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a_sh-v [17]
3 years ago
6

Suppose you are given the following information for an economy without government spending, exports, or imports. C is desired co

nsumption, I is desired investment, and Y is income. C and I are given by:
C
=
1300
+
0.85
Y
, and

I
=
450
.

a) What is the equation for the aggregate expenditure (AE) function?

b) Applying the equilibrium condition that Y = AE, determine the level of equilibrium national income.

c) Using your answer from part (b), determine the values of consumption, saving, and investment when the economy is in equilibrium
Business
1 answer:
Bond [772]3 years ago
3 0

Answer:

Rational Consumer Jim will consume at utility maximising Consumer Equilibrium product combination : 4 Units of Nuts , 8 Units of Apples .

Explanation:

Consumer is at equilibrium where : Budget Line is tangent to Indifference Curve & hence their slopes are equal i.e MRS (NA) = P(N) / P(A)

As per qstn given details : A / N = 10 / 5 implying A/N = 2 i.e A = 2N

Putting this in Budget Constraint: Price of goods x Quantity of goods = Income

[P(A) x Q(A)] + [P(N) x Q(N)] = Y

10A + 5N = 100

10 (2N) + 5N = 100        <em> [</em>S<em>ince A = 2N] </em>

<em>20N + 5N = 100 </em>

<em>25N = 100 </em>

<em>N = 4 ; A = 8                       [Since A = 2N]  </em>

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Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218
lara31 [8.8K]

Answer:

The maximum Southern Tours could pay to acquire the Holiday Vacations is the present is the value of the inflows to be generated from the target company.

The present of the target business is $519,799.59  

Explanation:

That amount is the maximum that should be paid for the target business,depending on negotiation skills of Southern Tours' management.

A  lower price could be bargained,which better makes the investment more profitable.

Find attached spreadsheet for detailed computations.

Download xlsx
6 0
3 years ago
Can a broker arbitrarily penalize an independent contractor based on varying factors, such as the sales agent's difficulty in cl
Irina18 [472]

Answer:

No

Explanation:

An independent contractor is a business person or entity who works for an employer based on an agreed-upon contract which affords him the flexibility of choosing how and when he accomplishes a task. The employer has the right to control the results of his work but has little or no say on how and when the job is done.

An independent contractor is not bound to work specific hours dictated by an employer. When the sale's agent finds it difficult to close a deal or is unable to produce paperwork in a timely fashion, he cannot just be arbitrarily penalized by the broker. The broker could terminate the contract if the agent does not meet up to his requirements.

8 0
3 years ago
What is the difference between ancient trade and modern trade ​
alexira [117]

Answer:

The main difference between traditional trade and modern trade is that, distribution in modern trade is more organized. Retailers often deal directly with manufacturers. Many large retail chains have integrated their services to offer their own brands in groceries and other goods.

Explanation:

6 0
3 years ago
If you wish to accumulate $125,000 in 7 years, how much must you deposit today in an account that pays a quoted annual interest
elixir [45]

Answer:

You need to deposit $58,481.53 today.

Explanation:

a) Data and Calculations:

Future value expected = $125,000

Period of investment = 7 years

Interest rate = 11% compounded quarterly

The amount of deposit needed today to earn $125,000 in 7 years at annual interest rate of 11% is calculated as follows:

N (# of periods)  28

I/Y (Interest per year)  11

PMT (Periodic Payment)  0

FV (Future Value)  125000

Results

PV = $58,481.53

Total Interest $66,518.47

7 0
3 years ago
Carl has a checking account. He'd like to know right away when his balance gets lower than $50. What should Carl do?
enyata [817]
He should set up an alert.
8 0
3 years ago
Read 2 more answers
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