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A hypothetical economy is represented by the following parameters-
Labour force (L) = 40 million, Capital stock (K) = 700 million, saving rate (S) = 0.35, rate of depreciation (δ)
=0.05, rate of population growth (n) =0.015, partial (α) = 0.45 and total factor productivity (A) is constant.
Calculate effective output (y) and effective stock of actual capital (k) (3+3)
b) Find out steady-state stock of effective capital (k*) (3.5)
c) Show graphically the impact of a fall in the rate of depreciation using Solow’s diagram.
The U.S. dollar exchange rate increased from $0.96 Canadian in June 2011 to $1.03 Canadian in June 2012, and it decreased from 81 Japanese yen in June 2011 to 78 Japanese yen in June 2012.
What was the value of the Canadian dollar in terms of U.S. dollars in June 2011 and June 2012?
Q. Which factor amount formula is applied evaluate Annual Equivalent Worth?
(i) Equal payment series capital recovery amount
(ii) Single payment compound amount
(iii) Single payment present worth amount
(iv) None of the above
Q1. What is the formula for Equal payment series capital recovery amount?
(i) A = P(1+i)^n
(ii) F = A /(1+i)^n
(iii) P = t (1+i)^t
(iv) None of these
Q2. Which factor amount formula is applied to evaluate Present Worth Analysis.
(i) Equal payment series present worth analysis.
(ii) Equal payment series Compound amount.
(iii) Equal payment series capital recovery.
(iv) None of these
Q3. B : C ratio means what?
(i) Butter to chicken ratio.
(ii) Benefit to Cost ratio.
(iii) Benefit -cost ratio.
(iv) None of these
Q4. Which type of investment proposals are evaluated by applying B : C ratio?
(i) A start up
(ii) A private investment proposal
(iii) A MSME
(iv) A public investment proposal
Q5. Which factor amount formula is applied to evaluate Future Worth analysis?
(i) Equal payment series compound amount
(ii) Equal payment series present worth amount
(iii) Equal payment series capital recovery amount
(iv) None of these
1. Compare the effects of an autonomous increase in government spending in the IS-LM curve version of the Keynesian model with the effect of the same shift within the classical model. (4)
Q1. What is the meaning of Internal rate of return (IRR)?
(i) It is the interest rate where PW =0
(ii) It is the interest rate where PW >0
(iii) It is the interest rate where PW<0
(iv) None of these.
Q2. What is the meaning of Internal rate of return (MARR)?
(i) Below this rate of return the investment proposal is not acceptable.
(ii) It is the marginal accepted rate of return.
(iii) It is the maximum accepted rate of return.
(iv) None of these.
Q3. What is an effective interest rate?
(i) It is nominal interest rate multiplied with time.
(ii) It is nominal interest rate divided with time.
(iii) R = (1+i/n)^n -1
(iv) None of these.
Q4. What is the correct formula of equal payment series compound?
(i) F= P (1+i)^n
(ii) F = A[ {(1+i)^n -1}/ i ]
(iii) F =(1+i)^n -In -1
(iv) None of the above.
Q5. What is the formula for equal payment series present worth amount?
(i) P = F/ (1+i)^n
(ii) P = r(1+t)^n
(iii) P = A [{(1+i)^n -1}/i(1+i)^n}]
(iv) None of the above.
Q1. What is the meaning of Present worth of an investment proposal?
(i) It is the present value of the principal investment.
(ii) It is the future value of principal investment.
(iii) It is the annual return of an investment proposal.
(iv) None of these.
Q2. What is the meaning of Future worth of an investment proposal?
(i) The future value of a principal investment.
(ii) The annual return.
(iii) The life of an investment proposal
(iv) None of these.
Q3. What is the meaning of a mutually exclusive investment proposals?
(i) A set of investment proposal with equal return.
(ii) A set of investment proposal with equal life.
(iii) A set of investment proposal with equal principal investment.
(iv) None of these.
Q4. What is the meaning of Annual Equivalent Worth of an investment proposal?
(i) It is the annual equivalent amount of cost.
(ii) It is the annual equivalent amount of revenue.
(iii) It is the annual equivalent amount of principal investment.
(iv) It is the net of annual equivalent amount of cost and revenue.
A. Assume you are the authorized check signor of Melch Corporation, draw a check from the Company's account with LLB Bank for Southern Camarines Electric Power Corporation payable on November 22,2021 for 12,550.25 to pay the electric bill for October 28 - November 15, 2021.
Qd = 1400 – 10P;
What happens when the COEFFICIENT b (now set at 10) is the one that changes?
Illustrate explanation through a graph.
Do you think that tariff system should be abolished so imported products can reach broader audience? Why?
