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pantera1 [17]
3 years ago
10

Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumu

lated savings and inheritance). In the late 1990's many were concerned with very large increase in stock value (a form of wealth) and it's possible effect on saving and investment.
The following consumption function incorporate wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (I):

C=45+0.60Y+0.05W
I=100
W=800

We are ignoring the fact that saving adds to the stock of wealth.

Calculate the value of equilibrium Y,C, and savings (S). (Enter you responses as Integers. )
Business
1 answer:
Mekhanik [1.2K]3 years ago
6 0

Answer:

Equilibrium Y = 462.5 , Equilibrium C = 362.5 , Equilibrium S = 100

Explanation:

  • At equilibrium : Aggregate Demand = Aggregate Supply

[ AD = C + I ] = [ AS = C + S = Y ]

45 + 0.6Y + 0.05 W + 100 = Y → 45 + 0.6Y + 0.05 (800) + 100 = Y

45 + 40 + 100 + 0.6Y = Y → Y ; 185 + 0.6Y = Y

Y - 0.6Y = 185

0.4Y = 185

Y = 185 / 0.4 = 462.5  

  • Consumption C = 45 + 0.6Y + 0.05W

Putting Y value : C = 45 + 0.6 (462.5) + 0.05 (800) → C = 45 + 277.5 + 40

C = 362.5

  • Income Y is either consumed (C) or saved (S). So, Y = C + S

Hence , S = Y - C → 462.5 - 362.5 = 100

Alternatively : As  C + I = C + S

Hence, I = S

Equilibrium Savings = Given Investment = 100

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Suppose a three-period weighted average is being used to forecast demand. Weights for the periods are as follows:
notka56 [123]

Answer:

D

Explanation:

Demand forecasting is being able to predict the future demand of a firms product. We calculate this by multiplying the weights of each of the period by its demand observed in the previous period and adding them together

To calculate the demand forecast for period t in this question;

(wt-3 × At-3) + (wt-2 × At-2) + (wt-1 × At-1)

=(0.2 × 2200) + (0.3 × 1950) + (0.5 × 2050)

= 440 + 585 + 1025

= 2050.

Therefore the correct answer is D.

2050 is the demand forecast for period t.

8 0
3 years ago
Is it ethical for u.s. regulations to put u.s. companies at an apparent disadvantage to their foreign competitors? explain why o
Varvara68 [4.7K]
Universal ethic can be define as actions that are taken out of duty and obligation to a purely moral ideal rather than based on the needs of the situation, since the universal principles are seen to apply to everyone, everywhere, all the time. Based on the universal ethic, we feel that it is ethical forU.S. regulation to put U.S. companies at an apparent disadvantage to their foreign competitors because in a competitive market, all the companies have to face to a fair competition. U.S. regulation should not hide the disadvantages of its own nation company and try to protect their interest.In contrast, U.S. regulation should disclose all the disadvantages to every stakeholder especially investors because with the transparency of a company’s financial statement, the investor just can make a right decision whether to invest in that company. To solve the ethical dilemma, trust <span>versus loyalty element should be consider. Instead of continue protecting U.S. companies, U.S.</span>
4 0
3 years ago
Why is Feeney called a hero/saint?
Deffense [45]

Answer:

In 1982, he decided he would commit to giving away his billions during his lifetime. He is broke now. Gave away and donated over $8million. His motto was "giving while living "

Explanation:

5 0
3 years ago
Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2021. The note, along with interest at 5%, is
Daniel [21]

Answer:

$ 39,165.00  

Explanation:

the amount expected from customer in one year is the face value of the note receivable plus interest i.e $40,000*105%=$42,000

The interest on discounting is :

$42,000*9%*9/12=$2,835

The amount of cash that Ireland would receive from the Cloverdale Bank is the amount that Cloverdale would on maturity of the note receivable i.e $42,000, less the discount on the note of $2,385

cash received=$42,000-$2,835=$ 39,165.00  

Cloverdale would pay $ 39,165.00  on September 2021 to Ireland Corporation

8 0
4 years ago
Discretionary fiscal policy
Furkat [3]
The answer is option "d", all of the above.
<span>Discretionary fiscal policy
</span><span>a. may reassure investors and consumers that the federal government will be able to avert a major economic downturn.

b. is not very effective in influencing real GDP during normal times because of time lags.

c. can be very effective in influencing real GDP during abnormal​ times, such as when a nation is at war.

</span>We can define discretionary fiscal policy as when there is a change in government expenditures or taxes to gain national economic goals.
7 0
3 years ago
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