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Sally Stanford is buying an automobile that costs $12,000. She will pay $2000 immediately and the remaining $10,000 in four annual end-of-year principal payments of $2500 each
Pine Village needs some additional recreation fields. Construction will cost $225,000 and annual O&M expenses are $85,000. The city council estimates that the value of added youth leagues is about
An asset with a 8-year ADR class life costs $50,000 and was purchased on January I, 2001. Calculate any depreciation recapture, ordinary losses, or capital gains associated with selling the equipment
An engineer wishes to have $5 million by the time he retires in 40 years. Assuming 15% nominal interest, compounded continuously, what annual sum must he set aside?
Every college student had the problem of selecting the college or university to attend. Was this a simple, intermediate, or complex problem for you? Explain.
Desoto seated in a Barcelona cafe drinking absinthe. The painting was done in 1903 and valued then at $600. If the painting was owned by the same family until its sale in 1995, what rate of return did
A friend was left $50,000 by his uncle. He has decided to put it into a savings account for the next year or so. He finds there are varying interest rates at savings institutions
A student bought a $75 used guitar and agreed to pa for it with a single $85 payment at the end of 6 months Assuming semiannual (every 6 months) compounding, what is the nominal annual interest rate?
In Keynes’s analysis of the speculative demand for money, what will happen to money demand if people suddenly decide that the normal level of the interest rate has declined? Why?
Many economists are worried that a high level of budget deficits may lead to inflationary monetary policies in the future. Could these budget deficits have an effect on the current rate of inflation?
The more credible the policymakers who pursue an anti-inflation policy, the more successful that policy will be. Is this statement true, false, or uncertain? Explain your answer.
A bank advertises it pays 7% annual interest, compounded daily, on savings accounts, provided the money is left in the account for 4 years. What effective annual interest rate do they pay?
If the Fed sells $2 million of bonds to the First National Bank, What happens to reserves and the monetary base? Use T-accounts to explain your answer.
If a country wants to keep its exchange rate from changing, it must give up some control over its money supply. Is this statement true, false, or uncertain? Explain your answer.
Compare the use of open market operations, discounting, and changes in reserve requirements to control money supply on the following criteria: flexibility, reversibility, effectiveness, and speed of i
Compare the monetary base to M2 on the grounds of controllability and measurability. Which do you prefer as an intermediate target? Why?
Classify each of the following as either an operating target or an intermediate target, and explain why.
Because the public can see whether a central bank hits its monetary targets almost immediately, whereas it takes time before the public can see whether an inflation target is achieved
Because inflation targeting focuses on achieving the inflation target, it will lead to excessive output fluctuations. Is this statement true, false, or uncertain? Explain your answer.
A country is always worse off when its currency is weak (falls in value). Is this statement true, false, or uncertain? Explain your answer.
A central bank with a dual mandate will achieve lower unemployment in the long run than a central bank with a hierarchical mandate in which price stability takes precedence. Is this statement true, fa
Select ONE of these lessons (principles), (the standard of living depends on a country's production)and explain a/some pattern/s of behaviour that you have observed in the media (newspapers, televisio
Suppose that output increases to 209. Redo the calculations in (a) and (b). Explain (in terms of savings and investment) the reason for the interest rate change.
In the national income accounting identity showing the equality between national saving and investment, what is the representation of private saving and what is the representation of public saving?&nb
Stabilization policy holds that during periods of poor economic performance government should engage in expansionary policies but during periods of poor economic performance government should engage i