income is currently 600,000 unemployment is 5 percent, and there are signs of coming inflation. Yo… Show more income is currently 600,000 unemployment is 5 percent, and there are signs of coming inflation. You rely on ur research assistant for specific numbers. He tells you that potential income is 564,000 and the mpe is .5. a)The government wants to eliminate the inflationary gap by changing expenditures. What policy do you suggest? b)by how much will unemployment change after you policy has taken effect? c)your research assistant comes in and says,”sorry, I meant that the mpe is.8. Redo you calculations for parts a and b • Show less

congratulations! You habe neen appointed an exonomic policy advisor to the united states. You are… Show more congratulations! You habe neen appointed an exonomic policy advisor to the united states. You are told that the economy is significantly below its potential output and that the following will happen next year: World income will fall signigicantly and the price of oil will rise significantly. ( the united states is an oil improter.) a)what will happen to the price level and output? Using the AS/AD model, demonstrate your predictions graphically. b)what policy might you suggest to the government? • Show less

government… Show more given the following data about the economy: profit $268 consumption 700 investment 500 government spending 300 net exports 275 rent 25 depreciation 25 net foreign factor income 3 interest 150 compensation to employees 1,329 a)calculate aggregate output(GDP) and aggregate income b)compare the two calculations in (a) Why are they not precisely equal? c)calculate GNP d) calculate NPD • Show less

if nominal output rises from $13.5 billion to $14 billion and the GDP deflator rises from 100 to 1… Show more if nominal output rises from $13.5 billion to $14 billion and the GDP deflator rises from 100 to 105, a)what is the percetage increase in nominal output? b)what is the percentage increase in the price index? c)what happened to real output? d)by how much would the price index have had to rise for real income to remain constant? • Show less

B) If the two players were t… Show more A) If the game is played only once, what outcome would you expect? Why? B) If the two players were to play this game repeatedly for an indefiite number of times, what outcome would you expect? why? Also, I think they both take strategy two. If I am correct on that, why do they both not take strategy one? Reason why I ask is because those give a higher payoff don’t they? • Show less

Why do 20-years bonds issued by the US government have lower rates of return than 20-year bonds issu… Show more Why do 20-years bonds issued by the US government have lower rates of return than 20-year bonds issued by corporations? And which would you consider more likely, that longer-term US government bonds have a higher interest rate than short-term US government bonds, or vice versa? Explain (In this chapter we discussed short-term US government bonds. But the US government also issues longer-term bonds with horizons of up to 30 years.) • Show less

3) The Cooper Electronics Company has developed the following schedule of potential investment proje

Maese Industries Inc. has warrans outstanding that permit the holders to purchase 1 share of stock p… Show more Maese Industries Inc. has warrans outstanding that permit the holders to purchase 1 share of stock per warrant t a price of $25. Calculate the excersie value of the firm’s warrants if the common sells at each of the following prices:(1) $20, (2) $25, (3) $30, (4) $100. (hint: A warrant’s exercise value is the difference between the stock price and the purchase price specified by the warrant if the warrant were to be exercised.) • Show less

You expect to earn 8% per year on your investment. If you i… Show more Solve the following using The Rule of 72. You expect to earn 8% per year on your investment. If you invest $3000 today, how much will your investment be worth in 9 years ? • Show less

Assume that an investment is forcasted to produce the following returns: a 20% probability of a $120… Show more Assume that an investment is forcasted to produce the following returns: a 20% probability of a $1200 return; 50% probabilty of a $5600 return and 30% probabilty of $9500 return. What is the expected amount of return this investment will produce? • Show less