Economics Answers

“A change in the price level shifts the aggregate expenditures curve, but not the aggregate demand curve.”

What are the eight member standards for successful budget negotiating procedures?

What accounting standard is relevant to the presentation of financial statements including budgets?

Why demand curve slope downward to right?

A certain town in Kerala obtains all of its electricity from one company, South Electric. Although the company is a monopoly, it is owned by the citizens of the town, all of whom split the profits equally at the end of each year. The CEO of the company claims that because all of the profits will be given back to the citizens, it makes economic sense to charge a monopoly price for electricity. Do you agree with the CEO? Why or Why not? If the gains of the producers from monopoly power could be redistributed to consumer, would the social cost of monopoly power be eliminated? What are the important measures you suggest to control monopoly power?

Consider the infinite period model for efficient investment. The optimal consumption path is CI-C for t-1, 2, 3 as in the previous question. A countrys output Q is 100 units in each period with no shocks. The investment would require an expenditure of 100 units, and that the investment will pay off in future years by increasing the countrys output by 5 units in year 1 and all subsequent years. The country is open: it can export or import the final good, and it can save or borrow money at a world interest rate 5%. (a) Calculate the present value of output (GDP, Q) and consumption (GNE, C) with no invest ment. (b) Calculate the present value of output (GDP,

In 2012 the U.S. exchange rate with the European Union was reported as 1.2859 ($/Euro). The rate in 2013 was reported as 1.3281 ($/Euro) (sources: Economic Indicators and FRED). Briefly assess the implications of this exchange rate change for U.S. exports and imports with the European Union.

You are given the following information about an
economy:
Gross private domestic investment = 40
Government purchases of goods and services = 30
Gross national product (GNP) = 200
Current account balance = -20
Taxes = 60
Government transfer payments to the domestic private
sector = 25
Interest payments from the government to the domestic
private sector = 15 (Assume all interest payments by
the government go to domestic households.)
Factor income received from rest of world = 7
Factor payments made to rest of world = 9
Find the following, assuming that government investment
is zero:
a. Consumption
b. Net exports
c. GDP
d. Net factor payments from abroad
e. Private saving
f. Government saving
g. National saving

The value of the price elasticity of demand is always positive. True of false?

Comparing International Projects. Billabong Limited, a manufacturer of surfing clothing and sports equipment, wants to increase its market share by acquiring a target producing a popular clothing line in Europe. This clothing line is well established. Forecasts indicate a relatively stable euro over the life of the project. Harvey Norman Limited, a retailer of computer, furniture and related goods wants to increase its market share in the computer market by acquiring a target in Thailand that currently produces radios and converting the operations to produce PCs. Forecasts indicate a depreciation of the baht over the life of the project. Funds resulting from both projects will be remitted to the respective Australian parent on a regular basis. Which target do you think will result in a higher net present value? Why?