1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Natasha_Volkova [10]
3 years ago
7

Consider a two-period endowment economy populated by identical house- holds with preferences defined over consumption in period

1, C1 and con- sumption in period 2, C2, and described by the utility function In C1 + E In C2, where C, denotes consumption in period 1, C2 denotes consumption in pe- riod 2, and E denotes the expected value operator. Each period, the econ- omy receives an endowment of 10 units of food. Households start period 1 carrying no assets or debts from the past (B* = 0). Financial markets are incomplete. There is a single internationally traded bond that pays the interest rate p* = 0. 1. Compute consumption, the trade balance, the current account, and national saving in period 1. 2. Assume now that the endowment in period 1 continues to be 10, but that the economy is prone to severe natural disasters in period 2. Sup- pose that these negative events are very rare, but have catastrophic effects on the country's output. Specifically, assume that with proba- bility 0.01 the economy suffers an earthquake in period 2 that causes the endowment to drop by 90 percent with respect to period 1. With International Macroeconomics, Chapter 6, July 31, 2019 223 probability 0.99, the endowment in period 2 is 111/11. What is the expected endowment in period 2? How does it compare to that of period 1? 3. What percent of period-1 endowment will the country export? Com- pare this answer to what happens under certainty and provide intu- ition. 4. Suppose that the probability of the catastrophic event increases to 0.02, all other things equal. Compute the mean and standard deviation of the endowment in period 2. Is the change in probability mean preserving? 5. Calculate the equilibrium levels of consumption and the trade balance in period 1. 6. Compare your results with those pertaining to the case of 0.01 prob- ability for the catastrophic event. Provide interpretation.

Business
1 answer:
anzhelika [568]3 years ago
4 0

Answer:

Explanation:

See attachment below

You might be interested in
The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and
oksano4ka [1.4K]

The given statement about the law of demand is false and the appropriate law is explained below.

<h3>What is Law of Demand?</h3>

This refers to the economic principle which states that when there is an increase in demand for a product, then the price of the good will decrease.

With this in mind, we can see that the law of demand works with  the supply of goods as if for example there is an increase in price for a particular bar of soap, then the demand reduces.

Read more about law of demand here:
brainly.com/question/1078785

5 0
2 years ago
Why net profit will be higher if increases average prices to customers?​
vampirchik [111]

Answer:

Higher prices with same sales quantity will mean greater profit.

Explanation:

Let's hold some variables constant. If a business sells books, and they take the prices up, if they sell the same quantity (at higher prices) this would increase revenues. Higher revenues, less the same cost structure (variable and fixed costs) will lead to a greater profit generation. Of course in the real world, price elasticity of demand comes in play when prices are changed. If prices go up, typically sales quantity will decrease and there may be a net effect in revenue and hence profit. In the simple case where prices go up and sales quantity is unaffected, net profit will rise.

6 0
3 years ago
"according to the ______ method of accounting, revenues are recognized when they are earned"
ZanzabumX [31]

Answer:

the correct answer is accrual-basis

Explanation:

"according to the accrual-basis method of accounting, revenues are recognized when they are earned"

good luck

6 0
3 years ago
The account "Warranty Liability": is adjusted at the end of the year. is credited each time a warranty repair is made. has a yea
Valentin [98]

Answer:

The account "Warranty Liability":

is adjusted at the end of the year

4 0
3 years ago
As the purchasing manager of a company that designs costumes, Natalie orders yards of fabric in preparation for Halloween. Natal
erastova [34]

Answer:

Inbound logistics

Explanation:

Logistics can be defined as the control of the movement of things between the point of inception and the point of consumption to meet the needs of different customers or corporations. The resources that are controlled in logistics include substantial goods such as materials, equipment, and supplies, and also other consumer goods.

Inbound logistics refers to the collecting, moving, facillitating, storage, and receiving of goods that comes into the business.

3 0
3 years ago
Other questions:
  • What is one argument in favor of the wealth gap? the lower classes have the opportunity to invest. poor people can easily move i
    5·2 answers
  • The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price
    11·1 answer
  • You are the primary system administrator for a large Active Directory domain. Recently, you have hired another system administra
    14·1 answer
  • Let assume that the reserve ratio is 15% and there is an additional reserve of $400. How much extra money supply can be created
    7·1 answer
  • Why is compounding interest monthly better than yearly ?
    7·1 answer
  • What impact can good accountability mechanisms have on the admissibility of evidence in court cases? enables encryption of the e
    15·1 answer
  • The entry to adjust the accounts for salaries accrued at the end of the accounting period is select one:
    15·2 answers
  • Indicate the effect on the accounting equation and on the debit-credit analysis. Aug. 1 Opens an office as a financial advisor,
    8·1 answer
  • Managers need to understand how information flows within the organization, how their organization interacts with other organizat
    8·1 answer
  • The YTM on a 2 year zero coupon bond is 5% and the YTM on a 1 year zero coupon bond is 3%. What does the no-arbitrage condition
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!