The National Development Plan (NDP) looks at building economic сараcity. Explain, with reference to the NDP, why gross fixed capital formation (investment) is important to building economic capacity in the economy, and whether or not the rates that are shown in the table above are sufficient to meet the requirements of the NDF .
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- Suppose that a firm begins at time t=1 with a capital stock of K(1)= 200,000 and, in addition to replacing any depreciated capital, is planning to invest in new capital at the rate I(t)=50,000t*-3/2 for the forseeable future. Find the planned level of capital stock T years from now. Will this firm’s capital stock grow without bound as T -> ∞ ? Explain using a graph.Show graphically how the capital stock will respond to(i) a permanent increase in output price;(ii) a temporary investment tax credit scheme that rebates a fraction r of the value ofinvestment.Explain how Life-Cycle Hypothesis and the Permanent Income Hypothesis, explain the difference between long run APC and short run APC.
- What is the ratio of real assets to total assets in the table found in Step 2?Economic investment refers to ________. Question 4 options: A) postponing purchases of goods and services. B) selling a financial asset for a gain. C) buying a financial asset for a gain. D) making new additions to a firm's stock of capital.How do you forecast Walmart’s future income statement utilizing forecasted growth rates?
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- With reference to what is referred to in Economics as 'the Circular Flow ofIncome', discuss the functions performed by Commercial Banks and Investment 1BanksExplain why when the spread between government bonds rate and corporate bond rates of the same maturity widens, it is helpful in predicting a possible recession. (widening of the spread just means that the difference between corporate and government bonds increases)Read the following premise carefully and answer the questions specifically and in detail: "Financial institutions such as banks, mortgage companies and finance companies serve as intermediaries between those who have a surplus versus those who have a deficit creating a capital injection market." Using the concepts of real interest rate and expected rate of return, he contrasts the relationship between savings and capital investment. Using the macroeconomic theory presented in the module content, he explains the relationship of the financial market with the economic growth of a country. Explain the dynamics that are expected to occur between different development policies in the injection of capital as instruments to promote growth, sustainability and economic stability of a country.