflation-free interest rate?A worker plans to retire at the age of 65, at which time he will start collecting his retirement benefits. Then there is a sudden change in the forecast of inflation when the worker is 63 years old. In particular, inflation is now predicted to be higher than it had been expected so that the average price level of market goods and wages is now expected to be higher. What effect does this announcement have on the person’s preferred retirement agea. If retirement benefits are fully adjusted for inflation?b. If retirement benefits are not fully adjusted for inflation?
- in the McCall partial equilibrium model, if unemployed individual can only live for 10 periods. In each period, she will receive $400 if unemployed. The offered wage is uniformly distributed in the range of [500,1000] 1.what will the reservation wage be in the period 9 if the discount rate is 0.9? 2.what will the reservation wage be in the period 8 if the discount rate is 0.9?Define the term fixed asset?Select Correct and explain Why Social security payments have been adjusted for inflation annually since the late 1970s yet it is sometimes argued that the true cost of living for retirees on social security rises less than the cost of living adjustment used by the government. If this is the case, retirees: are hurt by inflation even with the government's inflation adjustment. are protected from inflation by the government's inflation adjustment. benefit from using the government's cost of living adjustment rather than a more accurate cost of living adjustment. would be better off if the government cost of living adjustment more accurately reflected the true cost of living for retirees.
- Suppose you have $100 saved in the bank at an annual saving rate of 5 percent today. Also, the inflation rate is expected to be 7 percent annually over the next few years. What kind of confusion related to inflation would this create? Group of answer choices Blurred price signals Difficulties in long-term planning Unintended redistributions of purchasing power Substitution BiasSally worked hard all year and put her savings into a mutual fund that paid a nominal interest rate of 4 percent a year. During the year, the CPI increased from 185 to 190. What was the real interest rate that Sally earned? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Nominal Wage rates are: wages and salaries plus the value of benefits the number of people paid hourly wages wage rates adjusted for inflation wage rates minus taxes and other deductions the rate of payment to workers in current dollars
- Explain the statement. Whether true or false. Consumer future expectations plays an significant role in determining the price of a good or service.Evaluate as accurately as you can how each of the following individuals would be affected by unanticipated inflflation of 10 percent per year:a. A pensioned railroad worker.b. A department-store clerk.c. A unionized automobile assembly-line worker.d. A heavily indebted farmer.e. A retired business executive whose current income comes entirely from interest on government bonds.f. The owner of an independent small-town department store.Suppose a nominal interest rate is 12%, and the expected rate of inflation is 9%. If next year the expected rate of inflation rises to 11%, what would most likely happen as a result?