Which of the following statements is the most accurate and complete summary of trends in income inequality over the period 1950-2015, as presented in Unit 19?

Question 12 options:

For countries with a progressive tax system, when making the adjustment from market income to disposable income we would usually expect the Gini coefficient to ____, and in making the adjustment to final income we would expect it to ____.

Question 13 options:

If the central bank wants to increase spending in the economy it should ___________ the policy rate in order to make it ___________ to borrow.

Question 3 options:

1. In one market, supply is inelastic. In a second market, supply is elastic. An increase in demand will cause the equilibrium price to change by ______________ and equilibrium quantity to change by ______________ in the first market than in the second market.

a more: more

b less; more

c less; less

d more; less

e not change because supply is inelastic

2. One market has an elastic demand for the good. In a second market, the demand is inelastic. Everything else is the same in the two markets. An increase in supply, will ______________ the equilibrium quantity the most in the ______________ market.

a increase; first

b decrease; first

c increase; second

d decrease; second

e increase; we cannot tell in which market the change will be the greatest, it depends upon the elasticity of supply

3. Consider two goods. The first makes up a large part of one’s spending; the second, a small part. The first does not have many substitutes, while the second has quite a few. What is likely true about the elasticity of demand of the first good compared to that of the second?

a the demand for the first good is likely to be more inelastic

b the demand for the first good is likely to be more elastic

c one cannot tell as the larger portion of spending makes demand elastic and the lower number of substitutes makes demand inelastic.

d one cannot tell as the larger portion of spending makes demand inelastic and the lower number of substitutes makes demand elastic.

4. If buyers and sellers both expect prices to rise, what will happen to quantities sold?

a The equilibrium quantity will decrease.

b The equilibrium quantity will increase.

c The equilibrium quantity will be unlikely to change.

d The equilibrium quantity could decrease, increase, or remain the same.

5. An increase in the cost of producing GM SUVs will be most likely to cause which of the following to happen to the prices of Toyota SUVs?

a The price of Toyota SUVs will not change.

b The price of Toyota SUVs will increase.

c The price of Toyota SUVs will decrease.

d One cannot tell what will happen to the price of Toyota SUVs.

DyanChrome estimates its sales at 12,000 units in the first quarter with an increase by 600 units each quarter over the year. It desires an ending inventory of finished goods equal to 20% of the next quarter’s sales. Each unit sells for $30. Forty percent of sales are on account, with the remainder being cash sales. Credit customers pay 90% during the quarter the sale was made and the balance during the following quarter.

16. How much are budgeted cash collections for the third quarter?

a. $395,280

b. $380,160

c. $356,400

d. $396,000

17. Production in units for the third quarter should be budgeted at

a. 13,080

b. 13,320

c. 15,760

d. 12,600

Answer all please!

In the Keynesian theory of consumption, an increase in the propensity to save will:

Homework 6

Topic:

• Choose an industry (sports, consumer goods, health, durable goods,

  retails etc.) Sports industry

• Choose a firm in this industry. Nike

• Discuss how this firm can increase its profitability. Identify the short-

  run and long-run strategies. Provide numerical support, if possible. Be

  as specific as possible. Details:

• You will prepare the assignment in teams of two people. You can choose your teammate. If you want to work by yourself, it is allowed as well.

• Different groups cannot choose the same firm. Hence, if another group submitted the firm that you want to choose before you, you have to change your firm or your firm and industry.

• This homework assignment should not exceed 10, 1.5 spaced pages (excluding the cover page, Executive Summary, references, and other attachments).

• Include a one page long Executive Summary at the beginning.

• You may want to write the report as a government officer advising the Minister, a chief strategist in a corporation, a consultant advising a

  client, or an entrepreneur exploring investment opportunities, etc.

• we chose sports industry and our firm is nike

Mahesh graduated from college six years ago with a finance undergraduate degree. Although he is
satisfied with his current job, his goal is to become a banker. He feels that MBA degree would allow
him to achieve this goal. After examining business schools, he has narrowed his choice to Kathmandu
University, school of management, one of the renowned University in Nepal. Although internships are
encouraged by the school, to get class credit for the internship, no salary can be paid. Other than
internship, neither school will allow its students to work while enrolled in its MBA program. Assume
it is now January 1, 2020 and he is planning to accumulate Rs 710,000 including college fees and other
stationery expenses for an MBA in January 2025. Today he is thinking for a deposit in a bank that pays
11 per cent nominal interest rate. The source of income that he received quarterly from his current job
is Rs 65,000. Out of his quarterly income he spends 65 per cent amount for his living. His mother has
also deposited Rs 200,000 in his account to facilitate his MBA degree. In order to attain his goal, you
are required to answer the following: [1+2+2+2+1+2=10]
a. How much must he deposit in lump sum on January 1, 2020 to accumulate a university fees along
with stationery expenses of Rs 710,000 on January 1, 2025?
b. If Mahesh wants to make equal installments on each January 1 from 2021 through 2025, how large
must each payment be?
c. If he wants to invest his quarterly salary net saving in the bank, the first payment being made at the
end of first quarter from now, how much he could accumulate in January 1, 2025? Assuming that
interest is compounded on quarterly basis.
d. What is the effective annual rate if interest is compounded monthly? Explain the difference
between annual percentage rate and effective annual rate.
e. If his bank balance of Rs 200,000 today pays 9 per cent annual interest compounded monthly, to
which value it will grow on January 1, 2025?
f. A dollar in hand today is worth more than a dollar to receive next year. Give your arguments.

Case I: Offshore Outsourcing and Imports

Imagine that you are an economist working for the Congressional Budget Office (CBO). You receive a letter from the chair of the Senate Budget Committee:

Dear CBO economist,

Congress is about to consider the president’s request to cut our country’s offshore outsourcing by 50 percent and imports of durable goods by 40 percent. Before deciding whether to endorse the request, my committee would like your analysis. I wonder if you would advise us:

1. How cutting offshore outsourcing and imported durable goods will affect the domestic investment, domestic interest rate, NCO, exchange rate and net export in our country?
2. What do you think will happen to real GDP, unemployment, and the price level in our country?
3. Is there any chance for this new policy to trigger stagflation in our economy? In case, if that happens, what kind of coordinated fiscal and monetary policy would be recommended to change the situation?

2. You estimate that by the time you retire in 35 years, you will have accumulated savings of $3.8 million.

a. If the interest rate is 10.0% and you live 15 years after retirement, what annual level of expenditure will those savings support?

b. Unfortunately, inflation will eat into the value of your retirement income. Assume a 4% inflation rate and work out a spending program for your $3.8 million in retirement savings that will allow you to increase your expenditure in line with inflation. What will be your expenditure amount in real terms for each year of your retirement?

Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table.

On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $347. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Assuming that Paymore’s labor and administrative expenses are $76 per quarter and that interest on long-term debt is $51 per quarter, work out the net cash flow for Paymore for the coming year using the below table. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)