In November (and, technically, December) of 2016, Donald Trump was elected President of the United States, regardless of the fact that Hillary Clinton won nearly 3 million more votes. This reminded many Americans that the president is elected by the Electoral College, not by the public; thus, rather than DIRECTLY electing the president, we (At best) indirectly elect them. What I ask you is this: in terms of the principal-agent relationship this establishes, does this give the public sufficient control over the presidency? Why, or why not?

Downtown Street, a British Company, is considering establishing an operation in the United States to assemble and distributes top hats. The initial investment is estimated to be £20,000,000 (British pounds - GBP) which is equivalent to US$23,000,000 at the current exchange rate. Given the current corporate income tax rate in the United States, Downtown Street estimates that total after-tax annual cash flow in each of the three years of the investments life would be US$10,000,000, US$12,000,000, and US$15,000,000, respectively. However, the U.S. national legislature is considering a reduction in the corporate income tax rate that would go into effect in the second year of the investment’s life, and would result in the following total annual cash flows: US$10,000,000 in year 1, US$14,000,000 in year two, and US$18,000,000 in year three. Downtown Street estimates the probability of the tax rate reduction occurring at 50%. Downtown Street uses a discount rate of 12% evaluating potential capital investments. Present value factors are as follows:

Period PV Factor

1 0.893

2 0.797

3 0.712

The U.S. operation will distribute 100% of its after-tax annual cash flow to Downtown Street as a dividend at the end of each year. The terminal value of the investment at the end of three years is estimated to be US$25,000,000. Neither the dividends nor the terminal value received from the U.S. investment will be subject to a British income tax.

Exchange rate between GBP and USD are forecasted as follows:

Year 1 GBP 0.74 = USD 1.00

Year 2 GBP 0.70 = USD 1.00

Year 3 GBP 0.60 = USD 1.00

Determine the expected net present value of the potential US investment from a parent company perspective.

Fresh!Now! is a chain of grocery stores in the United States with 1394 grocery stores in total, some of which also sell bakery goods and freshly made food-to-go. Fresh!Now!’s goal is to provide good quality fresh vegetables at affordable prices. However, given the existing market of organic food supplies, Fresh!Now! is facing tremendous competition. They realize that Fresh!Now! has to make their stores more attractive to customers.

In 19 stores across Massachusetts and New York, they have implemented a new concept to present the vegetables in the stores and have collected information of the average daily profit of leafy vegetables (in dollar) per customer per store (see table below). Janine, the head of the analytics department at Fresh!Now!, has tasked you with developing an anlaysis to better understand if the new concept has any effect.

Your first task it to create a 95% confidence interval for the mean of the dataset using the sample collected from Massachusetts and New York.

What is the upper limit of this confidence interval?

Round your answer to three decimals places (e.g. if your calculation results in 12.9237 put in 12.924).

What is the lower limit of this confidence interval?

Round your answer to three decimals places (e.g. if your calculation results in 12.9237 put in 12.924).

Part2

To understand if the new concept has taken effect, you want to conduct a hypothesis test. Average daily profit per customer per store for the leafy vegetables in all other Fresh!Now! grocery stores is 13.5.

You formulate the following hypothesis test:

H0: Average daily profit at Fresh!Now! in the New York/Massachusetts stores is not higher than the average daily profit of all other Fresh!Now! grocery stores at a confidence level of 95%.

H1: Average daily profit at Fresh!Now! in the New York/Massachusetts stores is higher than the average daily profit of all other Fresh!Now! grocery stores at a confidence level of 95%.

Calculate the test-statistic for the hypothesis test above.

Round your answer to three decimal places (e.g. if your calculation results in 12.9237 put in 12.924).

1. (15 pts) 52% of adults in the United States are women and 48% are men. The heights of the men follow an approximately normal distribution with mean 69.1 inches and standard deviation of 2.9 inches. The heights of the women are approximately normally distributed with mean 64.5 inches and a standard deviation of 2.7 inches. Suppose that we select 10 adults at random from the U.S. population.

If a simulation produced a random selection of 10 adults with

The average height as 68.186572 inches

Max height of 73.16397 inches

A) Calculate the 95% prediction interval for the average height of a random sample of 10 adults

B) Calculate 95% prediction interval for the maximum height of a random sample of 10 adults.

(20.4) The exchange rate between the United States of Albion (U.S.A.) and the Republic of Oz is now 1:1 with inflation in both countries expected to be 2% and interest rates 4%.

What does PPP imply about the exchange rate in 20 years time?

If inflation in the U.S.A. increases to 3% how does your answer change?

What happens to the current exchange rate if U.S.A. interest rates rise to 5% along with inflation increasing to 3%?

a. In early 2001 investment spending sharply declined in the United States. This event caused a

multiple choice 1

• rightward shift in aggregate demand, and more investment would have caused a rightward shift in aggregate supply.

• rightward shift in aggregate demand, and lower investment would have caused a leftward shift in aggregate supply.

• leftward shift in aggregate demand, and lower investment would have caused a leftward shift in aggregate supply.

• leftward shift in aggregate demand, and less investment would have caused a rightward shift in aggregate supply.

b. In the two months following the September 11, 2001, attacks on the United States, consumption also declined. This event caused a

multiple choice 2

• rightward shift in aggregate demand, and lower investment would have caused a leftward shift in aggregate supply.

• leftward shift in aggregate demand, and lower investment would have caused a leftward shift in aggregate supply.

• rightward shift in aggregate demand, and more investment would have caused a rightward shift in aggregate supply.

• leftward shift in aggregate demand, and less investment would have caused a rightward shift in aggregate supply.

A poll conducted in 2012 asked a random sample of 1358 adults in the United States how much confidence they had in banks and other financial institutions. A total of 149 adults said that they had a great deal of confidence. An economist claims that less than 13% of U.S. adults have a great deal of confidence in banks. Can you conclude that the economist's claim is true? Use both α=0.10 and α=0.01 levels of significance and the P-value method with the TI-84 Plus calculator.

a. state null and alternative hypothesis. what tail is the hypothesis test?

b. Compute the value of the test statistic.

c. Using α=0.10, can you conclude that greater than 71% of emails are spam?

d. Using α=0.01, can you conclude that greater than 71% of emails are spam?

e. state conclusion

In the United States, 7.8% of the population has diabetes. The CDC compiles data from an SRS of 1200 people.

a.What would be the mean number of people who have diabetes from such a sample? What would be the standard deviation?

b.Use the Normal approximation to estimate the probability that at least 115 people (out of the 1200) would have diabetes?

Open a new thread on the discussion board. Many product markets in the United States are monopolisticaly competitive due to the use of product differentiation. What is product differentiation? How does product differentiation give a company market power especially over pricing? Give one or two examples of products that sustain higher pricing due to product differentiation. Is this justified?

According to the course text, the United States has employed a worldwide system of taxation for the past 100 years. The Tax Cuts and Jobs Act (TCJA) upended this system. Imagine you are an international tax consultant advising a client on the impact of P.L. 115-97, the law known as the Tax Cuts and Jobs Act, on the taxation of a controlled foreign corporation (CFC).

• Analyze two changes to CFCs and advise your client on the actions necessary to reduce current and future tax liability as a result of these charges.
• Create a scenario reflecting the taxation under the prior tax and current law to support your recommendations.