At its meeting ending on 2nd February 2022, The Bank of England (BoE) Monetary PolicyCommittee (MPC) voted to increase interest rate. Consumers react to this rise in the interestrate and adjust their choices between spending today and spending tomorrow. Suppose thatthere are two consumers: 1) John is a saver, and he decides to increase his savings afterthe BoE policy; 2) Lili is a saver, and she decides to decrease her savings after the BoEpolicy. Use the Life-Cycle Model (LCM) to answer the following questions. Q2 c) Draw a diagram to show the optimal choice for Lili. Explain your answer and yourdiagram in detail.

The optimal choice for the Lili is shown below as,

Answered: st rate. Consumers react to this rise…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

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45. A product manager at Clean & Brite (C&B) wantsto determine whether her company should market anew brand of toothpaste. If this new product succeeds in the marketplace, C&B estimates that itcould earn $1,800,000 in future profits from thesale of the new toothpaste. If this new productfails, however, the company expects that it couldlose approximately $750,000. If C&B chooses notto market this new brand, the product managerbelieves that there would be little, if any, impacton the profits earned through sales of C&B’s otherproducts. The manager has estimated that the newtoothpaste brand will succeed with probability 0.35.Before making her decision regarding this toothpaste product, the manager can spend $130,000 ona market research study. Based on similar studieswith past products, C&B believes that the studywill predict a successful product, given that productwould actually be a success, with probability 0.80.It also believes that the study will predict a…
(4) Danny creates up an investment arrangement for friend that will return $5000 the first year, $6125 the second year,$7250 the third year,and so on,for 30 years.State appropriate formulae and determine,how much will the investment yield altogether?
4. A liability insurance policy has a deductible of $100,000, a policy limit of$20,000,000 and co-insurance such that the policyholder pays 20% of theremaining claim. How much does the insurer pay if the loss is: (i) $50,000(ii) $362,000(iii) $20,065,000(iv) $31,400,000

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