User Account

All Pages

How does this affect geoff incentive to borrow

Assignment Help Macroeconomics
Reference no: EM132482781

Suppose Geoff considers borrowing $100 from Tracey. They both think that a 4 percent real interest rate would be fair, but they are aware of a 30 percent interest income tax. Therefore, they think of the fair 4 percent real interest rate as an after-tax rate. How much should Geoff pay to Tracey in interest, such that the after-tax real interest rate would be 4 percent, if they expect inflation to be 6 percent? What if the expected inflation was 8 percent? How does this affect Geoff's incentive to borrow?

Reference no: EM132482781

Questions Cloud

Determine the amount of factory overhead : During March, 5,750 hours were actually worked. Use this information to determine the amount of factory overhead that was (over) or under applied
Current high federal government budget deficits : What are the short- and long-term economic benefits and costs associated with our current high federal government budget deficits?
ASB 4426 Contemporary Issues in Management Assignment : ASB 4426 Contemporary Issues in Management Assignment help and solution, Bangor University - assessment writing service - critical reflection on personal
Determine the amount of factory overhead : During the month of February 2019, actual direct labor hours of 8,900 were incurred. Use this information to determine the amount of factory overhead
How does this affect geoff incentive to borrow : If they expect inflation to be 6 percent? What if the expected inflation was 8 percent? How does this affect Geoff's incentive to borrow?
What its cost of revenue in the income statement : If a company is a consulting company, what's its cost of revenue in the income statement? (For example, the office rent expense, the salary for the non-officer)
Why do you think that deloria reached the conclusion : Vine Deloria Jr in Custer Died for Your Sins discusses Termination in chapter 3. Deloria writes, "In Practice, termination is used as a weapon against.
Equilibrium price and quantity at the medium level : What are the equilibrium price and quantity at the medium level of demand (DM)?
Do you think clean water is public health : After reading the chapter and reviewing the Power Point slides perform the following activities. Interview two people and ask them what Public Health is?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Cange in quantity of hybrids change in in price of gas

change in quantity of hybrids change in in price of gas 0.25 change in quantity of suvs change in price of gas

  Cyclical unemployment in the us

Topic of Cyclical unemployment in the U.S. must Utilize a minimum of three scholarly sources.

  Complement or a substitute for good

a) Let the price of good Y be $1 per unit and Erin's income be M. Draw the diagram that illustrates the situation described above. b) How does Erin's expenditure on good X respond to changes in the price of good X? c) Is good X a complement or a su..

  Which industry is capital-intensive

Leontief's paradox is an example of testing a trade model using actual data observations. If Leontief had observed that the amount of labor needed per $1.

  Suzie purchases two goods- food and clothing she has a

suzie purchases two goods- food and clothing. she has a utility function u9xy0 xy where x denotes the amount of food

  Equilibrium price-equilibrium quantity

Assume that these firms behave under the rules of perfect competition.Using diagrams, derive the market supply curve for this industry. Market demand is given by D= 120 - 2.75p. Solve for equilibrium price, equilibrium quantity and the quantity su..

  Illustrate the maxmium so and so would pay for insurance

Illustrate the maxmium so and so would pay for insurance.

  Illustrate what happens if there is an raise in demand

Illustrate what happens if there is an raise in demand that increases the price of the firm's product by 10%.

  Define the reservation wage

MAE304 Labor Economics Assignment. Define the reservation wage. Derive it for the worker. Hint: Normalize the price of other goods to 1, and find the MRS

  What is the relation between changes in interest rates

What is the CGAP effect? According to the CGAP effect, what is the relation between changes in interest rates and changes in net interest income when CGAP is positive? When CGAP is negative?

  Audit a national retail chain

Consider this scenario. You work for an auditing company. You have been asked to audit a national retail chain. Select one access device and one instance of application software which could be used by the retail chain to produce documents.

  Obtain data on key macroeconomic indicators

BUS700 ECONOMICS ASSIGNMENT. King's Own Institute. Obtain data on key macroeconomic indicators: real GDP growth, interest rates

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd