Reference no: EM131244299
1. A person borrows $10,000 today at a nominal interest rate of 5%; inflation for the past 10 years has always been 2%. Today, inflation instantly rises to 7% and stays that way for the duration of the loan. Based on the above information, ceteris paribus (all else equal), today:
a. you will pay the lender back exactly $10,700.
b. the real rate of interest on your loan is 14%.
c. the real rate of interest on your loan was previously 10% and is now 35%.
d. the real rate of interest on your loan is now –2%.
e. you will pay the lender back exactly $9,500.
2. The Harrod-Domar model is based on the following assumption(s):
a. the marginal product of capital is constant.
b.the marginal product of capital is not constant.
c. saving is greater than productive investment.
d. saving is less than productive investment.
Elasticity of demand magnitude of consumer response
: Explain the relationship between the elasticity of demand, the magnitude of consumer response, and the amount of revenue collected by the tax.
|
Equivalent to in real terms
: Given: CPI in 1988 = 116.9 and CPI in 2013 = 234.3. If the starting salary for a new MBA in 1988 was $48,000, what amount in 2013 would that be equivalent to in real terms?
|
Supply and demand together create the wind turbine market
: Suppose we are examining the market for 240-foot industrial wind turbines. Consumers (buyers) of these wind turbines use them to generate electricity. For this analysis, we are interested in the demand for wind turbines and the supply of wind turbine..
|
In the solow model-population growth determines
: Given: Inflation rate in Macroland was 4.5% in 2009, -2.7% in 2010, and -1.8% in 2011. Determine whether each of the following statements is true or false: In the Solow model, population growth determines:
|
The harrod-domar model is based on the assumption
: The Harrod-Domar model is based on the following assumption(s): A person borrows $10,000 today at a nominal interest rate of 5%; inflation for the past 10 years has always been 2%. Today, inflation instantly rises to 7% and stays that way for the dur..
|
In the loanable funds market-each dollar borrowed
: In the loanable funds market, each dollar borrowed: Because businesses are the primary:
|
Influenced the slope of the phillips curve
: The slope of the Phillips curve: Draw a graph with a steep Phillips curve and a graph with a gently sloped Phillips curve. Explain how the two economies respond differently to a boom and to a slump. What are some factors that might influenced the slo..
|
Evaluate a real situation between two actors
: Evaluate a real situation between two actors; it could beany scenario: two competing businesses, two countries in negotiations, two kids trading baseball cards, you and another person involved in an exchange or anything else. Use game theory to analy..
|
What is the budget constraint
: Freddy the Meek has $36 to spend on waffles W and French Toast F. The prices are $3 and $4, respectively. What is the budget constraint? How many more waffles does an additional dollar spent on W buy? How many more French Toasts does an additional do..
|