Answer:
The current price of the bond is $913.91 as computed below
Explanation:
In order to determine the current bond price,the pv formula in excel comes handy.
The pv formula is stated as below:
=pv(rate,nper,pmt,fv)
rate is the yield to maturity on the bond which is 10.40% in this case
nper is the period to maturity of the bond which is 6 years
pmt is the annual coupon payment payable by the bond which is denoted as coupon rate* face value of the bond i.e 8.40%*$1000=$84
fv is the face value of the bond which repayable at maturity
=-pv(10.40%,6,84,1000)
=$913.91
Answer:
A) attached below
B) 
C) The fiscal policy is called an automatic stabilizer because the taxes are dependent on the level of income and also the output of the multiplier is more stable because it doesn't respond to rapid changes in fiscal policies.
Explanation:
Given data:
C = Co + C1YD
T = t0 + t1Y
YD = Y - T
G and I are both constant
C1 lies between 0 and 1 while T1 lies between 0 and 1
A ) solving for equilibrum output
attached below
B) The multiplier
Multiplier = 
The economy responds to changes in autonomous spending when t1 is 0 but responds less when t1 is positive, this is because the more positive t1 is the lower the multiplier value
c) The fiscal policy is called an automatic stabilizer because the taxes are dependent on the level of income and also the output of the multiplier is more stable because it doesn't respond to rapid changes in fiscal policies.
Answer:
B) not transferable to other types of production and can only be used for the product in question
Explanation:
Specific factor of production is a factor of production that is majorly specific and relevant to a particular industry for production, and as such cannot be transferred or moved to another industry. For example, skilled workers in sericulture are specifically trained to serve as a labor factor of production in agriculture or agro-based industry, and would be difficult to be relevant in an automobile industry. Such skilled workers are immobile between both industries.
Answer:
$56.19
Explanation:
Because Hot Wings' stock only pay dividend in next four years, the stock intrinsic value is sum of these four discounted dividends. Let formulate the calculation as below:
Hot Wings' stock intrinsic value = Dividend in year 1/(1 + Required rate of return) + Dividend in year 2/(1 + Required rate of return)^2 + Dividend in year 3/(1 + Required rate of return)^3 + Dividend in year 4/(1 + Required rate of return)^4
= (10.25 + 8.25)/(1 + 12%) + (10.25 + 8.25)/(1 + 12%)^2 + (10.25 + 8.25)/(1 + 12%)^3 + (10.25 + 8.25)/(1 + 12%)^4 = $56.19
Answer:
Keynesian economics argues for the use of active government policy to stabilize the economy.
Explanation:
In order to alleviate or avert economic recessions, Keynesian economics places a strong emphasis on the employment of proactive government policy to control aggregate demand. Keynes contended that lengthy periods of high unemployment might result from a lack of general demand. Consumption, investment, government purchases, and net exports are the aggregate of four factors that determine an economy's amount of goods and services.
