Part 2: Transforming data and computing descriptive statistics

Create a quarterly real GDP series by dividing nominal GDP by the GDP deflator. Also, create a money velocity series as PY/M where P is the price level, Y is real GDP, and M is the M3 money supply measure.

a. Plot the velocity of money (produce a graph similar to Figure 8.2 on page 212 of the textbook). Has velocity risen or fallen over the sample period? b. What is the mean and standard deviation of M3 velocity?

picture from textbook: https://media.cheggcdn.com/media%2Fb3d%2Fb3d56712-5053-405f-83e0-88009e1d6240%2FphpGAezM0.png

data to be used:

Using the circular flow of income model, supported by a diagram, show the effect on an economy such as the UK, of a fall in investment by British firms and a reluctance by Chinese companies to buy goods from the UK.

Word Limit: 200 words

On 27 March 2020, the Fitch credit rating agency downgraded UK sovereign credit rating to AA- with a ‘negative’ outlook. What are the potential effects of this downgrade on the UK yield curve and GDP? Explain your answer.

The UK’s decision to leave the EU was the result of:

Group of answer choices

An overwhelming vote in Parliament.

A referendum.

An order from Queen Elizabeth.

A "kick-them-out" vote by the other EU members.

Flag this Question

Question 591 pts

As discussed in the lecture on Brexit:

Group of answer choices

The UK has now officially left the EU.

The UK has not yet left the EU

Brexit is currently in limbo awaiting a new UK vote on whether to go through with it

None of the above.

Flag this Question

Question 601 pts

As noted in lecture, a major sticking point in the Brexit negotiations is

Group of answer choices

Concern that the UK will gain a competitive advantage by lowering its regulatory standards

Fishing

Both A and B

None of the above

In 2016 UK residents voted in favor of Brexit, a proposal to leave the European Union and thereby cancel the UK’s free trade arrangement with the EU. Pro-Brexit analysts have argued that, if the UK now signs a free trade agreement (FTA) with the United States, this U.S.-UK FTA would offset any UK trade losses due to Brexit.

Basing your answer on the simplest gravity model of international trade, do you think the pro-Brexit analysts are correct? The economies of the European Union and the United States were approximately the same size, at $18.8 trillion and $19.4 trillion, respectively, in 2017.

What are some other factors you might want to add to your gravity model in order to strengthen your analysis?

What is a market boundary and how is it determined?

Janice Corporation UK is public corporation which manufactures a technology. Janice uses fair value measurement for the measurement of all assets of its business. Required: In regard to the Janice Corporation UK, discuss the economic consequences concept which holds that economic practices which a company adopts may affect its security price and value. Discuss the pros and cons of fair value and make a recommendation to Janice Corporation UK and support your decisions regarding the measurement of company assets.

Twinings (a UK firm) buys £1 billion of tea leaves from India using money from its Indian bank account. It brings the tea to the UK. In the UK, it uses the tea leaves to make boxes of tea, and sells 500 million boxes back to India, each for a price of £2. It then credits the resulting revenue of £1 billion back into its Indian bank account. What happens to the UK’s balance of payments as a result of this transaction?

Please provide a full answer.

2. In a model of dynamic increasing returns, illustrate an alternate scenario to what we discussed in class and briefly explain using words. In this scenario, France protects its cotton industry with a temporary blockade, but after the blockade ends the protection is not enough for France to retain an advantage in cotton production, and once UK cotton is no longer blockaded, that the UK will recover its initial advantage. Be sure to draw and label any necessary learning curves (UK and France), and any relevant points on the curves.