User Account

All Pages

Output and depreciation and interest payments

Assignment Help Macroeconomics
Reference no: EM132476880

Consider the following information about a firm:

Marginal product of capital in the next year: MPK = 206 - 4K units of output per additional unit of capital per year

Real interest rate: r = 0.05 per year

Depreciation rate of capital: d = 0.10 per year

Price of capital: pK = 200 units of output per unit of capital

Capital stock at beginning of year: K0 = 40 units of capital

Assume now there is a 40% tax on firms' output and depreciation and interest payments are not tax deductible. What is the desired level of the capital stock at the beginning of the next year?

Reference no: EM132476880

Questions Cloud

Write down samantha budget constraint in period : Write down Samantha's budget constraint in period 1 and period 2 and her intertemporal budget constraint.
Quantities of mobile phones or pounds of wheat : You need to make a similar table that will show how many quantities of mobile phones or pounds of wheat each country can gain from trading with each other.
Calculate how much alpha corporation should report : Calculate how much Alpha Corporation should report for 2017 basic earnings (loss) per share for income (loss) from continuing operations.
Distributed between wages and profits : After paying $5, 000 for the cost of an imported car, the remaining sales revenue is equally distributed between wages and profits.
Output and depreciation and interest payments : Assume now there is a 40% tax on firms' output and depreciation and interest payments are not tax deductible. What is the desired level of the capital stock
Factoring in the interest rate and gdp deflator : What formula is used to measure real gain using nominal GDP amounts from one year to the next as well as factoring in the interest rate and GDP deflator?
Current level of the federal budget deficit : Discuss the current level of the Federal budget deficit and the implications of the deficit. Support a proposal for addressing these concerns.
How will the supply curve and demand curve shift : How will the supply curve and demand curve shift if the government raises personal income taxes, without considering the change in consumer saving?
How will the supply curve and demand curve shift : How will the supply curve and demand curve shift if business investors become more optimistic about the economy.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

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