Neoclassical model of investment

Assignment Help Business Economics
Reference no: EM132284450

Neoclassical Model of Investment

In class, we discussed the idea of net investment, and how it could change in response to changes in economic conditions. Consider the following potential changes in the economy and discuss what the immediate impact of these changes will be for the rental price of capital, the cost of capital, and net investment.

(a) Anti-inflationary monetary policy raises the real interest rate (r ↑)

(b) An earthquake destroys part of the capital stock (K ↓)

(c) Immigration of foreign workers increases the size of the labor force (L ↑)

(d) Advances in computer technology make production more efficient (A ↑)

Reference no: EM132284450

Questions Cloud

What are the subgame perfect nash equilibrium strategies : Assume that the parents repeat this game for 52 weeks. What are the Subgame Perfect Nash Equilibrium strategies? What is the SPNE outcome?
About becoming passionate leader : Suppose a college student graduates with a major for which he/she lacks enthusiasm. What might this person do about becoming a passionate leader?
How do the two articles support the nurse practice issue : How do these two articles support the nurse practice issue you chose? Discuss how these two articles will be used to answer your PICOT question.
What is m-l condition and how it is related to j-curve : This relation is described by the J-curve. What is M-L condition and how it is related to J-curve?
Neoclassical model of investment : In class, we discussed the idea of net investment, and how it could change in response to changes in economic conditions. Consider the following potential
Analyze the parameters of a project : Resource planning is an important task that every manager must go through to effectively analyze the parameters of a project.
Evaluate how to motivate individuals and teams to achieve : Evaluate the relationship between culture, politics, power and motivation that enables teams and organisations to succeed providing justified recommendations
Impact on any of elements of the balance sheet : Some events that occur within a business do not have an impact on any of the elements of the balance sheet. Why?
Defensive medicine in the us health care : OB/GYN physicians always face the highest malpractice insurance premium. Why? Does it just come from the higher risk of OB/GYN

Reviews

Write a Review

Business Economics Questions & Answers

  Amount of previous workers

1. According to the principle of diminishing returns, if the number of workers is increased beyond the point of diminishing returns, then the additional worker:

  Cause leftward shift in the demand curve for good

Assuming other things equal, which one of the following changes could cause a leftward shift in the demand curve for good C?

  Turn monopolist in respective markets

A monopoly supplier of a good sells its product to two firms who are in turn monopolist in their respective markets.

  What is the efficient level of production of the public good

There are three consumers of a public good. The marginal willingness-to-pay for the consumers are as follows: What is the efficient level of production of the public good?  What is the efficient level of production of the public good? Propose an alte..

  Issues of property ownership in cyberspace

1. What are some issues of property ownership in cyberspace? 2. Do we need to recognize the power of information in a larger environment?

  Compared with fiscal policy and monetary policy

If the government increases taxes in response to an inflation, the government is engaging in what economists call. Compared with fiscal policy, monetary policy is:

  Pros and cons of a budget deficit and the national debt

How will a cut in Government Spending of $300 billion with a MPC equal to .75 impact AD, inflation, and output? Why? Make sure to include the appropriate equations and graph. How does the cut in Government spending impact the budget deficit and the n..

  Marginal rate of substitution

Marginal rate of substitution between leisure as well as labor as well as the marginal product of labor in the Robinson Crusoe model.

  How this policy should have affected the of meat

U.S. government price supports for milk led to an unceasing surplus of milk. In an effort to reduce the surplus about a decade ago, Congress offered to pay dairy farmers to slaughter cows. Use two diagrams, one for the milk market and one for the mea..

  Explain how many units of labour should firm hire

Suppose capital is fixed at 16 units. If firm can sell its output at a price of $100 per unit and can hire labour at $25 per unit, Explain how many units of labour should firm hire in order to maximize profits.

  Evidence is enough to reject the salespersons claim

A life insurance salesperson claims the average worker in the city of Cincinnati has no more than $25,000 of personal life insurance. To test this claim, you randomly sample 100 workers in Cincinnati. You find that this sample of workers averages $26..

  Elucidate how many popsicles will be sold

Consider the elasticity of supply. In the short run, a elucidate how many popsicles will be sold each day in the short run if the price rises.

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!

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