Investment (i): spending by firms on new factories, office budilidngs, machiner and inventories, and spending by households on NEW houses. 3. Government purchases (G): Spending by federal, state and local governments on goods and services. 4. Net exports (NX: The value of exports minus the value of imports.
The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percent)? The rental price of capital?
Intrinsic value is the sum of all the future expected free cash flows converted into today’s dollars. i. Who are the providers (savers) and users (borrowers) of capital? How is capital transferred between savers and borrowers? The providers (savers) are households and the U.S. government when it runs a surplus.
Page 484 has formulas!! 6. When the firms maintains a target leverage ratio, we compute its levered value V^L as the present value of its free cash flows using the WACC, whereas its unlevered value V^U is the present value of its free cash flows using its unlevered cost of capital or pretax WACC. 15.3 Recapitalizing to Capture the Tax Shield 1. when securities are fairly priced, the original shareholders of a firm capture the full benefit of the interest tax shield from an increase in leverage 15.4 Personal
This is the sum of cost of all the final products and services sold in any economy. There are categories of final products and services. The largest portion of the GDP is purchases by private consumers, from clothes and food to homes and cars, and services purchased such as utilities, housekeeping, and entertainment. Investment purchases done by companies and government spending are the other categories of the GDP. Also included in the sum are the net exports; the total exports minus the imports.
Measuring Economic Health Memo * In this writing, I will describe the use of gross domestic product to measure the business cycle, describe the roles of government bodies that determine national fiscal policies, explain the effects of fiscal policies on the economy’s production and employment. Finally I will talk about how do changes in government spending and taxes positively or negatively affect the economy’s production and employment. Gross domestic product, the official measure of total output of goods and services in the U.S. economy, represents the capstone and grand summary of the world's best system of economic statistics. The federal government organizes millions of pieces of monthly, quarterly, and annual data from government agencies, companies, and private individuals into hundreds of statistics, such as the consumer price index (CPI), the employment report, and summaries of corporate and individual tax returns. The U.S. Department of Commerce then marshals the source data into a complete set of statistics known as the National Income and Product Accounts.
Ratio analysis for TRI illustrates conservative debt levels and ability to service additional debt. By borrowing $17,450,000 to invest in production equipment and technologies, liquidity ratios change little. Similarly, solvency ratios change little except for the free cash flow ratio, affected by capital expenditures but not offset by loan proceeds in the calculation. Profitability ratios will realize improvements; gross profit ratios will increase from reduced labor costs. Net income ratios benefit from improved gross profit calculations but also include increased interest and depreciation expense from the new loan and equipment, lowering net income.
c. Suppose government imposes a tax equal to the marginal external cost. What is the equilibrium price paid by consumers and the equilibrium quantity after implementation of the tax? d. At the output level in part (c), how much is the tax? e. How much tax revenue does government collect? f. What is the deadweight loss borne by society if the externality is left uncorrected?
Running head: INTERNATIONAL PAPER International Paper ECO561 / Economics International Paper Introduction Identify and Justify Macroeconomic Measures for Pricing and Output The economy is measured based on annual total output of goods and services and is called the gross domestic product or GDP. (McConnell, 112) Additionally the GDP shows what each sector or industry pays for the goods and services it receives. Based on data provided in the Bureau of Economic Analysis’ Industry Economic Accounts, we know that the gross output for the motor vehicle industry is significantly higher than Big Drive Auto’s output. (www.bea.gov) There are several different factors that could impact why Big Drive is lower than the national average. These include potential differences such as the amount of local competition, the local economy, and possible higher unemployment rates all of which lead to less disposable personal income.
A. HEADLINE INDICATOR 1. Real GDP per capita growth rate Real GDP per capita is a measurement of the total economic output of a country divided by the number of people and adjusted for inflation. This economic indicator has three important concepts. First is GDP, or Gross Domestic Product.