Answer:
(A) $500 million
(B) This type of analysis is used to show that Special Interest Groups tend to press the government for TRANSFERS instead of ECONOMIC GROWTH.
Explanation:
1/10,000 of the real GDP is = $50,000
RGDP = 50,000 ÷ 1/10,000
RGDP = 50,000 × 10,000 = $500,000,000
If special interest group Q would have to be indifferent (not care which policy is applied at the given time) between the 2 policies, then the economic growth policy would have to increase the size of the RGDP (the economic pie) by an amount sufficient enough for them to get their net benefit of $50,000.
The RGDP figure above ($500 million) is the amount by which RGDP (real gross domestic product) should grow, if Group Q will still get their net benefit when only the economic growth policy (EGP) is applied.
In this case, the EGP applied in place of the TP (transfer policy) would still fetch Group Q the minimum net benefit of $50,000
(B) This type of analysis is used to show that Special Interest Groups tend to press the government (policy makers and enforcers) for TRANSFERS instead of ECONOMIC GROWTH.
Answer:
The correct answer is option a.
Explanation:
The consumer price index or CPI is a measure to calculate the change in the price level or the rate of inflation. It calculates the changes in the price of a basket of goods generally purchased by the consumers.
But CPI does not always accurately calculate inflation. It involves substitution bias and quality adjustment bias.
For instance, when the price of chicken increases as compared to the price of turkey, the consumers will buy more turkey and less chicken. So the consumer expenditure will not increase as they will be substituting turkey for chicken.
But the CPI will increase with an increase in chicken price. An increase in CPI implies an increase in inflation, so inflation will be overstated.
Answer:
a. $2953.9
b. $2813.24
Explanation:
To calculate the future value of an annuity paid at the beginning of the period, you have:
![VF = A\left[\frac{(1+i)^{n+1} - (1+i)}{i}\right] = 100\left[\frac{(1.05)^{19} - (1.05)}{0.05}\right] = 2953.9](https://tex.z-dn.net/?f=VF%20%3D%20A%5Cleft%5B%5Cfrac%7B%281%2Bi%29%5E%7Bn%2B1%7D%20-%20%281%2Bi%29%7D%7Bi%7D%5Cright%5D%20%3D%20100%5Cleft%5B%5Cfrac%7B%281.05%29%5E%7B19%7D%20-%20%281.05%29%7D%7B0.05%7D%5Cright%5D%20%3D%202953.9)
To calculate the future value of an annuity paid at the end of the period, you have:
![VF = A\left[\frac{(1+i)^{n} - 1)}{i}\right] = 100\left[\frac{(1.05)^{18} - 1)}{0.05}\right] = 2813.24](https://tex.z-dn.net/?f=VF%20%3D%20A%5Cleft%5B%5Cfrac%7B%281%2Bi%29%5E%7Bn%7D%20-%201%29%7D%7Bi%7D%5Cright%5D%20%3D%20100%5Cleft%5B%5Cfrac%7B%281.05%29%5E%7B18%7D%20-%201%29%7D%7B0.05%7D%5Cright%5D%20%3D%202813.24)
Mr. Knox will have $2953.9 at the end of the 18 years, if he pays $100 at the beginning of each year. On teh other hand, Mr Knox will have $2813.24 at the end of the 18 years, if he pays $100 at the end of each year.
Answer:
e. $85,300.
Explanation:
ending accounts payable
= beginning accounts payable + purchases - payment of accounts payable
= $78,000 + $44,900 - $37,600
= $85,300
Therefore, The balance in accounts payable at the end of March is $85,300.
Answer:
$1,220.55
Explanation:
We use the Present value formula to find out the current price of the bonds. The calculation is presented on the excel spreadsheet
Given that,
Future value = $1,000
Rate of interest = 5.5%
NPER = 19 years
PMT = $1,000 × 7.4% = $74
The formula is shown below:
= -PV(Rate,NPER,PMT,FV,type)
So, after solving this, the current price of the bond is $1,220.55
