Use the table to answer the question below. The success of a stimulus program can be measured by faster GDP growth and the number of jobs created in its wake. The Congressional Budget Office (CBO) estimated that the 2017 tax cuts had significant effects. Source: Congressional Budget Office (April 2018). 2018 2019 2020 2021 2022 Real GDP acceleration (%) 0.3 0.6 0.8 0.9 1.0 Increase in employment (%) 0.2 0.5 0.6 0.7 0.7 According to CBO estimates shown in the table, how many jobs were created in 2018 and 2019 by the 2017 tax cuts? (Assume initial employment of 160 million.) Instructions: Enter your responses as a whole number. 2018:| ]jobs 2019: ]jobs

Use the table to answer the question below. The success of a stimulus program can be measured by faster GDP growth and the number of jobs created in its wake. The Congressional Budget Office (CBO) estimated that the 2017 tax cuts had significant effects. Source: Congressional Budget Office (April 2018). 2018 2019 2020 2021 2022 Real GDP acceleration (%) 0.3 0.6 0.8 0.9 1.0 Increase in employment (%) 0.2 0.5 0.6 0.7 0.7 According to CBO estimates shown in the table, how many jobs were created in 2018 and 2019 by the 2017 tax cuts? (Assume initial employment of 160 million.) Instructions: Enter your responses as a whole number. 2018:| ]jobs 2019: ]jobs

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter2: Descriptive Statistics

Section: Chapter Questions

Problem 26P: The economic downturn in 20082009 resulted in the loss of jobs and an increase in delinquent loans...

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Suppose the government announces that, based on a just-completed survey, the growth rate in the economy is likely to be 2 percent in the coming year, as compared to 5 percent for the past year. Will securityprices increase, decrease, or stay the same following this announcement? Does it make any difference whether the 2 percent figure was anticipated by the market? Explain.
Inflation has been increasing over the last 16 months. What is the FED doing to temper inflation? A)Pass an act that will invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030. The bill will invest approximately $300 billion in Deficit Reduction and $369 billion in Energy Security and Climate Change programs over the next ten years. The bill will also allow Medicare to negotiate for prescription drug prices. B) Increasing prices on goods and services to create a counter response to inflation. C)Increase the funds rate D) Manipulating the stock market to temper returns and expectations.
An economy in which household consumes 75% of all additional income and all taxes are lumpsum, an when government injects a stimulus of GHC 40 million GDP will? A. Increase by GHC 40 millionB. Decrease by GHC 40 millionC. Increase by GHC 80 millionD. Increase by GHC 160 millionE. Decrease by GHC 160 million
1. The current market rate of interest is 8 percent. At that rate of interest, businesses borrow $500 billion per year for investment and consumers borrow $100 billion per year to finance purchases. The government is currently borrowing $100 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumers will be affected if the budget deficit increases to $200 billion per year.b. Show the impact on the market rate of interest, assuming that taxpayers do not anticipate any future tax increases.c. How would your conclusion differ if taxpayers fully anticipate future tax increases?
Recall that if the economy continues to be strong, Carson Company may need to increase its production capacity by about 50 percent over the next few years to satisfy demand. It would need financing to expand and accommodate the increase in production. Recall that the yield curve is currently upward sloping. Also recall that Carson is concerned about a possible slowing of the economy because of potential Fed actions to reduce inflation. It needs funding to cover payments for supplies. It is also considering the issuance of stock or bonds to raise funds in the next year a. At a recent meeting, the Chief Executive Officer (CEO) stated his view that the economy will remain strong, as the Fed's monetary policy is not likely to have a major impact on the interest rates. So he wants to expand the business to benefit from the expected increase in demand for Carson's products. The next step would be to determine how to finance the expansion. The Chief Financial Officer (CFO) stated that if…
The current market rate of interest is 8 percent. At that rate of interest, businesses borrow $500 billion per year for investment and consumers borrow $100 billion per year to finance purchases. The government is currently borrowing $100 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumers will be affected if the budget deficit increases to $200 billion per year. b. Show the impact on the market rate of interest, assuming that taxpayers do not anticipate any future tax increases. c. How would your conclusion differ if taxpayers fully anticipate future tax increases?
The finance staff at Millcreek Company have constructed a forecast of the company’s net income.The chief executive officer (CEO) of Millcreek wonders why the forecast of next year’s interestexpense is the same as this year’s interest expense, whereas next year’s sales are expected toincrease by 20% over this year’s sales. What is the most likely explanation?a) Millcreek is expected to be more aggressive at minimizing its income tax expense next yearb) Millcreek expects its operating expenses to increase by 20% next year, the same as the expectedincrease in salesc) Millcreek is not expected to obtain any new loans next year, not repay any old loansd) Millcreek expects its operating expenses to increase by more than 20% increase in salesexpected next year
You are a financial analyst, and you are tasked with calculating the expected return and standard deviation of returns for Kershaw Enterprises. Toward that end you are given the following data: · In an expanding economy Kershaw is expected to earn 5.30% · In a booming economy Kershaw is expected to earn 9.50%; · In a contracting economy Kershaw is expected to earn 3.50% · In a recession Kershaw is expected to earn -1.20%; · The probabilities for expansion, boom, contraction and recession are 20%, 25%, 35% and 20% respectively.
The Scenarios: You work in the macroeconomic research department of an investment bank. Based on your modelling of the economy, you think that in the next few months US GDP will evolve according to three basic scenarios: Scenario A: GDP will rise 3%. This will send the S&P ETF to 414. Scenario B: GDP will stagnate. S&P ETF will stay at 407. Scenario C: GDP will fall 2%. This will send the S&P ETF to 400. Question Compute the payoff and net payoff in the three scenarios above of a strategy made of two legs: Leg 1: a long straddle with maturity in February and strike 407. Leg 2: a short straddle with maturity in March and strike 407. Use the data in Table 2. Discuss why an investor might be interested in trading this strategy. What is the investor betting on?
The economic downturn in 20082009 resulted in the loss of jobs and an increase in delinquent loans for housing. In projecting where the real estate market was headed in the coming year, economists studied the relationship between the jobless rate and the percentage of delinquent loans. The expectation was that if the jobless rate continued to increase, there would also be an increase in the percentage of delinquent loans. The following data show the jobless rate and the delinquent loan percentage for 27 major real estate markets. Source: The Wall Street Journal, January 27, 2009. a. Compute the correlation coefficient. Is there a positive correlation between the jobless rate and the percentage of delinquent housing loans? What is your interpretation? b. Show a scatter diagram of the relationship between the jobless rate and the percentage of delinquent housing loans.
A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $12,000. It will offer more liberal sales terms, but this will result in average receivables increasing by $69,000. These actions are expected to increase sales by $820,000 per year, and cost of goods will remain at 80% of sales. Because of the firm’s increased purchases for its own production needs, average payables will increase by $37,000. What effect will these changes have on the firm’s cash cycle? (Use 365 days in a year. Do not round your intermediate calculations. Round your answer to 2 decimal places.) Change in cash cycle days
Scenarios: You work in the macroeconomic research department of an investment bank. Based on your modelling of the economy, you think that in the next few months US GDP will evolve according to three basic scenarios: Scenario A: GDP will rise 3%. This will send the S&P ETF to 414. Scenario B: GDP will stagnate. S&P ETF will stay at 407. Scenario C: GDP will fall 2%. This will send the S&P ETF to 400. Question 1: Compute the payoff and net payoff of a bear spread strategy built with put options in the three scenarios above. The put options should have strikes 405 and 409 and mature in February. Draw the profile of the bear spread strategy. Use the data in Table 2. Please show your calculations. Discuss your result.