This is observation from previous years about the impact of students working while they are enrolled in classes, due to students too much work, they are spending less time on their classes. First, the observer need to find out, on average, how many hours a week students are working. They know from previous studies that the standard deviation of this variable is about 5 hours. A survey of 200 students provides a sample mean of 7.10 hours worked. What is a 95% confidence interval based on this sample?

((NO HANDWRITING PLEASE))

Analyze the effect of the following events on the economy. Make sure to explain everything step-by-step. The example is provided in the first task.

a) The central bank increases the money supply.

Ms increases => interest rate decreases => investment increases =>Y increases

On the graph: LM shifts to the right; at the new equilibrium point, Y increases, interest rate decreases.

b) The government increases taxes.

c) The government increases government spending.

d) MPC increases.

e) the tax rate decreases.

1.Contractionary fiscal policy is intended to combat _______.

a.inflation

b.surpluses

c.stagnation

d.recessions

2.How does a regressive tax function?

a.It targets wages instead of other ways that people earn money.

b.It targets specific kinds of consumption most common among the wealthy.

c.It collects less money for the government as the economy grows.

d.It collects a higher rate from people with lower incomes.

3.Suppose a city introduces a 5% tax on the sale of all sodas and pre-sweetened drinks. This is an example of a(n) _______ tax.

a.proportional

b.marginal

c.excise

d.progressive

4.Which type of tax funds the Social Security and Medicare programs?

Payroll taxes

Individual income taxes

Corporate income taxes

Excise taxes

5.In 2014, interest payments on the national debt represented what percentage of federal spending?

Less than 1%

Over 10%

Roughly 2%

Roughly 6%

6.Evaluate whether going to war is an example of fiscal policy.

No, because going to war does not have any effect on the national economy.

Yes, provided the war is large enough to stimulate the economy.

No, because the primary goal of going to war is to improve national security not to improve the economy.

Yes, because any government spending program is, by definition, fiscal policy.

7.Suppose an economist recommends raising payroll taxes and cutting government investment in research and development. This is most likely a response to _______.

excessive economic growth

the onset of a recession

the effects of a recognition lag

steadily increasing deficits

8.Enacting an expansionary fiscal policy has which effect on the economy?

It shifts the long-run aggregate supply curve rightward.

It shifts the short-run budget curve leftward.

It shifts the aggregate demand curve rightward.

It shifts the short-run aggregate supply curve leftward.

9.Which feature of the Social Security tax makes it regressive?

It has a wage ceiling above which no tax is collected.

It funds a specific program rather than general government operations.

It is a payroll tax that comes directly out of workers' paychecks.

It is a flat tax set at 12.4% for all wage earners.

10.Which statement explains how automatic stabilizers function?

They prevent deficits from rising too quickly by adjusting tax rates to match government spending.

They adjust aggregate demand without requiring the government to make changes to fiscal policy.

They limit interest payments on the national debt by lowering interest rates when deficits climb.

They keep the unemployment rate low without the need for additional government spending.

11.What is the largest source of spending by state and local governments?

Healthcare

Social services

Education

Police and fire protection

12.Expansionary fiscal policy tends to lead to an increase in _______.

consumer spending and marginal tax rates

interest rates and private savings

tax revenues and wages

deficits and prices

13.Fiscal policy changes can face an implementation lag because _______.

it takes time to put new government programs into place

the legislative process tends to be highly cumbersome

economic statistics register changes in the economy very slowly

automatic stabilizers tend to mask the onset of recessions

14.What effect does an expansionary fiscal policy have on the financial capital market when the government is already running a deficit?

It shifts the supply curve downward.

If shifts the demand curve to the left.

It shifts the demand curve to the right.

It shifts the supply curve upward.

15.The standardized employment budget corrects for the existence of _______.

automatic stabilizers

budget deficits

payroll taxes

discretionary fiscal policy

16.Food stamps and unemployment insurance programs are examples of _______.

contractionary fiscal policy

standardized employment regulations

automatic stabilizers

discretionary government spending

1) In the short-run (AE) macro model, assume that inventories are increasing. This means that

a) output is less than aggregate expenditures.
b) output is unrelated to aggregate expenditures.
c) output is greater than aggregate expenditures

d) the economy is in equilibrium.

2) In the short-run (AE) macro model, consider a situation where inventories are increasing. This means that in the next period,

a) output will not change

b) output will decrease.
c) output will increase.
d) technology will improve.

3) Suppose GDP is $5000 and aggregate expenditure is $4400. Inventories will

a) decrease by $600
b) increase by $400
c) increase by $600

d) decrease by $400

4) If the output level is such that the aggregate expenditure is above the Y=AE line (45-degree line), which of the following is true?

a) AE is less than output, so inventories will increase and output will be lowered.
b) AE is greater than output, so inventories will decrease and output will be increased.

c) AE is less than output, so inventories will decrease and output will be raised.
d) AE is greater than output, so inventories will increase and output will be raised.

5) When the interest rate increases which of the following is most likely to occur:

a) the value of the US dollar will change
b) firms will be less likely to purchase new machines
c) Tesla stock will be purchased

d) more expensive household items will be purchased

6) A decrease in the value of stocks should cause

a) an increase in wealth.
b) a decrease in consumption spending.
c) an increase in consumption spending.

d) no change in consumption spending.

7) Which of the following is considered a government expenditure and part of G?

a) Social Security benefits paid to a retired worker
b) A new car bought by a government employee
c) Tuition paid by students at a public school

d) Construction on a highway

8) Assume the government decides to increase G today. Which of the following is the most certain likely outcome associated with the increase in G?

a) the debt-to-GDP ratio decreases in the short-run

b) high-income households are better off
c) low-income households are better off
d) the debt-to-GDP ratio increases in the short-run

9) The National Debt Clock showing a debt of 21 trillion and rising

a) is misleading because they do not show industrial production figures.
b) is misleading because they show the debt in nominal dollars rather than real dollars.
c) is needed to inform the American public about the massive amounts of debt the government is accumulating.
d) is misleading because they show the debt in dollars rather than as a percentage of GDP.

• Assume that the economy is in equilibrium. The equilibrium level of output is 100,000, the money supply is 1 billion dollars and the price level in the economy is 100. (Questions 10-12)

10) In this economy, $100 bonds are being sold for $96. What is the interest rate on bonds in this economy?
a) 4.17% b) 3.75% c) 4.38% d) 4.00%

11) The Federal Reserve believes that the full-employment level of output (Y-bar) is 75,000. In order to bring the economy back to full-employment equilibrium, they should ______ bonds and the price of bonds should _____.
a) sell bonds, decrease
b) purchase bonds, increase

c) sell bonds, increase
d) purchase bonds, decrease

12)After the interest rate change in the previous question, the aggregate expenditure curve will _____ because _____ will ______.
a) decrease, autonomous consumption and planned investment spending, decrease

b) increase, autonomous consumption and planned investment spending, increase

c) decrease, autonomous consumption and government expenditures, decrease
d) increase, government expenditures and planned investment spending, increase

13) Monetary policy is defined as
a) changes in the tax rate.
b) changes in spending by the Government.
c) changes in the interest rate.
d) changes in the money supply by the Federal Reserve

Exercise 20-17

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2017, the company incurred the following costs.

Variable Costs per Unit
Direct materials $7.80
Direct labor $3.59
Variable manufacturing overhead $6.03
Variable selling and administrative expenses $4.06

Fixed Costs per Year
Fixed manufacturing overhead $231,400
Fixed selling and administrative expenses $218,504

Siren Company sells the fishing lures for $26.00. During 2017, the company sold 79,000 lures and produced 89,000 lures.

Assuming the company uses variable costing, calculate Siren’s manufacturing cost per unit for 2017. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit
$

LINK TO TEXT

Prepare a variable costing income statement for 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

SIREN COMPANY
Income Statement

December 31, 2017
For the Quarter Ended December 31, 2017
For the Year Ended December 31, 2017
Variable Costing

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

LINK TO TEXT

Assuming the company uses absorption costing, calculate Siren’s manufacturing cost per unit for 2017. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit
$

LINK TO TEXT

Prepare an absorption costing income statement for 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

SIREN COMPANY
Income Statement

December 31, 2017
For the Quarter Ended December 31, 2017
For the Year Ended December 31, 2017
Absorption Costing

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

LINK TO TEXT

Question Attempts: Unlimited
SAVE FOR LATER
SUBMIT ANSWER

The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function.

1.    What are the equilibrium real wage rate and the level of employment?
2.     What is potential GDP? If you cannot determine a precise amount, give the range in which potential GDP must lie
3.     List five shortcomings of GDP which result in GDP not being a accurate measure of a countries well being

Question 1:

It is now May 16, 2020. “Ace Engineering” of Oakland California has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the global market. As a result, the firm is expected to experience a 30% annual growth for the next five years. By the end of five years other firms will have developed comparable technology, and Ace’s growth rate will slow to 8% per year indefinitely. Stockholders require a return of 12% on the firm's stock. The most recent annual dividend D_0, which was paid yesterday, was $1.50 per share.

a. Calculate the expected dividends for 2020 through 2025.

b. Calculate the value of the stock today. Assume that the stock is traded at the NASDAQ with a price of $120. Is this stock Overvalued/Undervalued?

c. Calculate the Dividend yield in 2020.

d. How does this model differs from a TWO STAGE Model that we have learned in class. Comment analytically.

e. What do we mean by the term Market Efficiency? Do you believe that Markets are Efficient? Carefully explain your answer.

Consider the bond below.
A semi-annual coupon paid March 31 & September 30:
Par Value $1000 ; Coupon rate7%; Purchase date 6/30/2020; Yield to maturity 9%; Final maturity date 3/31/2025

1. What is the clean price if the bond was purchased on June 30, 2020?

2.What is the full invoice price if the bond was purchased on June 30, 2020?