(Q#3) There is an improvement in the interest returns that can be earned from long term Bank CD's. Moreover, the stock market and real estate markets have strengthened and are expected to continue to rise in value providing strong investment returns. Note: consider the desire to hold financial wealth in the form of money balances that very little interest: (a) the quantity of money balances demanded will increase (b) the quantity of money balances demanded will decrease
Q: Problem 28-07 Suppose a French bottle of champagne costs 20.5 euros. Instructions: Enter your…
A: The price of the domestic currency in relation to another currency is known as the foreign exchange…
Q: The following are market demand and supply equations for baked beans: QD = 80 − 6P QS = 20 + 6P…
A: Since you have posted a question with multiple subparts, we will solve the first three sub-parts for…
Q: PCM. The finm's short-rur function is given SC = 7q' -0.2q' + 4g + 1 a. Derive the short-run su
A: *Answer:
Q: $1 and Px. $2. How 4-11. Consider the production function Y X}" X". Px. many units of X, and X,…
A: A production function translates a set of inputs into a collection of outputs.In other words, it…
Q: Section A Answer the following question. a) Assume that a country is suffering from rising inflation…
A: Answer a. The government can impact the level of economic activity by adopting proper monetary…
Q: The demand and total cost functions for a monopoly firm are: Q(P) = 39.5 – 0.5P TC(Q) = 60 – Q +…
A: Under the monopoly market, there is only one firm that sells all units of the product to all buyers.…
Q: A coupon bond has two years to maturity, a face value of $1000 and a coupon rate of 2%. The yield to…
A: Given, Par value of bond =$1000 Number of years to maturity = 2 Annual coupon of bond = 2% *1,000…
Q: An existing machine in a factory has an annual maintenance cost of 40,000 pesos. A new and more…
A: Here we calculate the Net present value of the machine and conclude that is new machine good for…
Q: 7. Simple economies can be described in terms of three major economic flows. These are: a. income,…
A: The economics as a study is based upon the basic idea that the resources which are present with the…
Q: Sally consumes two goods, X and Y. Her utility function is given by the expression U = 2XY3. The…
A: Given Px =20, Py=10 and I = 500
Q: (a) Why is education and training rarely provided by firms? What government policies would encourage…
A: Endogenous growth theory is referred to the economic theory that can argue that there is a…
Q: The following events shift either aggregate demand, aggregate supply, both or neither. Using a…
A: The equilibrium price is set up where the aggregate demand and aggregate supply are equal.
Q: Which of the following goods would be included in the calculation c gross domestic product? Steel…
A: Gross domestic product (GDP) measures the market value of final goods and services produced by an…
Q: Why do most economists oppose price ceilings and price floor? What are their negative consequences?
A: The government determines the maximum price for a good or service. Price ceilings keep prices from…
Q: b. Suppose the other variable affecting the demand for and supply of chicken meat have the following…
A: The curve that depicts various quantities of goods and services being demanded by individuals at…
Q: What are the principal causes of income inequality and what are popular and conventional measures to…
A: The measure that depicts the uneven distribution of income throughout a population is being known as…
Q: 2.12 Two urns contain k balls each. Initially, the balls in the left urn are all red and the balls…
A: Two urns contain k balls each. Initially, the balls : Xn has possible states 0,1,2,...,k which are…
Q: Given the utility function, where U is the total utility and x and y are the commodities consumed,…
A: U(x,y) = (5x+3)2(4y+2)3
Q: According to efficiency wage theory, what is NOT a reason that companies want to pay an efficiency…
A: Efficiency wage theory says that firms pay workers above competitive wage.
Q: Given the following: C = 150 + 0.25Y4 = 150 + 0.25(Y – T) I = 300 G = 450 T = 250 Solve for the…
A: "In macroeconomics, closed economy-equilibrium will occur at a point where total output (Y) equates…
Q: Economics of Education. The issue of education is quite critical. The demand for education by…
A: The issue of education is really important. Society has a great demand for education. On the other…
Q: A consumer has utility u(I) = VI and income $1,000. When sick, the consumer must go to the doctor,…
A: U = I0.5 Income = $1,000 Visiting the doctor without insurance = $400 Probability of getting sick…
Q: The Federal Reserve can target both the money supply and interest rates simultaneously. O True O…
A:
Q: I. Disequilibrium occurs when planned aggregate expenditure is greater than aggr II. Disequilibrium…
A: Disequilibrium: Disequilibrium arises when the market fails to clear all its products. That means…
Q: As in the previous problem, suppose Gi-hun's cost function is C(Q) = 32+2Q?, and that Gi-hun is one…
A: Answer; a) It is P = MC P = 4Q Q = 0.25P This is the single seller supply curve b) It…
Q: Which of the following is not an example of some of the government policies that, intentionally or…
A: Government policies have sometimes led to intentional or unintentional higher inequality. If the…
Q: An industry consists of four firms with annual sales of $4,000, $6,000, $5,500, and $7,000. What is…
A: Herfindahl-Hirschman Index refers to the sum of square of market share percentages by each firm in a…
Q: The soft-budget constraint manifested itself in
A: Since you have posted multiple questions, we will answer the first question for you. Soft Budget…
Q: Export subsidies, such as for aircraft producers, can in theory increase domestic welfare when firms…
A: Export subsidies refer to the tool used by the government to encourage export in a country. This…
Q: Consider a perfectly competitive firm with the following production function: q=L025K0.25 a. Solve…
A: We have cost of labor = w and Cost of capital = r
Q: 1. If banks perform a switch from deposits to currency, what happens to the federal funds rate?…
A: The study of how buyers and sellers interact to determine transaction prices and quantities is…
Q: (a) Inflation and the rising cost of living are currently a big problem. Suppose that the prices of…
A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…
Q: Does the government have implemented the Land Reform in the Philippines so that the landless would…
A: In the economy of Philippines, it can be seen that people were struggling with poverty and unfair…
Q: If the zero lower bound binds on a loanable funds graphs, then there is excess A. saving B. bank…
A: The total amount of money that persons and corporations in an economy have decided to save and lend…
Q: can you explan step by step how (100-q2)q2-10q2 turned into 100-2q2-10=100?
A: The profit function has been differentiated here.
Q: Suppose the U.S. has a closed economy with GDP (Y) equal to $20.0 trillion, consumption (C) equal to…
A: We have given components of GDP of an closed economy.
Q: Given Problem: A manufacturing plant wishes to buy a new equipment so the purchasing department did…
A: Given that; A company is considering two types of equipment for its manufacturing plant. The…
Q: Suppose that a labor economist performs a statistical analysis on economywide worker wages using…
A: The amount that is being to individuals for doing a certain amount of work for a specified period of…
Q: Average Fixed Average Average Total Total Product Cost Variable Cost Cost Marginal Cost $ 25.00 1 $…
A: Question first:The firm producer at MC=P if P>AVCP=68.10, MC=68.07 then AVC=33 so the firm…
Q: (1) If you can choose freely among the Beveridge, Bismarck, and American health care system, which…
A: "Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Assume an hypothetical consumer faced by the following utility function; U=X^2Y ( squared times y).…
A:
Q: List and explain three reasons for strong barriers to entry that make it difficult for new firms to…
A: In competitive firms, there are either no barriers to entry or very less barriers to entry that…
Q: (Q#1) A family finds itself experiencing a rash of unexpected medical |problems that prove costly…
A: We will answer the first question since the exact one was not specified. Please submit a new…
Q: Which of the following is not correct? In a labor market, the wage adjusts to balance the supply and…
A: Equilibrium wage is determined by the market forces of demand and supply of labor. Marginal product…
Q: In an economy with commercial banks with the required ratio of the reserve to deposit of 0.2, an…
A: Total units generated = Initial deposit * Money multiplier
Q: n investor buys a land for PhP 1M and constructs a three-door apartment for udents worth PhP 5M. He…
A: NPV is a strategy used to decide the ongoing worth of all future cash flows created by an…
Q: Question 7 Suppose there are two types of individuals: Low demand individuals with demand Qp(P) =…
A: An individual's demand for a product or service is known as individual demand (or a household). This…
Q: private domestic savings = $1220, the trade deficit = $90. Find private %3D %3D
A: Gross private domestic investment, or GPDI, is a measure of the amount of money that domestic…
Q: The characteristic of money as a store of value implies: a. Money will remain valuable from one day…
A: There are four functions of money: medium of exchange, store of value, standard of deferred…
Q: Wakanda is a firm that solely supplies vibranium to Marley and Paradis. The demand function of the…
A: There are two market with different market demand functions and firm is able to discriminate.
Step by step
Solved in 2 steps
- Following the COVID-19 pandemic, central banks have committed to keepingshort-term interest rates low to stimulate economies and financial markets, evenas the recovery gains traction. Discuss the implications of this commitment by thecentral-bank on a Takaful Operator’s investment performance and providerecommendations on how it should restructure its asset classes so to continuemeeting expected returns?Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of between 20 and 25 percent; another $10 billion yielding between 15 and 20 percent; another $10 billion yielding between 10 and 15 percent; and so forth. a. Cumulate these data and present them graphically using the graph below, putting the expected rate of return (and the real interes rate) on the vertical axis and the amount of investment on the horizontal axis. Instructions: Use the tool provided 'ID' to plot the investment demand curve (plot 6 points total). 30 Tools ID 20 15 10 10 20 30 40 50 60 Investment (billions of dollars) Instructions: Enter your answers as a whole number. b. What will be the equilibrium level of aggregate investment if the real interest rate is: 15 percent: $ billion 10 percent: $ billion 5 percent: $ billion Expected rate of return, percent 25. What are the various factors that affect the cost ofmoney and hence interest rates? How will changesin these components affect asset prices?
- Mr. Pierpont has wealthof $200,000. He wants to keep at least $80,000 in bonds at all times, and will shift $10,000 into bonds from his checking account for each percentage point that the interest rate on bonds exceeds the interest rate on his checkingaccount. Currently, he keeps $100,000 in bonds, which pay him 7%. What is the current interest rate on checking accounts?A) 5%B) 7%D) 10%C) 9%Could you expnad on how you got the equilibrium interest rate value? i don't get 0.065 when is solve the euqation 900 = 50/(1+i) + 50/(i+1)^2 + 1000/(1+i)^2. Also, my answer from plugging into the equation i part a. to find the demand and supply at YTM = 0.05, doesn't match using the same equation to get the answer?The following table shows the average nominal interest rates on six-month Treasury bills between 1971 and 1975, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 1971 to 1975. (All rates are rounded to the nearest tenth of a percent.) Nominal Interest Rate Inflation Rate Year (Percent) (Percent) 1971 4.5 4.2 1972 4.5 3.3 1973 7.2 6.3 1974 8.0 11.0 1975 6.1 9.1 Source: "FRED Economic Data," Federal Reserve Bank of St. Louis, last modified September 23, 2019, accessed September 24, 2019, https://fred.stlouisfed.org. On the following graph, use the orange points (square symbol) to plot the nominal interest rates for the years 1971 to 1975. Next, use the green points (triangle symbol) to plot the real interest rates for those years. 8.0 7.0
- Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of between 20 and 25 percent; another $10 billion yielding between 15 and 20 percent; another $10 billion yielding between 10 and 15 percent; and so forth. a. Cumulate these data and present them graphically using the graph below, putting the expected rate of return (and the real interest rate) on the vertical axis and the amount of investment on the horizontal axis. Instructions: Use the tool provided 'ID' to plot the investment demand curve (plot 6 points total). 30 Tools ID 20 15 10 10 20 30 40 50 60 Investment (billions of dollars) Instructions: Enter your answers as a whole number. b. What will be the equilibrium level of aggregate investment if the real interest rate is: 15 percent: $ billion 10 percent: $ billion 5 percent: $ billion Expected rate of return, percent 254. Ann has $600,000 that she could consume or leave as a bequest to her daugh- ter. Plotting her consumption (C) on the horizontal axis and the bequest (B) 3B on the vertical axis, Ann finds that her indifference curves have slope Distrusting banks, she keeps her wealth in the form of gold. Thus her wealth earns no interest but is protected from inflation. Her bequest to her daughter C is (a) $150,000 (b) $200,000Figure 10-6 Real interest rate 6% 5 4 3 2 1 0 30 Select one: O O O O 60 90 _____ 120 150 a. supply; rise; decreasing; increasing b. supply; fall; increasing; decreasing c. demand; fall; decreasing; decreasing d. demand; rise; increasing; decreasing 180 will Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above. As a result of an increase in the government budget deficit, the thereby the equilibrium real interest rate and the equilibrium quantity of loanable funds. S Quantity of loanable funds (millions of dollars) for loanable funds
- Question 38 Long-term bonds are generally I less risky than short-term bonds and so pay higher interest. less risky than short-term bonds and so pay lower interest. more risky than short-term bonds and so pay higher interest. more risky than short-term bonds and so pay lower interest. Question 39 On which bond is default most likely? P Type here to search 40 i3 esc (@ %23 LOIf consumers spend of a change in their disposable income, then a tax increase of $100 would lower saving by $40. O 20 percent 40 percent O 60 percent O 80 percent 70 percentAccording to the table, in which year did buyers of six-month Treasury bills receive the highest real return on their investment? O. 1971 O. 1972 O. 1973 O. 1974 O. 1975