(4 marks) c) Setting MRS=MRT, solve the resulting equation algebraically for l as a function of G. (6 marks) d) What happens to consumption, wages and output as G increases? (6 marks) Question 2: Now consider the same representative agent, but subject to a proportional tax, so that the budget constraint is now C = (1 − t) z (1 − l) where t is the tax on wages. Assume z=1. a) Solve for labour supply as a function of t. (6 marks) b) Now assume that there is a target level of government spending, with a balanced budget: G = tz(1 − l) What is the value of t that maximizes tax revenue G? (6 marks) 1 City University London Intermediate Macroeconomics 1 Joe Pearlman c) Sketch the Laffer curve for values of t from 0 to 1.
Below is the relationship of their speed and stopping distance. Speed (mi/h) | 5 | 10 | 15 | 20 | 25 | Stopping Distance (ft) | 7 | 17 | 30 | 46 | 65 | A linear regression shows the relation in a scatter plot of data. The regression is represented by a straight line entered to the graph to show how strong the correlation is. A quadratic regression is a parabola that shows the relation between data on a scatter plot, to show how strong the correlation is. To find out whether a linear regression or a quadratic regression organized the data more accurately I calculated each regression on my calculator and looked at which correlation coefficient was stronger.
Chapter 3 3. Suppose the demand function for a firm’s product is given by In Qxd= 7 – 1.5 In Px + 2 In Py – 0.5 In M + In A Where Px= $15 Py= $6 M= $40,000 A= $350 a. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unitary elastic The own price of elasticity is -1.5. The absolute value of -1.5 is greater than 1 so demand is elastic. b.
A. 6% B. 5% C. 7% D. 8% 14) The present value of a single future sum A. increases as the number of discount periods increase B. is generally larger than the future sum C. depends upon the number of discount periods D. increases as the discount rate increases 15) Which of the following is considered to be a spontaneous source of financing? A. Operating leases B.
The values in Table 2 are the weights of the risk-free asset and the risky assets in the optimal combined portfolio for a given holding period and risk-aversion level. The table also shows the expected return and standard deviation about that return for each portfolio. The third row of results shows that for a one-year holding period and a “middle level” of risk aversion, the optimal allocation is 82.2% in the risk-free, 10.4% in T-Bonds, 4.5% in World Bonds, 1.7% in Large Stocks and 1.2% in Small Stocks. This portfolio’s expected return is 1.42% and its standard deviation is 1.43%. Similarly the seventh row of results shows that for a five-year holding period and a “middle level” of risk aversion, the optimal allocation is 40.2% in the risk-free, 41.4% in T-Bonds, 3.2% in World Bonds, 9.0% in Large Stocks and 6.3% in Small Stocks.
A. Equally likely probability of a success. B. The probability of each outcome is between 0 and 1. C. Sum of the possible outcomes is 1.00.
The expected value of loss for risk B is larger than the expected value of loss for risk A. c. The standard deviation of expected losses for risk A is larger than the standard deviation of losses for risk B. d. The standard deviation of expected losses for risk B is larger than the standard deviation of losses for risk A. Answer: a Type: A Use this table to answer questions 4 through 7: |Loss Distribution X |Loss Distribution Y | |Outcome |Probability |Outcome |Probability | |$0 |.60 |$0 |.40 | |$1,000 |.25 |$1,000 |.50 | |$5,000 |.15 |$5,000 |.10 | 4. Which distribution has the highest expected value? a. Distribution X b.
Production is proportional to the stock of machinery. Growth Rate of GDP We want to determine the growth rate of GDP, which is defined as: G(Y) = (change in Y) / Y where Y = GDP To do this, we estimate the Incremental Capital-Output Ratio (ICOR), which is a measure of capital efficiency. ICOR = (change in K) / (change in Y) where K = capital stock A high ICOR implies a high increase in capital stock relative to the increase in GDP. Thus, the higher the ICOR, the lower the productivity of capital. Since capital is assumed to be the only binding production constraint, investment (I) in the Harrod-Domar model is defined as the growth in capital stock.
Give three rules/tests for recognising revenue. Item 4. Identify what category each of the following items would most usually fall in by indicating the correct category with an ‘X’: Current asset NonCurrent liability Long-term liability Equity current asset Accrual Asset revaluation reserve Accumulated deprecation Prepaid rent 5. An EU company listed on the London Stock Exchange should recognise its Brand name as intangible assets on its statement of financial position if …………………………….. 6. Set out the following balances in a published balance sheet, including all the titles and headings required.
C) 5.14%. Question 12 - #93617 www.LotBook.net Question 13 - #95440 A) 5.6%. B) 6.1%. C) 5.8%. Time-weighted returns are used by the investment management industry because they: A) result in higher returns versus the money-weighted return calculation.