3. In a study of the long-run and short-run demands for money, Chow estimated the following demand equation (standard errors in parentheses) for the United States from 1947:1 through 1965:4:

Mt=0.14+1.05Yt*-0.01Yt-0.75Rt

(0.15)        (0.10)       (0.05)

R²= 0.996

DW = 0.88^**

Breusch-Godfrey LM Test= 8.38^**

N = 76 (quarterly)

where:

Mt = the log of the money stock in quarter t

Yt^* = the log of permanent income (a moving average of previous quarters’ current income) in quarter t

Yt = the log of current income in quarter t

Rt = the log of the rate of interest in quarter t

a. Test for the significance of the coefficients and for the overall significance of the model.

b. What econometric problems seem likely to be in this equation?

c. In particular, are there are any problems related to the coefficient of Y? If so, are these problems more likely to have been caused by multicollinearity, serial correlation, or heteroskedasticity?

d. What suggestions would you have for another estimation of this equation? Why?

3. In a study of the long-run and short-run demands for money, Chow estimated the following demand equation (standard errors in parentheses) for the United States from 1947:1 through 1965:4:

Mt=0.14+1.05Yt*-0.01Yt-0.75Rt

                                                                              (0.15)        (0.10)       (0.05)

R²= 0.996

DW = 0.88^**

Breusch-Godfrey LM Test= 8.38^**

N = 76 (quarterly)

where:

Mt = the log of the money stock in quarter t

Yt^* = the log of permanent income (a moving average of previous quarters’ current income) in quarter t

Yt = the log of current income in quarter t

Rt = the log of the rate of interest in quarter t

a. Test for the significance of the coefficients and for the overall significance of the model.

b. What econometric problems seem likely to be in this equation?

c. In particular, are there are any problems related to the coefficient of Y? If so, are these problems more likely to have been caused by multicollinearity, serial correlation, or heteroskedasticity?

d. What suggestions would you have for another estimation of this equation? Why?

roblem 7-25A Schedule of Expected Cash Collections; Cash Budget [LO7-2, LO7-8] Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin its third quarter, in which peak sales occur. The company has requested a $40,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Herbal Care has experienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data have been assembled: a. On July 1, the beginning of the third quarter, the company will have a cash balance of $52,500. b. Actual sales for the last two months and budgeted sales for the third quarter follow (all sales are on account): May (actual) $ 390,000 June (actual) $ 430,000 July (budgeted) $ 550,000 August (budgeted) $ 760,000 September (budgeted) $ 390,000 Past experience shows that 25% of a month’s sales are collected in the month of sale, 70% in the month following sale, and 3% in the second month following sale. The remainder is uncollectible. c. Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: July August September Merchandise purchases $ 330,000 $ 456,000 $ 234,000 Salaries and wages $ 43,500 $ 62,000 $ 63,000 Advertising $ 220,000 $ 143,000 $ 103,000 Rent payments $ 9,400 $ 9,400 $ 9,400 Depreciation $ 10,500 $ 10,500 $ 10,500 Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $258,000. d. Equipment costing $10,000 will be purchased for cash during July. e. In preparing the cash budget, assume that the $40,000 loan will be made in July and repaid in September. Interest on the loan will total $1,200. Required: 1. Prepare a schedule of expected cash collections for July, August, and September and for the quarter in total. 2. Prepare a cash budget, by month and in total, for the third quarter. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

Herbal Care Corp., a distributor of herb-based sun screens, is ready to begin its third quarter, in which peak sales occur. The company has requested a $40,000, 90-day loan from its bank to help meet cash requirements during the quarter. Since Herbal Care has experienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. In response to this request, the following data has been assembled. a. On July 1, the beginning of the third quarter, the company will have a cash balance of $44,500. b. Actual sales for the last two months and budgeted sales for the third quarter follow: May (actual)……………………$250,000 June (actual)……………………300,000 July (budgeted)…………………400,000 August (budgeted)………………600,000 September (budgeted)…………..320,000 Past experiences show that 25% of a month’s sales are collected in the month of the sale, 70% in the month following the sale, and 3% in the second month following the sale. The remainder is uncollectible. c. Budgeted merchandise purchases and budgeted expenses for the third quarter are given below: July August September Merchandise purchases……..$240,000 $350,000 $175,000 Salaries and wages…………….45,000 50,000 40,000 Advertising…………………...130,000 145,000 80,000 Rent payments…………………. 9,000 9,000 9,000 Depreciation…………………...10,000 10,000 10,000 Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases on June 30, which will be paid during July, total $180,000. d. Equipment costing $10,000 will be purchased for cash during July. e. In preparing the cash budget, assume that the $40,000 loan will be made in July and repaid in September. Interest on the loan will total $1,200. BUDGETING -Worksheet Required: 1. Prepare a schedule of expected cash collections for July, August, and September and for the quarter in total. 2. Prepare a cash budget, by month and in total, for the third quarter. 3. If the company needs a minimum cash balance of $20,000 to start each month, can the loan be repaid as planned? Explain.  

Problem 7-25A Schedule of Expected Cash Collections; Cash Budget [LO7-2, LO7-8]

15. When we say that income is a flow variable, we mean that: 1. income is measured at a given point in time 2. income is very liquid 3. income is measured over a period of time 4. income is another word for money

25. Which of the following statements is true? 1. Wealth increases when C exceeds income 2. Wealth is a flow variable

3. Wealth increases when income exceeds C 4. A and B are both true

26. The initial seller of a bond is considered to be the: 1. lender 2. lender or the borrower, depending on how the funds are used 3. borrower 4. lender or the borrower, depending whether interest rates are rising or falling

29. When you borrow from a bank to buy a new car, you are participating in the process of: 1. Direct finance 2. Indirect finance 3. primary finance 4. principal finance

30. Which of the following statements is true? 1. inflation makes everyone worse off since they have to pay higher prices 2. deflation makes everyone worse off since incomes are falling 3. inflation redistributes income 4. deflation harms people who are on fixed income

1) Say that in year 1 both K and L have values of 1 while in year 10 K has a value of 1.35 and L has a value of 1.1. What is the annual rate of change for k (note the lower case, its not K)?

2)

China currently faces what demographic issue?

4)

Over the last four decades the Lorenz Curve in the U.S. has

5)

The holdup problem illustrates

On January 1, 2020, Sarasota Company purchased 10% bonds having a maturity value of $380,000, for $410,343.38. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sarasota Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare the journal entry at the date of the bond purchase.Prepare a bond amortization schedule.Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020.Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021.

DO YOU AGREE OR DISAGREE AND WHY?

The issue of physician geographic maldistribution and imbalance is a growing problem with a projected need of 46,100 to 90,400 physicians by 2025 (Shi, 88). The problem is multi-faceted, yet this discussion acknowledges physicians gravitated towards specialization (62%) instead of primary care (38%) according to the National Center for Health Statistics in 2015. Industrialized nations typically see at least half are generalists. Higher pay, better work hours, and prestige are believed to have lead to this imbalance. Metropolitan and suburban areas are better served than rural and inner-city populations that are thought of as the so called underserved populations (Ibid, 90).

Please compose a research paper of 3-5 pages (not including cover and references) about the future trends of Long Term Care in the next 10 years.

Hypothesize, how YOU think Long Term Care will be like in 2025 and support your theory with facts.

What trends do you think would develop to face the future challenges? What regulations will be established?

What laws will possibly be eliminated or reinforce if any?

In your paper, include all aspects of long term care such as SNF, Assisted Living, Home Care, Adult Day Care and Insurance Long term care reimbursement both private and public.