Economics Answers

Assuming PPP holds and that real exchange rate doesn´t change. Additionally we assume fully mobile internationally capital and consumption growth its the same among countries.

i) Show by using Fisher equation - r(t) = i(t) - E(t) (π (t+1)) that standard expression for Uncovered interest rate parity (UIP) follos from previous assumptions;

ii) Considering a test of UIP with the follow regression: E (e (t+1))- e(t) = α + β (i (t) - i* (t)) + v(t). The i* (t) its given and p*(t) = E(p*(t+1))=0 where p* its the log of the foreign price level and p the domestic prices. The domestic policy makers set i (t) according to a price targeting rule, i(t) = r*(t) + µ p(t) + u(t) where u is serially uncorrelated and independent of v. Demonstrate that β will biased away from 1 if µ its different from zero;

iii) Demosntrate the condition under which β <0.

Accounting rules determine a firm’s ‘‘profits’’ for tax- and dividend-paying purposes. So why any firm
should be concerned about its economic profits? Specifically, why should a firm be concerned about the
opportunity costs of the people who invest in it when those costs never enter into its accounting statements

Types of econmy

Sketch how in the pure neoclassical model the fiscal multiplier is smaller than one and which is the intution for this result? The fiscal multiplier can be negative? Which implications of a fiscal multiplier negative as well as from a multiplier that is positive and below 1?

Define ecomomy 2 types of economy institution 3 functions economy institution 4 importance economy imstitution 5 Describtion and types of somali economy

Hi! How to do the bank loan , 1st JAN 2011 the business borrowed 100000 on a 5 year loan.
interest rate of 6% per annum was payable monthly. It was on an interest only basis with interest paid monthly at the end of each month.
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Pizza Factori produced $88,000 worth of pizzas in the past year. They paid $39,000 to employees, paid $11,000 for vegetables and other ingredients, and paid $4,000 in taxes. They began the year with ingredient inventories valued at $1,500 and ended the year with inventories valued at $2,000. What was Pizza Factori’s (and their employees') total contribution to GDP this year (in $)?

Accounting rules determine a firm’s ‘‘profits’’ for tax- and dividend-paying purposes. So why any firm
should be concerned about its economic profits? Specifically, why should a firm be concerned about the
opportunity costs of the people who invest in it when those costs never enter into its accounting statements?

The purpose of economics is to provide a way to think. Economic thinking and decision-making recognize that because of scarcity something cannot be obtained without giving up something else. Consequently, we must make our decisions by comparing the costs and benefits and evaluating the tradeoffs. In doing so, five principles of economic thought come into play: tradeoffs, incentives, opportunity costs, marginal thinking, and voluntary exchange. Explain with a specific example of each how you apply these five principles of economic thought in your everyday life.