5. How can the high rate of return available in modern financial markets discourage businesses from un- dertaking the kind of long term investment necessary to fund the farsighted innovation that neoclassical economists believe will drive growth forever?
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- Consider a two-sector model of growth, with two kinds of investment opportunities—one with a diminishing marginal product and one with a constant marginal product. a. What does the production function for this problem look like? b. Characterize the set of equilibria for this model. Does output in any of the equilibria have nonzero per capita growth? c. What can this model help us explain that strict endogenous and neoclassical growth models cannot?Why would planned investments might be different than actual investments? And what does it mean?Three students have each saved $1,000. Each has an investment opportunity in which he or she can invest up to $2,000. Here are the rates of return on the students’ investment projects: Student Return (Percent) Carlos 4 Felix 7 Janet 15 Assume borrowing and lending is prohibited, so each student uses only personal saving to finance his or her own investment project. Complete the following table with how much each student will have a year later when the project pays its return. Student Money a Year Later (Dollars) Carlos Felix Janet Now suppose their school opens up a market for loanable funds in which students can borrow and lend among themselves at an interest rate rr. A student would choose to be a lender in this market if his or her expected rate of return is than rr. Suppose the interest rate is 6 percent. Among these three students, the quantity of loanable funds supplied would be ,…
- Economics 1. you are making $50,000 at a new job. the 401k match is 100% up to 5% and you vest 20% per year after one full year of employment. you choose to invest 10% of your income. ignoring any growth, at the at the end of 1 year, what should be in your "money bucket", how much should be in the company "match bucket" and how much is in the "vested bucket"? a - $5000, $2500, $500 b - $2500, $2500, $2500 C - $5000, $2500, $2500 d - $5000, $5000, $5000 e - $2500, $2500, $500 2. 59% of the first payment of a 30-year mortgage of $425,000 at 2.95% will be applied to interest true or falseADVANCED ANALYSIS A firm faces the following costs: total cost of capital = $1,000; price paid for labor = $12 per labor unit; and price paid for raw materials = $4 per raw-material unit. %3D Instructions: In parts a and b, enter your answers for total cost as a whole number. Round your answers for average total cost to 2 decimal places. In part c, enter your answer as a whole number. a. Suppose the firm can produce 5,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,000 units of output? TC = $ %D ATC = $ b. Now assume the firm improves its production process so that it can produce 6,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000 units of output? TC = $ ATC = $ c. If units of output can always be sold for $1 each,…21.According to some modern theories of long run economic growth, successive increments of investment have________ returns since some fixed costs are ________ for subsequent firms.A. constant; identicalB. increasing; higherC. increasing; lowerD. decreasing; higher
- What is Risk-free real return?How do you forecast Amazon’s future income statement utilizing forecasted growth rates?Geometric gradient. C.1.) A graduating class of civil engineers decides they will present the engineering college with a gift of $100,000 at their twenty-fifth reunion. There are 50 in the class and they can invest at 8 percent. They plan to start out giving a small amount at the end of the first year and in- crease their gifts to the class fund by 10 percent each year. Find the amount each graduate would donate at the end of the first year in order to reach their class goal of $100,000 at the end of 25 years. (Ans. C= $10.03)
- Define the term the concept of return on investment?Gradebook / ACC 202: Manage x M Question 6 - Chapter 11 Home X + zto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Felearning.kctcs.edu%252Fultra%2 News Translate M SmartBook 2.0 M SmartBook 2.0 Maps Homework i Internal rates of return for three alternative investment projects follow. Each project has a five-year life. The company requires a 13% rate of return on its investments. (a) Which project(s) will the company accept on the basis of internal rate of return? (b) If the company can choose only one project, which will it choose? Potential Projects Internal rate of return x 2 a. Which project(s) will the company accept on the basis of internal rate of return? b. If the company can choose only one project, which will it choose? 3 80 Project X 14% F3 APR 11 $ 4 Q Project Y 128 F4 % 5 S 8 DII FB ( 9 F9 A F10 ) 0Three students have each saved $1,000.each has an investment opportunity in which he or she can invest upto $2,000.Here are the rates of return on the students investment project:a.If borrowing and lendind are prohibited,so each student uses only personal saving to finance his or her own investment project ,how much will each student have a year later when the project pays its return?b.Now suppose their school opens up a market for loanable funds in which students ran borrow and lend among themselves at an interest rate r.What would determine whether a student would choose to be a borrower or lender in this market?c.Among these three students,what would be the quantity of loanable funds supplied and quantity demanded at an interest rate of 7 percent?At 10percent?d.At what interest rate would the loanable funds market among these three students be in equilibrium?At this interest rate,which student(s) would borrow and which student(s) would lend?e.At the equilibrium interest rate,how…