An investor pays $1,230 for a bond with a face value of $1,000 and an annual coupon rate of 9 percent. The investor plans to hold the bond until its maturity date in eight years. The bond has a yield to maturity of __________ percent. (Note: This question requires a financial calculator.)

Julia Chen just purchased a $1,000 face value bond for $987. The bond pays $50 in interest every six months and matures in five years. The yield to maturity for this bond is __________ percent. (Note: This question requires a financial calculator.)

Explain Backward Induction Method and Extensive Form of Game through relevant examples.

A firm rents light bulbs to consumers. The firm covers the cost of the light bulb and replacing it every time it burns out. The interest rate is 14%. The cost of producing a light bulb is √N where N is the number of years the light bulb lasts.
What is the firm's present value cost of providing a lightbulb to a consumer and replacing it everytime it burns out forever? Using light bulbs that last 10 years.

Consider two identical firms competing as Cournot oligopolists in a market with demand p(Q)=100-0.5Q. Both firms have total costs,TC=10q where 10 is the marginal cost of production. ( Here Q represents total output in the market whereas q represents firm level output.)

(b)   Now assume that the firms collude. They again play a one-shot game. What is the output that each firm should produce in order to sustain the collusion? Find the market price, and profits of each firm. Are their profits higher when they collude than when they compete as Cournot oligopolists?

Can someone answer all of the following questions

Question 3 (Value = 4)

Briefly explain the difference between expansionary and contractionary fiscal policy. Describe recent government actions in these terms.

Question 4 (Value = 6)

Public debt is the total amount owed as a result of past borrowing. In the context of this course, why does public debt exist. Is public debt a god thing or a bad thing?

Bonus Question (2)

The Bank of Canada recently dropped the overnight rate to 0.25%. Using your textbook and the class presentation material, briefly explain why the BOC has done this and what the expected impact will be.

Discuss the mechanisms through which monetary policy affects stock prices and aggregate demand. Please be specific about the channels/theories.                                                             

1. Budget deficits will (increase, decrease, or have no effect on)  the exchange rate value of the dollar.

2. Suppose that the government provides each taxpayer with a $1,000 tax rebate financed by issuing additional Treasury bonds.

Keynesian economists believe that this fiscal action will (increase, decrease, or have no effect on) aggregate demand, output, and employment, whereas economists who believe in crowding out argue that financing fiscal action by borrowing will (increase, decrease, or have no effect on) interest rates and (increase, decrease, or have no effect on) private investment, weakening the expansionary impact.

3. Did the shift of the federal budget from deficit to surplus during the 1990s weaken aggregate demand?

A. It weakened aggregate demand, but did not slow down the growth of the economy.

B. It weakened both aggregate demand and the growth of the economy.

C. It occurred without weakening aggregate demand, but did slow down the growth of the economy.

D. It occurred without weakening either aggregate demand or the growth of the economy.

1. Explain the meaning of inflation and deflation with relevant examples

2.Explain the cost of inflation with relevant examples

3. Explain the causes and effects inflation and deflation with relevant examples

Jones and Smith are neighbors. Jones runs a marijuana shop out of his home. Smith, a doctor, sees patients at his home. Jones makes an annual profit of $1.5 million from operating his marijuana business. Smith earns $750,000 annually from his medical practice, but he would earn $1.2 million without the disruption caused by Jones’marijuana selling activities.

(a) Suppose the law imposes no restriction on what a homeowner may do in his home. What would the outcome be, as predicted by Coase?

(b) Suppose the law requires that one’s neighbors consent to what a homeowner does in his home. What would the outcome be, as predicted by Coase?

(c) How optimal would the outcome be in case (a) and case (b)?

(d) What are transactions costs?

(e) How might the presence of transactions costs affect Coase’s analysis?

(f) What does Coase see as the role of government in this case?

( Please type all this answer,do not handwriting,thanks!)

Consider a goods market in the following situation.

(1) Aggregate demand: Z=C+I+G

(2) Aggregate supply: Y=Z

(3) C(Consumption)=c0+c1(Y-T),

(4) I(investment)=a0/i, i=policy interest rate

(5) (Exogenously given) G=government spending, T=government tax revenue

(a) Represent Y∗ as a function of exogenous variables, parameters, policy interest

(b) Suppose that the central bank of this country announces the policy rate cut. Assess

the effects of the lowered policy rate on the aggregate product by taking derivative.

(c) How will your answer in (b) change if the investment function is changed to

I=a0/i+a1C ? What is a rationale for assuming an investment function like this?

Commentators often refer to government budget deficits and trade deficits as "twin deficits". Explain how the two types of deficit are related.

Recently the COVID-19 pandemic has huge impact on Canadian economy. Explain how the COVID-19 pandemic affect the Canadian economy in terms of GDP, inflation rate and unemployment rate. Compare the economic impact of current COVID-19 pandemic with the economic impact of global financial crisis, which happened during 2008-2009.

In the context of public goods, what is meant by non-rivalry versus rivalry in consumption? What is meant by non-excludability versus excludability in consumption? Give an example of a commodity that is both non-rival and non-excludable? Could a commodity have one of these properties without the other? What is an open access resource? How does it differ from a private good? How does it differ from a public good? Could private provision of a public good occur? Give an example of how that might come about. If there were private provision of a public good, would the level of that provision be socially optimal? Explain your reasoning. 2 What is the marginal cost of supplying an extra person with a good that is non-rival? If there were private provision of a good that is non-rival, would the amount supplied be socially optimal? Explain your reasoning. (Please type all the answer,do not handwriting, thanks！）

The U.S. government treats the goods produced by a firm in a year that are not sold in that year as increases in inventories and includes them in that year's GDP at market prices. In other words, the government assumes that the firm itself buys those goods for future resale. With this convention in mind, place a "yes" in a box if you think the statement is 100% true, place a "no" otherwise (without quotation marks and with no spaces). Ignore illegal goods and illegal activities altogether.

Any good produced domestically in a year will be included in that year's GDP.

Any good produced domestically in a year will be included in that year's GDP, except those produced by households for their own consumption

. Any good produced domestically and sold in a year will be included in that year's GDP

. Any good produced domestically and sold in a year will be included in that year's GDP, except those produced by firms that are not sold.

Any good sold in a year will be included in that year's GDP.

Any service sold in a year will be included in that year's GDP.

Any good that is not sold in a year will be excluded from that year's GDP.

If the U.S. government legalizes marijuana, the U.S. GDP will increase.