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| The government of the Republic of Andea is currently pegging the Andean peso to the dollar at E = 1 peso per dollar. Assume the following: In year 1 the money supply M is 2,250 pesos reserves R are 1,250 pesos, and domestic credit B is 1,000 pesos. To finance spending, B is growing at 50% per year. Inflation is currently 0, prices are flexible, PPP holds at all times, and initially, P = 1. Assume also that the foreign price level is P* = 1, so PPP holds. The government will float the peso if and only if it runs out of reserves. The U.S. nominal interest rate is 5%. Real output is fixed at Y = 2,250 at all times. Real money balances are M/P = 2,250 = L(i)Y, and L is initially equal to 1. a. Assume that Andean investors are myopic and do not foresee the reserves running out. Calculate domestic credit in years 1, 2, 3, 4, and 5. At each date, also calculate reserves, money supply, and the growth rate of money supply since the previous period (in percent). b. Continue to assume myopia. When do reserves run out? Call this time T. Assume inflation is constant after time T. What will that new inflation rate be? What will the rate of depreciation be? What will the new domestic interest rate be? c. Continue to assume myopia. Suppose that at time T, when the home interest rate i increases, then L(i) drops from 1 to 2/3. Recall that Y remains fixed. What is M/P before time T? What will be the new level of M/P after time T once reserves have run out and inflation has started? d. Continue to assume myopia. At time T, what is the price level going to be right before reserves run out? Right after? What is the percentage increase in the price level? In the exchange rate? e. Suppose investors know the rate at which domestic credit is growing. Is the path described above consistent with rational behavior? What would rational investors want to do instead? f. Given the data presented in the question so far, when do you think a speculative attack would occur? At what level of reserves will such an attack occur? Explain your answer. |
The government of the Republic of Andea is currently pegging
A real-world problem faced by policymakers, forecasters, and businesses every
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| Now fill in the remaining columns of the table by answering the following questions. (a) What is potential output in 2018? You could call this a trick question, since there??s no way for you to know the answer! In a way, that??s the main point: fundamentally, we have to take some other measurements and make some assumptions. Suppose your research assistant tells you that in 2018, business surveys, unemployment reports, and recent years?? experience suggest that the economy is operating at potential output. So go ahead and write 18.0 for potential in this year. (b) Assume potential output grows at a constant annual rate of 2.5%, and complete the remainder of the table. (c) Comment on the state of the economy in each year. When does the economy enter a recession? When does the recession end? (d) How is your answer in part (c) related to the growth rate of actual output in the last column of the table? |
You have just taken a job that requires you to
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| You have just taken a job that requires you to move to a new city. In relocating, you face the decision of whether to buy or rent a house. A suitable house costs $200 000 and you have saved enough for the down payment. The (nominal) mortgage interest rate is 10% per year, and you can also earn 10% per year on savings. Interest earnings on savings are taxable, and you are in a 30% tax bracket. Interest is paid or received, and taxes are paid, on the last day of the year. The expected inflation rate is 5% per year. The cost of maintaining the house (replacing worn-out roofing, painting, and so on) is 6% of the value of the house. Assume that these expenses also are paid entirely on the last day of the year. If the maintenance is done, the house retains its full real value. There are no other relevant costs or expenses. a. What is the expected after-tax real interest rate on the home mortgage? b. What is the user cost of the house? c. If all you care about is minimizing your living expenses, at what (annual) rent level would you be just indifferent between buying a house and renting a house of comparable quality? Rent is also paid on the last day of the year. |
The annual rate of growth of real GDP in a
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| The annual rate of growth of real GDP in a developing nation is 0.3 percent. Initially, the country’s population was stable from year to year. Recently, however, a significant increase in the nation’s birthrate has raised the annual rate of population growth to 0.5 percent. a. What was the rate of growth of per capita real GDP before the increase in population growth? b. If the rate of growth of real GDP remains unchanged, what is the new rate of growth of per capita real GDP following the increase in the birthrate? |
Canada’s real GDP was $840 billion in 1998 and $880
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| Canada’s real GDP was $840 billion in 1998 and $880 billion in 1999. Canada’s population growth rate in 1999 was 0.8 percent. Calculate: a. Canada’s economic growth rate in 1999. b. The growth rate of real GDP per person in Canada in 1999. c. The approximate number of years it takes for real GDP per person in Canada to double if the 1999 economic growth rate and population growth rate are maintained. d. The approximate number of years it takes for real GDP per person in Canada to double if the economic growth rate rises to 6 percent a year but the population growth rate remains the same as it was in 1999. |
In the central United States, farm ground is devoted to
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| In the central United States, farm ground is devoted to corn and beans as far as the eye can see. The supply of beans (in millions of bushels) is given by Qbs = 2Pb – Pc. The supply of corn is given by Qcs = 2Pc – Pb. Let the demand for beans be given by Qbd = 30 – Pb, and the demand for corn be given by Qcd = 30 – Pc. a. Solve the general equilibrium price and quantity of both beans and corn. (Hint: If you have trouble with this step, follow the procedures outlined in Problem 3.) b. Suppose there is a shock to bean demand, so that the quantity demanded at each price increases by 8 million bushels. The new demand for beans can be written as Qbd = 38 – Pb. Solve for the new general equilibrium price and quantity of beans and corn. c. What happens to the price of beans and the quantity sold as a result of the demand increase? d. What happens to the price of corn and quantity sold as a result of the increase in the demand for beans? Explain. |
You are a personnel manager at a ball-bearing factory. You
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| You are a personnel manager at a ball-bearing factory. You are considering two schemes to motivate your employees during a period of particularly brisk business. In Scheme A, you tell your employees, “If you increase your output by 10%, I will give you a $500 bonus at the end of the month.” In Scheme B, you tell your employees, “I am giving you a $500 bonus. But if you do not achieve 10% growth by the end of the month, I will withdraw it.” a. If your employees are completely rational, will they be motivated more by Scheme A, Scheme B, or will both schemes motivate them equally? b. If your employees are swayed by the endowment effect, which scheme is likely to be most effective in motivating them? Explain your answer. c. Discuss the interplay of the endowment effect and framing bias inherent in this problem. |
The market for digital cameras is relatively new. Ajax Inc.
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| The market for digital cameras is relatively new. Ajax Inc. produces what it regards as a high- quality digital camera. Knockoff Inc. produces what it regards as a low-quality digital camera. However, because the market is so new, reputations for quality have not yet developed, and consumers cannot tell the quality difference between an Ajax digital and a Knockoff digital just by looking at them. If consumers knew the difference, they’d be willing to pay $200 for a high-quality camera, and they’d be willing to pay $100 for a low-quality camera. It costs Ajax $85 to produce a high- quality camera, and it costs Knockoff $55 to produce a low-quality camera. A recent MBA hire at Ajax suggests that Ajax could differentiate its camera from Knockoff’s by offering a full-coverage warranty (which would fully cover any defect in the camera at no cost to the customer). The MBA estimates that it would cost Ajax $20 per year to offer such a warranty. The MBA also estimates that it would cost Knockoff $40 per year should Knockoff attempt to copy Ajax’s warranty strategy. Consumers will feel that the camera with the longest warranty is high- quality and that with the shortest warranty is low- quality. The camera companies want to maximize the profit per camera. What is Ajax’s profit per camera in the digital camera market? |
SEU Operations Management and Factors Affecting Productivity Discussion
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| Operations Management and Factors Affecting Productivity (100 points) Maduro Cleaning is a small organization that provides cleaning services to both residential and commercial clients. As a small organization, the owner assigns crews of two, three, or four employees to jobs each morning but the owner does not have a good method of determining a reasonable amount of time that each cleaning should take. The owner decided to keep data on job times and crew sizes in the hopes of developing a productivity measure. Address the following requirements: Calculate which of the crew sizes has the best productivity per worker and explain your method. Evaluate your outcome and the possible reasons that would explain those results. Project what the productivity might be for a crew size of five and explain your reasoning. Crew Size Avg: Productivity per Crew 2: 3765 square meters per day 3: 4915 square meters per day 4: 6309 square meters per day |
HRM 517 Strayer Leading and Managing the HR Project Overview Essay
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| Everything you need is listed below. I also posted my previous assignment incase you need it Continuing from the previous assignment, it is now important to consider your approach to leading and managing your HR project. Tightly structured projects tend to restrict cross-organizational communication. As such, objectives originate at the top of the project and are subdivided as they are passed down, resulting in little opportunity for creative contributions. Effective leadership and managing of the project can greatly improve communication and team contributions. Instructions Write a 5–6 page paper in which you: Select two types of project management power that would be relevant to your current project, and explain your rationale. Be specific. Identify and briefly discuss a minimum of four outcomes (possible issues) resulting from managing projects, and address how you might resolve the issues. Be clear with your rationale. Discuss two increased challenges a project manager may face when leading virtual or global project teams. Recommend three strategies to deal with the challenges. Identify and explain your overall plan for communication management during the project. The plan must be comprehensive and at a minimum address structure, purpose, method, and timing. Use three sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For with research, writing, and citation, access the library or review library guides . This course requires the use of Strayer Writing Standards (SWS). For assistance and information, refer to the Strayer Writing Standards link in the left-hand menu of your course. The specific course learning outcome associated with this assignment is: Examine types of manager power, how to resolve common management challenges, and how to manage team communication. |
