The real rate of interest Select one: O a. is the same as the inflation rate. O b. is the rate a which a low-risk borrower can obtain a loan. O c. is the money rate of interest minus the risk premium. O d. is generally more than the money interest rate when there is inflation.
Q: Hollingsworth needs a new precision grinding wheel. If 12% is the acceptable return fo…
A: The ability for investors to compare values across time makes present value crucial. PV can assist…
Q: What is/are the Nash Equilibrium(s) in this game? 1. (5,5) only. 2. (7,7) only. 3. both (5,5) and…
A: Nash equilibrium is the equilibrium point in which each player chooses its optimal strategy in…
Q: 3. A firm has three factories each producing the same item. Let x, y, and z denote the respective…
A: The mathematical link between the expense spent during production of a good and the quantity of that…
Q: Assume the aggregate demand for a good follows the law of demand (2<0). Suppose the equilibrium in…
A: IntroductionThe law of demand states that the price of a commodity and the quantity demanded of that…
Q: 2. Deviating from the collusive outcome Mays and McCovey are beer-brewing companies that operate in…
A: The profit-maximizing quantity is such a quantity where the marginal revenue curve intersects the…
Q: We try to predict the unemployment (unem) with an AR(1) model and VAR(1) (unemployment and…
A: Unemployment refers to a situation and in general is a social-evil for every economy. It implies the…
Q: Suppose one third of all families on the island of Sophia had zero income in a given year and the…
A: Lorenz curve can be showcased as cumulative proportion of income on vertical axis and cumulative…
Q: What are the tools of the Federal Reserve uses to control the money supply? (Check all that apply)…
A: The FED oversees the economy's monetary policy, which aids in regulating prices and preserving price…
Q: Suppose that for a particular firm the only variable input into the production process is labor and…
A: Costs of production, which comprise expenses of many kinds, are incurred during the production of…
Q: One reason why a tradable permit system will reduce pollution more efficiently than a…
A: Tradable permits are pollution limits which can be traded in order to create a market in the right…
Q: Suppose that one day of labor in each country produces the following quantities of fish and cheese:…
A: Comparative advantage is an economy's ability to produce a specific product or service at a lower…
Q: To regulate natural monopolies, the governments can choose amongst the following options: Select all…
A: When a firm experiences economies of scale or falling long run average cost over a sufficiently…
Q: A French company imports goods with transaction value at EX-Works €8000, transport cost is €650 and…
A: Tariff refers that a taxation which is imposed by the government on goods and services , import…
Q: Suppose a monopolist was charging a price of $70 for its product and was selling 60 units. If it…
A: Given units sold at 70 $ price = 60 units Units sold at 69 $ = 61 units Total revenue at 60 units =…
Q: Briefly explain why the principle that the majority of voters should decide an election outcome may…
A: According to the concept of majority rule, the group with the most members has the authority to make…
Q: The Federal Environmental Management Agency (FEMA) uses the Command and Control System of managing…
A: A command-and-control rule imposes strict limitations on pollution emissions and/or requires the…
Q: om this function determine: A. Total Cost (TC) B. Variabel Cost (VC) C. Fixed Cost (FC) Please…
A:
Q: If the economy struggles in 2023 Lincoln Electric will seedemand ____________ for its products.…
A: The two most fundamental ideas in economics used to comprehend consumer and producer choices are…
Q: Profit Maximization. Assume that the output price p, wage rate w, and rate of return to capital y…
A: Given production function q=f(L,k) Output price=p Wage ate=w interest rate=r
Q: Explain why moving from the market equilibrium to the social equilibrium achieves social efficiency…
A: Externalities are the cost or benefits which are faced by the people outside the process (production…
Q: Behavioral economics is the field of economics that........... explores economic decision making…
A: Economics is the social science that studies the decision-making process of individuals and…
Q: Find the Walrasian equilibrium price ratio P/Pr and the Walrasian allocations. Does trade take place…
A:
Q: A manufacturing company decides to increase production, and must hire 75 new workers. To meet this…
A: Sunk costs occurs when an expense has already occurred and cannot be recovered. Examples of sunk…
Q: - The accompanying table shows the percentage accounted for by private savings, investment spending,…
A: Private saving = Y - C - T Public saving (or Budget balance) = T - G Net capital inflow = Import -…
Q: Consider a quantity-setting duopoly. The two firms are Alpha, Ltd. and Beta, Inc. The demand…
A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the…
Q: 3. Suppose the prisoner's dilemma in question 2 is played an infinite number of times. Assume a…
A:
Q: Paula hires Alfred to manage her store. The left column of the table below shows Alfred’s possible…
A: When investors have a mindset of making investments decisions by focusing on the potential gains it…
Q: . Suppose in the spring of 2023 the price of softwood lumber increases from $1.31 per board foot…
A:
Q: 2. The November 29, 2022, Wall Street Journalreports that the price of chicken breasts has fallen…
A: The term "elasticity" in economics refers to how the overall quantity needed of an item or service…
Q: QUESTION 4 In a duopoly, if the firms have agreed to jointly maximize profits, then each firm can…
A: When two companies jointly control all or almost all of the market for a certain commodity or…
Q: The goal of product differentiation and advertising in monopolistic competition is to make:…
A: Monopolistic competition: - monopolistic market formation is a former in which there is a large…
Q: Which of the following are arguments in favor of active stabilization policy by the government?…
A: Stabilization policy refers to the strategy that can be implemented by the government of a country…
Q: How can an effective lender of last resort prevent financial panics from developing? Why was the Fed…
A: A lender of last resort (LoLR) is a financial institution that provides liquidity or emergency…
Q: A price-taking firm's variable cost function is VC = 20³, where Q is its output per week. It has a…
A: A variable cost is a corporate expense that changes with respect to how much an organization…
Q: Due to heightened uncertainty, there has been an increase in the demand for liquidity (i.e. cash).…
A: Given, Due to heightened undertainity, there has been an increase in the demand for liquidity (i.e.…
Q: The benefits received principle of taxation asserts that Select one: a. Society at large should pay…
A: Tax refers is a compulsory financial charge levied by the government. It is used to fund government…
Q: Which of the following causes the short-run aggregate supply curve to shift to the right? A. a…
A: A short run aggregate supply curve shift when there is change with respect to productivity factors,…
Q: A P5,500,000 retrofitted space-heating system is being considered for a small office building, and…
A: Present value is the value of investment in today's dollar Future value is the value of investment…
Q: Use the IS Equation, S(y) + M(y) = I(r) + X, to derive the slope of the IS curve. Describe the…
A: The combinations of real interest rate (r) and Output(Y) at which G(goods) market is in equilibrium…
Q: Suppose there is some hypothetical economy in which households spend $0.50 of each additional dollar…
A: The marginal propensity to save is the proportion of family income that is saved for each extra…
Q: Direction: Write T if the statement is correct, and F if the statement is incorrect. _____ 7.…
A: introduction International trade as a concept holds great importance in economics. International…
Q: Many economists argue that rivalry in goods is not a real difference, but just a pricing problem.…
A: A rival good is something that only one user may acquire or consume. On the other hand, a product is…
Q: Suppose there are three countries, A, B and C, in the world and A imports automobiles from either a…
A: When a group of countries agree to remove tariffs between theselves but their own external tariff is…
Q: Identify the elements of scarcity, choice, and opportunity cost in each of the following: 1. The…
A: Scarcity refers to the scarce or the unavailability of the resources and inputs to produce a certain…
Q: 1. What does economist and EconTalk host Russ Roberts think is “single deepest contribution of…
A: An economist is a specialist who investigates how a society's resources affect its output or…
Q: The demand for labor is called OAbsolute demand ODerived demand OMinimum wage demand OActual demand…
A: Absolute demand refers to our desire or need for specific goods such as food, water, transportation,…
Q: The table below shows revenue data for different firms producing airplanes. Use the given…
A: Concentration ratio is used to measure the concentration of market power in the market. The higher…
Q: Determine the maximum number of i* values for the cash flow shown below Expense Cumulative CF…
A: In contrast to an investment with a negative NPV, which would result in a financial loss, one with a…
Q: Which is not a valid argument favoring the use of output regulation over input regulation? a. Firms…
A: The regulation is a type of rule that is maintained by a higher authority. When an environment…
Please please sir answer both I know sir policy but i have no more questions left sir please
Step by step
Solved in 3 steps
- Find the present worth today in real value corresponding to the cur- rent values shown below for a 4 percent ination rate and a 4 percent interest rate. a. $400 three years from now b. $400 three years ago c. $10 next year d. $350 983 in 10 years from now e. £1 one thousand years ago the answer is 292 f. $1 000 000 000 three hundred years from nowEconomics In 54 months time you expect a cash flow of $3 million. Calculate it’s present value (PV) given the 54-month interest rate is currently 4%, with a volatility of 120 basis points (bps). Explain, using equations with properly-defined mathematical notation, how to map this cash flow to vertices at 4 years and 5 years, in such a way that the volatility of the present value of the mapped cash flow remains at 120 bps. Suppose the 4-year rate has a volatility of 110 bps and the 5-year rate has a volatility of 150 bps, and their correlation is 0.9. How much should be mapped to each vertex. Give your answer in PV terms and round your answers to whole $ values.The Turners have 10 years to save a lump-sum amount for their child’s college education. Today a four-year college education costs $75,000, and this is expected to increase by10%per year into the foreseeable future. a. If the Turners can earn 6% per year on a conservative investment in a highly rated taxfree municipal bond, how much money must they save each year for the next 10 years to afford to send their child to college? b. If a certain college will “freeze” the cost of education in 10 years for a lump-sum of current value $150,000, is this a good deal?
- Two oil wells are for sale. The first will yield payments of $11,400 at the end of each of the next 11 years, while the second will yield $6,100 at the end of each of the next 24 years. Interest rates are assumed to hold steady at 7.9% per year over the next 24 years. Which has the higher present value? the first oil wellthe second oil well they are the samecannot be determinedYou can buy a property today for $3 million and sell it in 5 years for $4 million. (You earn no rental income on the property.) a. If the interest rate is 8%, what is the present value of the sales price? Note: Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) b. Is the property investment attractive to you? c-1. What is the present value of the future cash flows if you also could earn $200,000 per-year rent on the property? The rent is paid at the end of each year. Note: Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. c-2. Is the property investment attractive to you now?Let p(t)= t2+1 represents a flow of income over time t from 1 to 4. Compute the Present Value (PV) of this flow if the interest rate is r=2.
- The sole proprietor of the FM2 Financial Services, Bondo, receives allaccounting profits earned by her firm and a K28,000-a-year salary she pays herself. Itis noteworthy that she also has a standing salary offer of K35,000 a year if she agreesto work for Bank of Zambia. If she had invested her capital outside her own company,she estimates that would have made a return of K22,000 a year. Further, informationhas reached you that last year, Bondo’s accounting profit was K50,000. Calculate hereconomic profit?1. Given the cash flow diagram as shown, if interest is 5%, determine the equivalenttotal present and accumulated amount. 2. How much do you need to deposit today into an account that pays 3% per year sothat you can make 10 equal annual withdrawals of P1000, with the first withdrawalbeing made seven years from now? 3. Four-year lease agreement requires payments of P10000 at the beginning of everyyear. If the interest rate is 6% compounded monthly, what is the cash value of thelease?1. A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt (principal) and interest on the debt, over a period of 5 years. If the interest per year is 10%, what is the amount of the annual repayment? 2. Suppose that the $20,000 above is to be paid at a rate of $4,000 per year plus the interest that is owed and based on the beginning of year unpaid principal. Compute the total amount of interest repaid in this situation and compare it with that of the problem above. Why are the 2 amounts different? Solve all questions compulsory....
- 2. Assume a bond with the following characteristics: face value = $1000; maturity = 5 years; N yearly coupon payments = $100. a. If the current price of this bond is $850, state what the formula is to calculate the bond's yield to maturity and state the range of interest rates where the yield to maturity should fall b. If you purchased this bond at face value and held it for 1 year, when you resold it for $850, what is the bond's rate of return?2. Nathan and Stephanie are saving for their daughter's college education. Their daughter, Paige, is now 8 years old and will be entering college 10 years from now (t = 10). College tuition and expenses at State U. are currently $16,000 a year and are expected to increase at a rate of 4% a year. They expect Paige to graduate in 4 years (if Paige wants to go to graduate school, she's on her own). Tuition and other costs will be due at the beginning of each school year (at t = 10, 11, 12, and 13). So far, Nathan and Stephanie have built up $9,000 in the college savings account. Their long-run financial plan is to contribute $3,000 a year at the beginning of each of the next five years (at t = 0, 1, 2, 3, and 4). Then they plan to make 6 equal annual contributions at the end of each of the following 6 years (t = 5, 6, 7, 8, 9, and 10). Their investment account is expected to earn 8%. How large must the annual payments be in the subsequent 6 years (t = 5, 6, 7, 8, 9, and 10) to meet their…3. A machinery supplier is offering a certain machinery on a 10% down payment and the balance payable in equal end of the year payments without interest for 2 years. Under this arrangement, the price is pegged to be P250,000. However, for cash purchase, the machine would only cost P195,000. What is the equivalent interest rate that is being charged on the 2 year payment plant if interest is compounded quarterly? a. 19.44% b. 20.40% c. 21.20% d. 18.90%