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sergejj [24]
3 years ago
7

Suppose that the natural rate of unemployment in a particular year is 4 percent and the actual rate of unemployment is 7 percent

. instructions: enter your answers as whole numbers.
a. use okun's law to determine the size of the gdp gap in percentage-point terms.

b. if the potential gdp is $500 billion in that year, how much output is being forgone because of cyclical unemployment?
Business
2 answers:
uranmaximum [27]3 years ago
4 0

WHY ARE YOU ASKING ABOUT UNEMPLOYMENT? ARE YOU SELF AWARE YOU DON'T HAVE A JOB JOOOOOHN? HMPH SO SLOW FOR MAKING UNEMPLOYMENT INTO THE WIND OF RETURDED NESS

koban [17]3 years ago
4 0

Answer:

a. The GDP gap is: 6%

b. The forgone output is: $30 billion

Explanation:

GDP (gross domestic product) is the output produced within a country in a given time period. Okun's law establishes an inverse empirical relationship between unemployment and losses in productivity of a country. In terms of output, Okun's law states that for every percentage increase in cyclical unemployment, a country's potential output is lowered by 2%. Cyclical unemployment is the difference between the natural unemployment rate and the actual unemployment rate.

In this scenario, the natural rate of unemployment is 4% and the actual rate is 7%. Therefore, unemployment due to business cycle fluctuations is: 3% . Since the output gap is double the percentage increase in unemployment, the output or GDP gap is 6%. The dollar amount of the GDP gap given the $500 billion potential GDP is (0.06 * 500) = $30 billion

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Heavy Metal Corporation is expected to generate the following free cash flows over the next five years.
mezya [45]

Answer:

Enterprise value of Heavy Metal= $1,080.766

Share price =  $18.945 per unit

Explanation:

<em>The value of a firm is the present value of the free cash flow discounted at the weighted average  cost of capital</em>

Year                                          PV

1        52.1 × 1.14^(-1)      = 45.70175439

2        68.6 × 1.14^(-2)  = 52.40073869

3          78.6 × 1.14^(-3) = 53.05276117

4         74.4×  1.14^(-4) = 44.05077264

5          81.1 ×  1.14^(-5) = 42.12079868

Year  and beyond

  81.1 × 1.04/(0.14-0.04) = 843.44

Total value =   45.70+ 52.40+53.052 + 44.050 +42.120+  843.44 = 1080.766826

Enterprise value of Heavy Metal= $1,080.766

Share price = Total value - Debt value / number of shares

=  (1,080.766  - 304 )/ 41 million units= $18.945 per unit

Share price =  $18.945 per unit

4 0
3 years ago
Carly Company plans to depreciate a new building using the double declining-balance depreciation method. The building cost is $9
ahrayia [7]

Answer:

Straight line method rate = 1/ Number of years * 100  = 1/25*100 = 4%

Double declining balance depreciation = 2*Straight line method rate*Book value

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First Year depreciation = $76,800

Second year depreciation = 8% * (Book Value as on 1st year - First Year depreciation)

Second year depreciation = 8%*($960,000-$76,800)

Second year depreciation = 8%*$883,200

Second year depreciation = $70,656

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2 years ago
The most competitively effective and very likely most profitable long-term approach to reducing or eliminating the impact of pay
monitta

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Tariffs are taxes imposed by one country on goods or services imported from another country. Tariffs are trade limitations that raise prices and decrease available quantities of goods and services for U. S. businesses and customers.

A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance, $300 per ton of imported steel. An “ad valorem” tariff is levied as a proportion of the value of imported goods. An example is a 20 percent tariff on imported automobiles.

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2 years ago
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Answer:

D) $36,000

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Sales                                   $100,000    $140,000            +40,000

Variable cost                      $60,000     $84,000              +24,000

Contribution margin          $40,000     $56,000               +16,000

Fixed expenses                 $20,000     $20,000               +0

Operating income             $20,000     $36,000                +16,000

The Increase in Operating Income will be = $36,000 as our final answer

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3 years ago
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Answer:

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OPERATIONAL DEFINITION

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