Taiwan is an economic success. Since 1992, Taiwan’s GDP growth has averaged 4.5 percent. This raised real per capita income from $9,116 in 1992 to $19,762 in 2012, with the result that today Taiwan is the 28th wealthiest country globally, and 6th richest country in Asia. And along the way Taiwan has transformed itself from a dictatorship into a vibrant democracy.[1]
Keeping the appropriate cash flow in the cash flow register, using a financial calculator, NPV should be calculated for taking the decision.
Answer: According to the NPV calculated, Chen should buy a new machine.
<u>Explanation:</u>
Cash outflow = $40000
Increase in annual after-tax cash flows : CF = $9000
Place the cash flow on a time line:
0 1 2 10
I 10 I I . . . I
-110000 19000 19000 19000
With a financial calculator, input the appropriate cash flow into the cash flow register, input I/YR = 10, and then solve for NPV. The answer for NPV is $6746.78.
Thus, Chen should buy a new machine.
Answer:
The answer is 2.5
Explanation:
Mpc = marginal propensity to consume
Mps = marginal propensity to save
Multiplier = 1/ 1-mpc= 1/ mps
Multiplier = 1/ 1-0.6 = 1/ 0.4 = 2.5
Answer:
a) If bribes cost $1,000 each, how much will a housing inspector make each year in bribes?
So, if the corrupt inspector approves two newly built structures each week, ti means that he is bribed twice per week. There are 52 weeks in a year, so he gets a total of 104 bribes (52 x 2). If each bribe costs $1,000, then he makes a total of: $1,000 x 104 = $104,000 in bribes per year.
c) Corrupt officials may have an incentive to reduce the provision of government services to help line their own pockets.
This statement is true. Corrupt officials will want to have private companies they can obtain bribes from provide government services. It increases the probability of them making money from bribes.
d) What if reducing the number of inspectors from 20 to 10 only increased the equilibrium bribe from $1,000 to $1,500?
Reducing the number of inspectors in hafl means that each inspector now gets twice the bribes. Because the equilibrium price did not double as did the quantity of bribes, each inspector will make less money than expected, but they will still the incentive to collect all the four bribes per week.
