what did they calculate to get -.005 what numbers did they use
Mr.A makes $50,000 a year and pays $10,000 in taxes. Ms.B ma
Mr.A makes $50,000 a year and pays $10,000 in taxes. Ms.B makes $30,000 a year and pays $6,000 in ta… Show more Mr.A makes $50,000 a year and pays $10,000 in taxes. Ms.B makes $30,000 a year and pays $6,000 in taxes. Find the tax rate and after tax income for each of them. Identify what type of tax this is. Consumption is $6 trillion, investiment is $2 trilion and government purchases are 2.5 trillion. The country exports $1 trillion and imports 1.5 trillion. Find the net exports and solve for the level of aggregate demand. • Show less
A bond with 20 years remaining has a face value of $1000 and
A bond with 20 years remaining has a face value of $1000 and a coupon rate of 15%. Assume that the b… Show more A bond with 20 years remaining has a face value of $1000 and a coupon rate of 15%. Assume that the bond payments are annual and the coupon was just paid.(a) What is the yearly coupon payment?(b) What is the price of the bond if it has a 6% yield to maturity? (c) What is the price of the bond 10 years from now if the yield to maturity drops to 3%? In this case, assume that the coupon has not been paid but will be paid shortly. • Show less
An investor has the opportunity to buy one of four different
An investor has the opportunity to buy one of four different stocks. Each stock is currently selling… Show more An investor has the opportunity to buy one of four different stocks. Each stock is currently selling for $50 per share, and the investor will purchase 20 shares of one of the stocks and sell them one year later. If there is a recession (state 1) the selling prices will be $40, $52, $58, and $45. If there is no recession, the selling prices will be $53, $56, $54, and $60. Complete the payoff table and opportunity loss table below. Payoff Table Payoff Table Payoff Table Alternatives State 1 State 2 Stock 1 Stock 2 Stock 3 Stock 4 Opportunity Loss Table Opportunity Loss Table Opportunity Loss Table Alternatives State 1 State 2 Stock 1 Stock 2 Stock 3 Stock 4 a. Are any of the stocks clearly inferior choices? (Explain. You can eliminate any inferior choice(s) from the rest of the analysis). b.What is the alternative chosen using the optimistic (maximax) criterion? c.What is the alternative chosen using the pessimistic (minimax) criterion? d.What is the alternative chosen using the minimax regret criterion? Over the past 40 years, the probability of any given year being a recessionary year is 0.1. Given this information, e.Calculate the expected monetary value (EMV) for each stock. Which stock would an EMV maximizer choose? f.Calculate the EVPI (that is, how much the investor should be willing to pay an economist (or a psychic) to tell him, with certainty, next year’s state of nature). • Show less
Suppose your Zimbabwean bank account pays interest monthly w
Suppose your Zimbabwean bank account pays interest monthly with the interest rate quoted as an effec… Show more Suppose your Zimbabwean bank account pays interest monthly with the interest rate quoted as an effective annual rate (EAR) of 50%. (a) What percent interest will you earn each month? (b) Suppose the weekly infation rate in Zimbabwe is 1%. What is the yearly infation rate? (c) What is the real interest rate on your Zimbabwean bank account? Use the exact formula and not the approximation. • Show less
List the three most important expenditure programs of the fe
List the three most important expenditure programs of the federal government. How do these differ fr… Show more List the three most important expenditure programs of the federal government. How do these differ from the three most important expenditure programs of state and local governments? Explain why it makes more sense for the federal government to purchase “national defense” rather than state governments. • Show less
2. Assume that the demand for welding services is D(P) = 34-
2. Assume that the demand for welding services is D(P) = 34-P/2, and the inverse supply function is
The city park director needs to decide which hiking trails t
The city park director needs to decide which hiking trails to improve with the city’s lim… Show more QUESTION 1 The city park director needs to decide which hiking trails to improve with the city’s limited budget. All of the following are economic decision-making criteria EXCEPT: a. the cost of the improvements this year b. the future maintenance cost of the improvements c. the type of vegetation that should be grown along the improved trails d. the availability of grant money to pay for the improvements QUESTION 2 You are trying to decide how many credits to take in the upcoming summer term. All of the following are economic decision-making criteria EXCEPT: a. time until graduation if you take 1 or 2 courses during summer term b. cost of summer courses including tuition, books, and transportation c. amount of financial aid available d. how much you enjoy your major QUESTION 3 You borrow $10,000 and agree to repay it with interest at the end 6 years. Interest compounds at 4% per year. Which is the correct specification to determine how much you will be required to repay? a. F = 10,000(1.06) 4 b. F = 10,000(1.04) 6 c. P = 10,000(1.06) -4 d. P = 10,000(1.04) -6 QUESTION 4 You deposit $1000 in a savings account that compounds at the rate of ½% per month. How much will this account be worth at the end of 12 months? a. $1025 b. $1030 c. $1062 d. $1225 QUESTION 5 You put $1000 in an account that compounds at an interest rate of 5% per year. Approximately how long will it take until the account is worth $3000? a. 12 years b. 23 years c. 28 years d. 30 years QUESTION 6 Based on this cash flow diagram, what is a correct specification for finding X? a. X = 500(A/F,6%,7) b. X = 500(P/F,6%,7) c. X = 500(P/A,6%,7) d. X = 500(A/P,6%,7) QUESTION 7 Based on this cash flow diagram, what is the value of X? a. $2383 b. $2791 c. $3577 d. $4197 QUESTION 8 You are buying a car and wish to pay no more than $450 per month in loan payments. If the annual interest rate is 9% (3/4% monthly) and your loan will last for 5 years (60 months), what is the most you will be able to borrow? a. $1711 b. $3867 c. $21,678 d. $49,716 QUESTION 9 You want to borrow $220,000 for a 30-year mortgage to buy a house. If annual interest is 9%, what will your monthly payment be? a. $1175 b. $1771 c. $1784 d. $1884 QUESTION 10 If you save $1000 a year for 4 years at a 7% annual rate then add no more money to your account but let the balance compound for 6 more years at 7%, what will your accumulated savings be at the end of Year 10? a. $6664 b. $9376 c. $12,811 d. $18,251 QUESTION 11 A 25-year old architect contributes $4000 to an Individual Retirement Account. She plans to contribute this same amount each year for 40 years. If the interest rate is 6% over the 40 years, how much will she accumulate in her account? a. $60,184 b. $160,000 c. $411,440 d. $619,048 QUESTION 12 If an architect wants to end up with $1,000,000 at the end of 40 years, how much must she save tax free each year if the interest rate is 6%? a. $6460 b. $7000 c. $16,417 d. $25,000 • Show less
