What is relationship between the accelerator model of inventory investment and the flexible accelerator model of capital accumulation?

Q: List all the equilibrium conditions of this model and Using the equilibrium conditions listed, write…

A: Given , Production function : F = Ka(bN)1-a Growth rate of Labor augmented technology = f  No…

Q: Dear Sir/Madam while studying for my macroeconomics course, I came across this case study that I am…

A: Answer: In an open economy, national saving (S) is equal to the sum of investment (I) and current…

Q: On the following graph, plot the relationship between the real interest rate and net capital outflow…

A: The value of a country's exports minus the value of its imports over a specific time period is known…

Q: An example of an institution that will increase the expected payoff of investment is O a) a more…

A: The amount required to repay a loan in full, including all accumulated interest and fees, as well as…

Q: Looking at business fixed investment, elaborate on why investment is negatively related to the…

A: Investments are negatively related rate of interest.

Q: Suppose the structural model of Bangladesh is given below: Consumption function, C 100 + 0.80Ya…

A: Goods market equilibrium occurs at a point where aggregate demand equates total income i.e.…

Q: Use a Cobb-Douglas production function and capital accumulation relation to explain how finance fits…

A: Introduction: In economics, a production function is an equation that represents the connection…

Q: Suppose that output is produced according to the production function Y = Kα[(1 - u)L]1-α, where K is…

A: Steady state condition. sY = dk

Q: Using appropriate diagram(s), discuss Fischer’s theory as it relates to determination of optimal…

A: Fisher's theory focuses on two main points:(1) There is no capital stock because all capital is used…

Q: Define and explain the internal rate of return on a new investment?

A: Internal rate of return or IRR is a measure in economics of  capital budgeting parlance and…

Q: How does investment as defined by economists differ from investment as defifined by the general…

A: Investment in capital stocks, such as buildings, machinery and infrastructure, is an economic…

Q: Scenario 1 Consider an overlapping generations model with 100 lenders and 121 borrowers born in…

A: We are going to calculate market clearing interest rate to answer this question.

Q: what is fisher effect theory and explian is it holds are not in short trem capital markets

A: Fisher's Effect:- The Fisher Effect is a concept proposed by economics expert Irving Fisher to…

Q: Explain the term capital in depth

A: Companies employ capital to fund the continuous production of goods and services in order to…

Q: Why is Okun's law a useful rule of thumb to keep in mind when analyzing our short-run model?

A: Okun’s Law: Okun’s law explains that there is a negative relationship between gross domestic product…

Q: According to the new classical investment model we have: MPK = Gr + 8) i. Derive the above equation…

A: since you have asked multiple questions and according to our policy we can solve the first question…

Q: Suppose the U.S. has an investment opportunity which costs $200 which will increase output from 100…

A: The term "marginal productivity" refers to the change in output (Y) as a function of the amount of…

Q: Find the golden rule level of capital stock

A: The solow models would result in determining the steady state level of capital which would result in…

Q: Problem 1A According to the new classical investment model we have: MPK =* (r + 8) (1) i. Derive the…

A: Solution:- i)

Q: Tom buys a $5000 bond from XYZ Company. XYZ Company uses the $5000 to purchase a new piece of…

A: Investment spending in macroeconomics is a process of investing/allocating money in the anticipation…

Q: Q3. Consider the following Cobb-Douglas production function: Y = AL K- where 0 = 0.25 Assuming…

A: (Only first three parts have been solved).    The Neoclassical theory of Investment was formulated…

Q: Which of the following represents stock variables?  (a) Wealth, saving and unemployment; (b) Gold…

A: The stock variables are those variables which measure at a specific point of time. For example, the…

Q: In a closed economy with no government, use the following information to compute the long run level…

A: The Solow Growth Model refers to the exogenous model of economic growth that analyzes Δ in the level…

Q: Problem 1A| According to the new classical investment model we have: MPK =(r + 8) (1) i. Derive the…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Define the term Projected annual net savings?

A: Projected annual savings means the estimated annual cost savings projected to be produced by a…

Q: In which ways the product-cycle model inconsistent with the Heckscher-Ohlin model? In which ways are…

A: Trade: It refers to the goods and services that has been exchanged in the countries. The trade helps…

Q: How does competition between capitals necessitate accumulation?

A: Capital accumulation (also termed the accumulation of capital) powers that further the pursuit of…

Q: Draw the equilibrium of financial market. From the given below information in which case classical…

A: Equilibrium is the state in which market supply and demand is in balance with each other which in…

Q: Explain how the income from production is distributed to labor and capital according to the…

A: It shows the division of National income among factors of production. The assumptions made under…

Q: What is the Net-investment test?

A: Net- investment measures the company's assets and investment like property, software, plants and…

Q: 3. P falls, Y rises, N stays the same and W declines. Can all of this be the result of an increase…

A: At the point when financial experts allude to capital, they are alluding to the resources — actual…

Q: o macroeconomists, investment is mainly when firms : a.  sell stocks and bonds to the public b.…

A: Investment is mainly when a firm increases its capital assets with the goal of earning income from…

Q: Using the Tobin’s q theory, elaborate on the relationship between investment and capital stock?

A: In his q-theory of investment, James Tobin suggested that companies make investment decisions based…

Q: a. Consider a small open economy Atlantis, under the Specific Factors Model. The economy can produce…

A: Answer a) The Specific Factors Model is a model that assumes that an economy produces only two goods…

Q: Compare and contrast stock market activity in October 1929, October 1987 and late summer 1998. What…

A: The stock market crash of 1929 was the collapse of the stock prices, for four consecutive ways. It…

Q: Identify the Four Types of Models in Economic Capital Modeling

A: Economic Capital Modeling Economic capital represents the amount of capital investment, or equity,…

Q: Explain/Discuss Three ways that a reduced rate of interest influences real capital investment.

A: Real capital investment is the sum of money which is given to a company to achieve it business…

Q: Obtain the golden rule savings rate for an economy with a production function F(K, N) KN. How does…

A: The production function is given by  F(K, N) = K13N23 Now, we have to express it in terms of capital…

Q: When is the value of the stock market equal to the value of the capital stock?How is this related to…

A: Tobin's q theory of investment  Tobin was the first economist that explain the relation between the…

Q: Which theory is called as the neo classical theory of the rate of interest

A: According to the given question A neo classical theory of the rate of interest is basically an…

Q: If Im looking at an infinite period model and im told my dividend is always 0 at every period, would…

A: At the marketplace, dividend is the income for the stockholders of an organization.

Q: If the maximum potential combination of consumer and capital goods produced by an economy has…

A: The maximum potential of an economy refers to its potential of producing goods and services. This is…