Outside of residential investment and on real interest rate

Assignment Help Business Economics
Reference no: EM131090335

Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outside of residential investment and on the real interest rate? (Hint: treat investment as residential investment + other investment.)

Reference no: EM131090335

Questions Cloud

What is the firm marginal cost : Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL =(K^1/2)/(2L^1/2) , and MPK =(L^1/2)/(2K^1/2). Suppose the price of labor is w = 25, and the price of ..
Aggregate supply and demand with upward sloping sras curve : Why does the SRAS slope upward to the right. What exogenous force determines the overall position of this upward sloping curve on the graph? Show how this decision would affect the SRAS, price level and income level on your graph from the short run i..
Economy has marginal propensity to consume : Your economy has a marginal propensity to consume (MPC) of 0.70. It is currently operating at a level at less than full employment. Prices appear to be sticky in this economy, but by some lucky stroke the rate of interest falls. Using the Keynesian C..
Define strategic competitiveness and above-average returns : Define strategic competitiveness and above-average returns. What is the relationship between strategic competitiveness and returns on investment? Explain why it is important for organizations to analyze and understand the external environment. Descri..
Outside of residential investment and on real interest rate : Assume changes in regulation make it easier for households to get mortgages from banks. Seeing this, firms find it more profitable to build more houses, so residential investment increases. What effect do you think this might have on investment outsi..
Several internal and external assessment methods : Several internal and external assessment methods were discussed within this unit. Identify and discuss three internal assessment methods that you feel are most effective and three that you feel are least effective. Identify and discuss three external..
Pay for such security having principal value : A 5 year treasury note has a coupon rate of 2.50%. What price would you pay for such a security having a principal value (par value) of $1 million if the current interest rate is 2.25%? The current interest rate is 3%? (to simplify the calculations, ..
Which is the most socially desirable : Humphrey and Lauren are splitting 10 gallons of soda and six pounds of popcorn. Let’s represent Humphrey’s preference with the utility function UH = 3SH + PH and Lauren’s preferences with UL = 2SL + 4PL, where SH and SL indicate their soda consumptio..
The concept quantity demanded : The concept "Quantity Demanded":

Reviews

Write a Review

Business Economics Questions & Answers

  Two types of workers stars and everyone else

Suppose there are two types of workers, "stars" and "Everyone else" and both of them would like jobs at investment banks like SG Cowen. Productivity equals 100,000 for the stars, and 50,000 for everyone else. 80 percent of workers in the population a..

  Transaction are included in the GDP calculations for year

Which of the below transaction(s) are included in the GDP calculations for the Year of 2012?

  Calculate the promised YTM on the SHELL bond

Assume that SHELL, Corp. Coupon bond currently sells for $5,800. Bond has a 5 year maturity, an annual coupon payment of $261, and a future value of $5,800. What is the promised yield to maturity on SHELL bond? Calculate the promised YTM on the SHELL..

  The real exchange rate shows

The real exchange rate shows

  What should be the quantity sold

If it decreases the price to $63, what should be the quantity sold? Will revenue increase? Why? Show all work

  Find the current price

Hollow just paid a dividend of $1.68.They expect dividends to grow at 10% for the next 3 years. After year 3, the growth rate will fall to the industry average of 3%.If the required return is 8%, find the current price.

  Describe the amount of output produced by stone company

describe the amount of output produced by Stone Company. How much profit will Stone Company make when it acts as a monopolist.

  Two alternative investment proposals

Two alternative investment proposals are under consideration for a vacant owner by Urban Development Corporation. Plan A would require an immediate investment of $120,000 and first-year expenditure for property taxes, maintenance, and insurance of $4..

  Effective employee communications

Why is there currently an even greater need for effective employee communications? Describe some efforts made by U.S. firms that demonstrate the uniquely American concept of corporate social responsibility (CSR). Provide examples to support your  ans..

  Solution to principal-agent problem ensures

The solution to principal-agent problem ensures that the firm is operating

  Why do five pillars of islam make it an ideal religion

Why do five pillars of Islam make it an ideal religion for a nomadic people. Why did African rivers turn out to be a disappointment to European colonial powers.

  How much tax revenue will this excise tax yield government

Suppose the equation for the demand curve for some product (X) is P = 8 - .6Q and the supply curve is P = 2 + .4Q. What is the equilibrium price and quantity? Now, suppose an excise tax is imposed on good X such that the new supply equation is P = 4 ..

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