User Account

All Pages

Write down the definition of the current account

Assignment Help Business Economics
Reference no: EM133134193

The Cyclicality of the Current Account2 Precautionary Savings Pick a country besides the United States. Find data on their current account, as a fraction of GDP, over time, as well as the annual GDP growth of that country. Make sure you haveat least 20 years of data. Is the current account procyclical, countercyclical, or is it not clear from the data?Present a figure that demonstrates your conclusion. Make sure to format it enough so that a casual reader would agree.

Suppose an agent is trying to maximize utility

U = log c1 + β(π log cb + (1 -π) log cr)log is the natural log. GDP is as follows: y1 = 2000, yb = 2240, yr = 1400, π = .8β = .8 and 1 + r = 1.25. The only asset available is the riskless bond.

1. Write down the definition of the current account, that relates y, x and c in each state.

2. How does x1, xb and xr relate?

3. Plug those equations into the maximization problem and take first order conditions4. What is the Euler equation?

5. Solve for x1.Now instead, imagine there was a world without risk. Instead of being uncertain about
y, the country knew they would gety2 = 2240 ×.8 + 1400 ×.2 = 2072

6. What is the Euler equation now?7. What is x1?

8. Did risk lead to a higher or lower current account?

Reference no: EM133134193

Questions Cloud

Major operating expenses of airlines : "That are the three major operating expenses of airlines?
Biggest competitor for your favorite brand : Who is (/are) the biggest competitor(s) for your favorite brand ( doc martens) and/or product?
What is the main conclusion of the argument : Is there an argument? If so, what is the main conclusion of the argument?
Social media affect competition in marketplace : How does social media affect competition in the marketplace?
Write down the definition of the current account : The Cyclicality of the Current Account2 Precautionary Savings Pick a country besides the United States. Find data on their current account, as a fraction of GDP
Consumer buying process : Which stage of the consumer buying process do you believe leads most directly to a consumer's purchase decision? Explain your reasoning.
Unstructured versus a structured issue : Explain how the decision process changes when a manager is faced with an unstructured versus a structured issue.
Industrialization strategies pursued by developing countries : There had been significant transformation in terms of the industrialization strategies pursued by developing countries. In your opinion, what would be the best
Determine the depreciation expense for year two : Equipment with a cost of $120000, an estimated residual value of $5000, Determine the depreciation expense for year two

Reviews

Write a Review

Business Economics Questions & Answers

  Calculate autonomous spending

Use the informat below to answe the questions below. C= 400 + 0.6YI= 500

  Develop arguments from managerial economics perspective

The concentration game: Canada has an oligopoly problem--and we need to fix it Recommendations:

  MBA727 International Business Management Assignment Problem

MBA727 International Business Management Assignment help and solution, Modern College of Business and Science, Assessment help -FOREIGN DIRECT INVESTMENT

  Fixed proportions production function

Suppose an automobile manufacturer has a fixed proportions production function that requires it always uses 2 workers and 1 machine to produce 1 car belt. If the wage rate w = $10 and rental rate are r = $15. What is the cost-minimizing combination o..

  Aggregate supply-aggregate demand and gdp price index

A nation in recession reduces the both the personal and business marginal tax rates. What is the likely short-term effect on government deficit (or surplus), aggregate supply, aggregate demand, and GDP price index?

  What is the rationale for the push for net neutrality

Identify and explain 2 ways social media undermines a unified public education on public issues such as COVID-19 with supporting examples.

  Destroys part of the nation capital stock

Q1. Suppose that there is a natural disaster that destroys part of the nation's capital stock. a. Determine the effects on aggregate output, consumption, employment, and the real wage, with a reference to income and substitution effects and explain..

  Accounting profit is greater than marketing costs

Regarding microeconomics, which of the following statements is correct? accounting profit is greater than marketing costs. accounting profit is different from economic profit. accounting costs include opportunity costs. economic profit is less than p..

  What is the statutory incidence of the tax

What is the statutory incidence of the tax? What will be the economic incidence of the tax?

  Change in fiscal policy to changes in interest rates

Describe the mechanism that leads from a change in fiscal policy to changes in interest rates, the exchange rate, and the current account balance. Do the same for monetary policy.

  What rate of return per year did the company make

A company that manufactures brushless blowers invested $650,000 in an automated quality control system for blower housings. The resultant savings was $160,000 per year for 5 years. If the equipment had a salvage value of $50,000, what rate of return ..

  Bonds instead of domestic financial instruments

Discuss why an investor might be interested in foreign stocks and bonds instead of domestic financial instruments. What are the dangers of such purchases?

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