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Steven M.

Macroeconomics

1 day, 12 hours ago

This chapter explains that investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit. a. Why is it difficult to implement both of these policies at the same time? b. What would you need to know about private saving to judge which of these two policies would be a more effective way to raise investment?

EN

Emmanuel N.

Macroeconomics

3 days ago

Why do economists include only final goods and services when measuring GDP? Why don’t they include the value of the stocks and bonds bought and sold? Why don’t they include the value of the used furniture bought and sold?

DS

Dhurata S.

Macroeconomics

4 days, 4 hours ago

What is the central economic idea humorously illustrated in the article? How does the central idea relate to economic recessions and vigorous economic expansions?

JC

Jon C.

Macroeconomics

4 days, 13 hours ago

Suppose GDP is $\$$8 trillion, taxes are $\$$1.5 trillion, private saving is $\$$0.5 trillion, and public saving is $\$$0.2 trillion. Assuming this economy is closed, calculate consumption, government purchases, national saving, and investment.

AV

Alan V.

Macroeconomics

5 days, 12 hours ago

Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock in XYZ Corporation for $\$$110. After 1, 2, and 3 years, it will pay a dividend of $\$$5. You expect to sell the stock after 3 years for $\$$120. Is XYZ a good investment? Support your answer with calculations.

ST

Steve T.

Macroeconomics

5 days, 12 hours ago

9. Purchasing-power parity holds between the nations of Ectenia and Wiknam, where the only commodity is Spam. a. In 2015, a can of Spam costs 4 dollars in Ectenia and 24 pesos in Wiknam. What is the exchange rate between Ectenian dollars and Wiknamian pesos? b. Over the next 20 years, inflation is expected to be 3.5 percent per year in Ectenia and 7 percent per year in Wiknam. If this inflation comes to pass, what will the price of Spam and the exchange rate be in 2035? ($Hint:$ Recall the rule of 70 from Chapter 27.) c. Which of these two nations will likely have a higher nominal interest rate? Why? d. A friend of yours suggests a get-rich-quick scheme: Borrow from the nation with the lower nominal interest rate, invest in the nation with the higher nominal interest rate, and profit from the interest-rate differential. Do you see any potential problems with this idea? Explain.

SL

Steven L.

Macroeconomics

5 days, 12 hours ago

Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person $not$ want to hold stock in the company where he works?

NT

Nga T.

Macroeconomics

5 days, 22 hours ago

3. The costs and benefits of a tariff for different groups? Besides tariff, discuss some other instruments of Trade policy in terms of their costs and benefits for different groups.

CF

Carol F.

Macroeconomics

6 days, 12 hours ago

Fill in the blanks:

PW

Patrick W.

Macroeconomics

1 week ago

Nobel Prize winner Franco Modigliani found that the most important transmission mechanisms of monetary policy involve consumer expenditure. Describe how at least two of these mechanisms work.

DM

Dorothy M.

Macroeconomics

1 week ago

A company faces two kinds of risk. A firm-specific risk is that a competitor might enter its market and take some of its customers. A market risk is that the economy might enter a recession, reducing sales. Which of these two risks would more likely cause the company's shareholders to demand a higher return? Why?

PF

Patrick F.

Macroeconomics

1 week, 1 day ago

A company faces two kinds of risk. A firm-specific risk is that a competitor might enter its market and take some of its customers. A market risk is that the economy might enter a recession, reducing sales. Which of these two risks would more likely cause the company's shareholders to demand a higher return? Why?

PW

Patrick W.

Macroeconomics

1 week, 1 day ago

Which kind of stock would you expect to pay the higher average return: stock in an industry that is very sensitive to economic conditions ( such as an automaker) or stock in an industry that is relatively insensitive to economic conditions (such as a water company)? Why?

PI

Pat I.

Macroeconomics

1 week, 1 day ago

A company has an investment project that would cost $\$$10 million today and yield a payoff of $15 million in 4 years. a. Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent? b. Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?

PW

Patricia W.

Macroeconomics

1 week, 4 days ago

Explain whether each of the following events increases or decreases the money supply. a. The Fed buys bonds in open-market operations. b. The Fed reduces the reserve requirement. c. The Fed increases the interest rate it pays on reserves. d. Citibank repays a loan it had previously taken from the Fed. e. After a rash of pick pocketing, people decide to hold less currency. f. Fearful of bank runs, bankers decide to hold more excess reserves. g. The FOMC increases its target for the federal funds rate.

VO

Vickie O.

Macroeconomics

1 week, 4 days ago

Jamal has a utility function $U = W^{1/2}$, where W is his wealth in millions of dollars and U is the utility he obtains from that wealth. In the final stage of a game show, the host offers Jamal a choice between (A) $\$$4 million for sure, or (B) a gamble that pays $\$$1 million with probability 0.6 and $\$$9 million with probability 0.4. a. Graph Jamal's utility function. Is he risk averse? Explain. b. Does A or B offer Jamal a higher expected prize? Explain your reasoning with appropriate calculations. ($Hint$: The expected value of a random variable is the weighted average of the possible outcomes, where the probabilities are the weights.) c. Does A or B offer Jamal a higher expected utility? Again, show your calculations. d. Should Jamal pick A or B? Why?

at

Alex T.

Macroeconomics

1 week, 4 days ago

The government purchases component of GDP does not include spending on transfer payments such as Social Security. Thinking about the definition of GDP, explain why transfer payments are excluded.

DJ

Daisy J.

Macroeconomics

1 week, 4 days ago

For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain. a. a bond of the U.S. government or a bond of an Eastern European government b. a bond that repays the principal in year 2020 or a bond that repays the principal in year 2040 c. a bond from Coca-Cola or a bond from a software company you run in your garage d. a bond issued by the federal government or a bond issued by New York State

at

Alex T.

Macroeconomics

1 week, 5 days ago

Revised estimates of U.S. GDP are usually released by the government near the end of each month. Find a newspaper article that reports on the most recent release, or read the news release yourself at http://www.bea.gov, the website of the U.S. Bureau of Economic Analysis. Discuss the recent changes in real and nominal GDP and in the components of GDP.

CW

Cassandra W.

Macroeconomics

1 week, 5 days ago

As the chapter states, GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative measure of economic well-being?

MT

Movies T.

Macroeconomics

1 week, 5 days ago

In time, wage will become unstuck and misperceptions will turn into accurate perceptions. Explain this statement regarding AD-AS model.

MT

Movies T.

Macroeconomics

1 week, 5 days ago

In time, wage will become unstuck and misperceptions will turn into accurate perceptions. Explain this statement regarding AD-AS model.

mr

Miah R.

Macroeconomics

1 week, 6 days ago

what is Marie's opportunity cost of purchasing a pie

mr

Miah R.

Macroeconomics

1 week, 6 days ago

if the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week

PA

Patrick A.

Macroeconomics

1 week, 6 days ago

Suppose that Intel is considering building a new chip making factory. a. Assuming that Intel needs to borrow money in the bond market, why would an increase in interest rates affect Intel's decision about whether to build the factory? b. If Intel has enough of its own funds to finance the new factory without borrowing, would an increase in interest rates still affect Intel's decision about whether to build the factory? Explain.

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