12-11) A computer-controlled milling machine will cost Ajax Manufacturing $65,000 to purchase plus $4700 to install. (a) If the machine would have a salvage value of $6600 at EOY 20, how much could Ajax charge annually to depreciation of this equipment? Ajax uses straight-line depreciation. (b) What is the book value of the machine at EOY 3? (c) Ajax Manufacturing earns a net profit before tax (also called a taxable income) of $28,800,000. How much tax would Ajax owe for this year?
Utility maximization under constraint, substitution and income effect, CV and EV Josh gets utility (satisfaction) from two goods, A and B, according to the utility function U(A, B) = 5A^1/4B^3/4 . While Josh would like to consume as much as possible he is limited by his income. a. Maximize Josh’s utility subject to the budget constraint using the Lagrangean method. b. Suppose PA increase. Show graphically the income, substitution effect and total effect and explain. c. Suppose PA increase. Show the graph for CV and EV and explain
Using a simple random sample of 90 firms, you run an OLS regression of total CEO compensation in millions of dollars ( salary ) on annual sales in millions of dollars ( sales ) and return on equity in percent ( roe ):ln ( salary ) ^ = 5.5 ( 0.4 ) 0.81 ( 0.052 ) ln ( sales ) 0.04 ( 0.006 ) roeYou wish to test the hypothesis that a 1% increase in annual sales is associated with a 1% increase in CEO compensation. What is the relevant test statistic?Standard errors are in parentheses below each estimated coefficient – so, for example, the OLS estimate of the intercept has a standard error of 0.4. Assume MLR.1-MLR.6 are satisfied and that standard error of the regression is unknown.If necessary, round your answer to four decimal places.
Economics Assignment Writing Service(a) The Information in the two tables below are for a hypothetical economy. The first table shows the case for when the economy is private and closed. The second table shows when we open the same economy to international trade. Use the information in the two tables to answer questions (i) to (v) that follow. (Please show your calculations and/or state the formula used in each case.)(i) Find the equilibrium level of GDP and size of the multiplier. (ii) Suppose we open the economy to international trade by including the exports and imports data in columns (4) and (5) as below. Complete the table below by filing in columns (6) and (7) and determine the equilibrium GDP for the open economy. (Show your calculations)(iii) From your answers in (i) and (ii) above, what is the change in equilibrium GDP for the economy when it is opened to international trade? (iv) Given the original $70 billion level of exports in column (4), what would be the equilibrium GDP for the open economy if imports (column (5) were $10 billion higher at each level of GDP? (v) What is the multiplier for the open economy?
1.Which of the following is NOT true regarding the subject matter of international finance? A. International finance studies the important trade theories.B. International finance examines the theory of balance of payments and its relationship with macroeconomic variables.C. International finance studies exchange rate theories and the impacts of the exchange rate on the economy.D. International finance discusses the exchange rate risks and the derivative instruments by which people use to cover the exchange rate risks and to speculate.2. Globalization refers to _______.A. the strengthening of existing international linkages of commerce, finance and the addition of new international linkagesB. the expansion of world governance and global societyC. the increased mobility of peoples and informationD. All of the above3. Which of the following is NOT a characteristic of the nowadays financial markets?A. Increasingly interdependent national financial marketsB. the global trend toward free-market economiesC. An increasingly number of cross-border partnerships, including many international merges, acquisitions, and joint venturesD. An increasing number of cooperative linkages among securities exchange4. A debit entry in the balance-of-payments account represents a transaction that ___( )_____.A. a domestic resident receives a payment from abroadB. a domestic resident makes a payment to a foreign residentC. will improve the current account statusD. will have no affects on the nation’s foreign exchange reserves5. A balance-of-payments deficit is defined as a situation in which ______.A. the value of payments made to the foreigners exceeds the value of receipts received from the foreigners in a given period of timeB. the government must borrow in order to meet its budget obligationsC. the value of manufactured good exports is less than the value of imported goodsD. a nation earns much in extra assets or reduced liabilities in its dealings with the rest of the world6. If the U.S. runs current account deficits, we can expect that ________.A. it may act as a net debtor in the rest of the worldB. its domestic saving may less than its domestic investmentC. its domestic production is less than its domestic consumptionD. all of the above7. The trade deficit means that ________.A. residents are importing more goods than they are exportingB. residents are borrowing more funds than they are lendingC. residents are receiving more payments than they are makingD. residents are producing more goods than they are consuming8.For most countries, the subcategory that typically dominates the current account is __( )______.A. unilateral transfersB. goods tradeC. income tradeD. services trade9.The foreign exchange refers to the _______.A. foreign bank notes and coinsB. demand deposits in foreign banksC. foreign securities that can be easily cashedD. all of the above10.The functions of the foreign exchange market come down to ________.A. converting the currency of one country into the currency of anotherB. providing some insurance against the foreign exchange riskC. making the foreign exchange speculation easyD. Only A and B are true.11. Which of the following is NOT true regarding the foreign exchange market? A. It is the place through which people exchange one currency for another.B. The exchange rate nowadays is mainly determined by the market forces.C. Most foreign exchange transactions are physically completed in this market.D. All of the above are true.12.The world largest foreign exchange markets are ______ respectively.A. London, New York and TokyoB. London, Paris and FrankfurtC. London, Hong Kong and SingaporeD. London, Zurich and Bahrain13. Most foreign exchange transactions are through the U.S. dollars. If the transaction is expressed as the currencies per dollar, this is known as ______ whereas __________ are expressed as dollars per currency.A. direct quote; indirect quoteB. indirect quote; direct quoteC. European quote; American quoteD. American quote, European quote14.Which of the following is true about the foreign exchange market?A. It is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications system.B. The foreign exchange market is usually located in a particular place.C. The foreign exchange rates are usually determined by the related monetary authorities.D. The main participants in this market are currency speculators from different countries.15.The exchange rate system refers to _________.A. a country’s internal economic policies such as employment, inflation and interest rate levelsB. a country’s monetary policiesC. a country’s fiscal policesD. a country’s choice as to which exchange rate regime such as fixed or floating or between to follow16. The international monetary system is broadly defined as __________.A. the set of conventions, rules, procedures and institutions that govern the conduct of financial relations between nationsB. the set of rules to manage every country’s central banksC. the set of rules to solve trade disputes between countriesD. the set of rules to develop world economy17. Under the gold standard, the exchange rate was fixed because ________.A. each currency unit could be converted to a weight of goldB. the gold could be exported and imported with no restrictionsC. gold coins could be freely mintedD. all of the above18. Which of the following is true regarding the collapse of the gold standard system?A. The World War I had many European countries suspend convertibility of their currencies into gold. DB. The political costs of maintaining the overvalued pound were so great in the United Kingdom.C. Nations facing 1929 – 1933 worldwide recession decided to pursue objectives such as higher employment rates and real growth rates, rather than to maintain the exchange value of their currencies.D. All of the above are the reasons that the gold standard finally collapsed.19. The U.S. dollar was designated as the international currency in international settlements under the Bretton Woods system. The dollar was accepted by the rest of the world because __________A. it could be used to purchase U.S. goods and servicesB. it could be converted to gold at a price of $35/ounceC. the U.S. was the only super power at that timeD. the IMF forced the rest of the world to use dollar to settle international debts20. If the law of one price holds for a particular good, we may conclude that _________.A. there is no trade barriers for the good among the different nationsB. the price of the good is the same ignoring the other expensesC. arbitrage for the good does not existD. all of the above are true21.A country that regulates the rate at which its currency is exchanged for all other currencies is considered to have a ___( )_____ exchange rate system.A. fixed or managedB. floating or flexibleC. currency boardD. dollarization22. If the price of a pair of Nike sneakers costs $85 in U.S, and the price of the same sneakers is €80 in Paris, the spot rate is $1.35 per euro, the euro _______.A. is correctly valued according to PPPB. is correctly valued according to relative PPPC. is undervalued according to PPPD. is overvalued according to PPP23.An increase in the demand for French goods and services will ________.A. induce a rightward shift in the demand for euroB. induce a leftward shift in the demand for euroC. result in a rightward movement along the demand curve for euroD. result in a leftward movement along the demand curve for euro24.If U.S. demand for Japanese goods increases and Japan’s demand for U.S. products also rises at the same time, which of the following can you conclude in this situation?A. The U.S. dollar will appreciate against the yen.B. The U.S. dollar will depreciate against the yen.C. The U.S. dollar will not change relative to the yen.D. The U.S. dollar may appreciate, depreciate, or remain unchanged against the yen.25.According to the relative PPP, if country A’s inflation rate is higher than country B’s inflation rate by 3%, ________.A. country A’s currency should depreciate against country B’s currency by 3%B. country A’s currency should appreciate against country B’s currency by 3%C. it is hard to say whether country A’s currency should appreciate or depreciate against country B’s currency. The exchange rate is influenced by many factorsD. none of the above is true26. The principal function of the International Monetary Fund (IMF) was originally to __________A. act as a supranational regulatory agency for all countries’ central banksB. lend to member nations experiencing a shortage of foreign exchange reservesC. finance postwar reconstruction, particularly in Europe and JapanD. reduce trade barriers and settle disputes among countries relating to currency negotiations27. The absolute purchasing power parity says that the exchange rate between the two currencies should be determined by the _______ .A. relative inflation rate of the two currenciesB. relative price level of the two countriesC. relative interest rate of the two currenciesD. relative money supply of the two countries28. Which basket of goods would be most likely to exhibit absolute purchasing power parity?A. Highly tradable commodities, such as wheatB. The goods in the Consumer Price indexC. Specialized luxury goods, which are subject to different tax rates across countriesD. Locally produced goods, such as transportation services, which are not easily traded29. Since the advent of floating exchange rates in 1973 it has become evident that authorities have not always let their currency float freely but rather they have frequently intervened to influence the exchange rate. This floating exchange rate system is also called ________.A. clean floatB. managed floatC. dirty floatD. Both B and C are correct30.A country’s balance of payments records:A. the prices that a country pays for its imports and the prices that the country receives for its imports.B. the flows of value between that country’s residents and residents of the rest of the world during a period of time.C. capital gains and losses on a country’s international assets.D. the value of a country’s holdings of foreign assets, minus the value of foreign holdings of the country’s assets.31. A credit item in the balance of payments is:A. an item for which the country must be paid.B. any loan given out by the country.C. any imported item.D. an item that creates a monetary claim owed to a foreigner.32. A debit item in the balance of payments is:A. any foreign aid received by the country.B. an item for which the country must pay.C. any exported item.D. an item that creates a monetary claim on a foreigner.33.Every international exchange of value is entered into the balance-of-payments accounts _____ time(s).A. oneB. twoC. threeD. four34. The sum of all of the debit items in the balance of payments:A. equals the overall balance.B. equals the sum of all credit items.C. equals ‘compensating’ transactions.D. equals the errors and omissions.35. _____ are money-like assets that are held by governments and that are recognized by governments as fully acceptable for payments between them.A. Official international reserve assetsB. Unofficial international assetsC. Official domestic assetsD. Unofficial reserve assets36. The net value of flows of goods, services, income, and unilateral transfers is described as the:A. capital account balance.B. current account balance.C. trade balance.D. official reserve balance.37. The net value of flows of financial assets and similar claims (excluding official international reserve asset flows) is called the:A. financial account balance.B. current account balance.C. trade balance.D. official reserve balance.38.A deficit in the current account:A. is accompanied by an equal amount of surplus in the financial account or in official international reserves.B. tends to cause a deficit in the financial account.C. does not affect the financial account or official international reserves.D. is the result of increasing exports and decreasing imports.39. In September 2005, exports of goods from the U.S. decreased $3.3 billion to $73.4 billion, and imports of goods increased $3.8 billion to $144.5 billion. This increased the deficit in:A. the balance of payments.B. the financial account.C. the current account.D. unilateral transfers.40. In the balance of payments, the statistical discrepancy is used to:A. ensure that the sum of all debits matches the sum of all credits.B. ensure that the value of imports equals the value of exports.C. show how a balance-of-payments deficit is funded.D. obtain an accurate account of a balance-of-payments surplus.41. Official reserve assets are:A. the gold holdings in the nation’s central bank.B. money like assets that are held by governments and that are recognized by governments as fully acceptable for payments between them.C. government T-bills and T-bonds.D. government holdings of SDR’s.42. Which of the following constitutes the largest component of the world’s international reserve assets?A. GoldB. Special drawing rightsC. IMF reserve positionsD. Foreign currencies43.A country experiencing a current account surplus:A. needs to borrow internationally.B. is able to lend internationally.C. must also have had a surplus in its overall payments balance.D. spends more than it earns on its merchandise and service trade, international income payments and receipts and international transfers.44.A nation is considered to be a(n) _____ in the international market, if its current account is in deficit.A. importerB. exporterC. borrowerD. lender45.A country that is saving more than it is investing domestically:A. has a current account surplus.B. has a financial account deficit.C. has a trade balance.D. has a trade disequilibrium.46.A nation is called a lender if:A. its financial account is in deficit during a time period.B. its current account is in surplus during a time period.C. its current account is in deficit during a time period.D. its net stock of foreign assets is positive.47.A nation is called a creditor if:A. it provided financial assets to other countries.B. its net stock of foreign assets is positive.C. its current account is in surplus during a time period.D. its current account is in deficit during a time period.48.Which of the following refers to foreign exchange?A. The act of trading different nations’ moneysB. The holdings of foreign assetsC. The act of exchanging goods and services internationally.D. The adoption of foreign trade policies49. The exchange rate value of a foreign currency is _____ in the short run by a rise in the expected future spot exchange rate value.A. raisedB. loweredC. made volatileD. not affected50. A decrease in the foreign interest rate relative to the domestic interest rate _____ the exchange rate value of a foreign currency in the short run.A. raisesB. lowersC. does not affectD. causes fluctuations in51. If the domestic interest rate decreases, with the foreign interest rate and the expected future spot rate remaining unchanged, the value of the domestic currency vis-à-vis the foreign currency is expected to:A. increase.B. decrease.C. remain unchanged.D. converge to its PPP value.52.Everything else remaining unchanged, an increase in interest rates in the United States is most likely to result in:A. depreciation of the dollar.B. outflows of capital from the United States.C. capital inflows into the United States.D. a decrease in the demand for dollar-denominated financial assets.53. The law of one price works well for _____ traded commodities.A. allB. rarelyC. heavilyD. domestically54. The law of one price works better if:A. transportation costs for the product are close to zero.B. there is incomplete information.C. there are few buyers and sellers.D. the governments of the trading countries implement adequate trade barriers.55. _____ purchasing power parity states that a bundle of tradable products will have the same cost in different countries if the cost is stated in the same currency.A. FullB. PartialC. RelativeD. Absolute56._____ purchasing power parity states that the difference between changes over time in product-price levels in two countries will be offset by the change in the exchange rate over this time.A. FullB. PartialC. RelativeD. Absolute 57.Suppose the average price of a Big Mac in the United States is $3.50 while in Japan the average price is 400 yen. If the market exchange rate is that 1 dollar is exchanged for 100 yen, the purchasing power parity model of exchange rate determination suggests that:A. the yen is overvalued.B. the yen value is about correct.C. the price of a Big Mac in Japan will rise.D. the dollar will depreciate against the yen.58. In a _____ exchange rate system the government or central bankers intervene to keep the exchange rate virtually steady.A. fixed B. market driven C. managed float D. forward 59. The U.S. dollar is called a _____ because it is often used as an intermediary to accomplish trading between two other currencies.A. vehicle currencyB. main currencyC. common currencyD. primary currency60. Suppose the dollar per pound exchange rate is $2 per pound while the dollar per Swiss franc exchange rate is 50 cents per franc. From the given information we can conclude that the Swiss franc per pound exchange rate is:A. 1 franc per pound.B. too lowC. too high D. 4 francs per pound.61.Shifts in demand away from French products and toward the U.S. products (caused by forces other than changes in the exchange rate) would result in extra attempts to:A. buy both euros and dollars.B. sell both euros and dollars.C. sell Euros and buy dollars.D. buy Euros and sell dollars.62.Which of the following is true of foreign exchange markets?A. The foreign exchange market is a single gathering place where traders shout buy and sell orders at each other.B. Individuals’ exchanges of currencies comprise the largest portion of overall foreign exchange trading.C. The laws of demand and supply are not applicable in a foreign exchange market.D. Most foreign exchange trading involves the exchange of U.S. dollars for other currencies.63.As the value of the yen falls relative to the U.S. dollar in the foreign exchange market:A. Japanese goods become more expensive to the U.S. consumers.B. the supply of dollars will fall.C. the demand for Japanese goods will increase in the U.S. marketD. U.S. goods become less expensive to Japanese consumers.64.Exchange rates are equalized in different locations due to:A. arbitrage.B. government intervention in foreign exchange markets.C. free trade in goods and services.D. the actions of importers and exporters. 65.When the exchange rate is set now for a currency trade that will take place sometime more than a few days in the future is often referred to as a:A. spot exchange rate.B. forward exchange rate.C. pegged exchange rate.D. managed exchange rate. 66.The exchange rate set for an immediate trade is often referred to as a:A. managed exchange rate.B. pegged exchange rate.C. forward exchange rate.D. spot exchange rate.67.If the price of British pounds in terms of the U.S. dollars is $1.80 per pound, then the price of U.S. dollars in terms of British pounds is:A. £1.80 per dollar.B. £0.555 per dollar.C. £0.90 per dollar.D. £3.60 per dollar.68.How can one profit through arbitrage if the dollar per euro exchange rate in London is $2 per pound while in New York is $1.95 per pound?A. Buy dollars in New York and sell them in LondonB. Buy pounds in London and sell them in New YorkC. Buy pounds in New York and sell them in LondonD. Buy dollars in London and sell pounds in New York69.A decrease in German residents’ willingness to invest in dollar-denominated assets will shift the demand curve for:A. Euros to the right.B. Euros to the left.C. Dollars to the right.D. Dollars to the left.70.Under a floating exchange rate system, everything remaining constant, an increase in European exports to Japan is most likely to result in:A. a decrease in the demand for euro in the foreign exchange market.B. a decrease in the supply of euro in the foreign exchange market.C. an appreciation of the Japanese yen vis-à-vis the euro.D. an appreciation of the euro vis-à-vis the Japanese yen.
Is it possible that the violent members of the drug cartels can behave like cartels in legitimate markets? Support a perspective presented by your colleague.Explain why and how you have a different perspective.Share an insight based upon your colleague’s posting.Validate an idea with your own experience.Expand upon your colleague’s posting.Ask for evidence that supports the posting.
Problem 4: A Lockdown in the SOE Model [15 marks] Consider a Small Open Economy model. Answer the following questions by assuming that the purchasing power parity (PPP) holds, and that the country adopts a flexible exchange rate. 1. Suppose that the government implements a lockdown. Which are the equilibrium effects of this shock on the real wage, employment, the real interest rate, output, and domestic prices? Use the equilibrium diagrams for the current labour market, the current goods market, and the money market in the Small Open Economy Model to answer this question. 2. How will the lockdown affect the current account balance? Explain. 3. How would your answers to parts 1 and 2 change if the country adopted a fixed exchange rate? Explain.