Although our development of the Keynesian cross in this chapter assumes that taxes are a fixed amount, most countries levy some taxes that rise automatically with national income. (Examples in the United States include the income tax and the payroll tax.) Let’s represent the tax system by writing tax revenue as

T= ̄ ̄T+tY,

where ̄ ̄T and t are parameters of the tax code. The parameter ̄ ̄T is a lump-sum tax (or, if negative, a lump-sum transfer).
The parameter t is the marginal tax rate: if income rises by $1, taxes rise

by t×$ 1.

1. How does this tax system change the way consumption responds to changes in GDP?

2. In the Keynesian cross, how does this tax system alter the government - purchases multiplier?

3. In the IS–LM model, how does this tax system alter the slope of the IS curve?

The U.S. Bureau of Labor Statistics released hourly wage figures for various countries for workers in the manufacturing sector. The hourly wage was $30.67 for Switzerland, $20.20 for Japan, and $23.82 for the U.S. Assume that in all three countries, the standard deviation of hourly labor rates is $3.00.

Appendix A Statistical Tables

a. Suppose 35 manufacturing workers are selected randomly from across Switzerland and asked what their hourly wage is. What is the probability that the sample average will be between $30.00 and $31.00?
b. Suppose 37 manufacturing workers are selected randomly from across Japan. What is the probability that the sample average will exceed $21.00?
c. Suppose 48 manufacturing workers are selected randomly from across the United States. What is the probability that the sample average will be less than $22.90?

(Round the values of z to 2 decimal places. Round your answers to 4 decimal places.)

Part III: Interest Rate Parity and Covered Interest Arbitrage
Assume the following information:

1. ​According to Interest Rate Parity, is the covered interest arbitrage feasible to U.S. investors and Australian investors? Please explain your answers (20 points).
2. Suppose an U.S. investor can borrow up to $500,000 to invest and an Australian investor can borrow up to Australian $800,000 to invest. How much is the covered interest rate arbitrage profit for the U.S. investor and Australian investor if the covered interest arbitrage is feasible to them (20 points)?

The U.S. Bureau of Labor Statistics released hourly wage figures for various countries for workers in the manufacturing sector. The hourly wage was $30.67 for Switzerland, $20.20 for Japan, and $23.82 for the U.S. Assume that in all three countries, the standard deviation of hourly labor rates is $3.00.

Appendix A Statistical Tables

a. Suppose 40 manufacturing workers are selected randomly from across Switzerland and asked what their hourly wage is. What is the probability that the sample average will be between $30.00 and $31.00?
b. Suppose 37 manufacturing workers are selected randomly from across Japan. What is the probability that the sample average will exceed $21.00?
c. Suppose 49 manufacturing workers are selected randomly from across the United States. What is the probability that the sample average will be less than $23.00?

(Round the values of z to 2 decimal places. Round your answers to 4 decimal places.)

● Discuss the types of financial institutions involved in the financial market and the markets they serve. Be sure to distinguish between the primary and secondary markets and the money and capital markets.

● Discuss what it means when it is said that markets are “efficient” and include an explanation of whether this seems true today.

● Discuss the role of regulators in the financial market. Your discussion should include information about the importance of accounting as a key to the success of those regulators.

● Many factors impact interest rates in the financial market and those rates drive the operations of the institutions. The price of money is interest rates; the financial markets determine that price in a very traditional economic sense of demand and supply of money. With this in mind, discuss the impact of a recession, the impact of the money supply, and the impact of international rates.

● Briefly discuss the concepts of Nominal Rate of Interest and Real Interest Rates. Include an example of both.

**This is for Financial Markets in the United States**

Identify and describe the current state of the health care industry or a particular segment of the healthcare industry using the Microeconomic concepts and tools we have studied this semester. You will find an overview of the economics of health care in chapter 30 and a discussion of Medicare in Chapter 5. For this week, you will want to supplement this reading with research from a newspaper or newsmagazine or from a reputable online source that deals with U.S. Healthcare.

For this week your post should:

1. List the pros and cons related to the current system in place in the United States along with a short explanation of health insurance and how it relates to this debate.
2. Apply either supply and demand analysis (week 2 material) or elasticity analysis (week 3 material) or the examination of market structures (weeks 4-5 material).
3. Develop your own solution to this social issue, but you must understand and explain the economic costs of your decision.

You are a partner in a regional CPA firm, Swearingen & Gray, with 14 offices covering the Eastern United States. Your firm routinely publishes and distributes reports to its clients that cover current accounting and financial reporting topics. You have been asked by James Swear- Ingen, the managing partner of your firm, to prepare such a report on the use of non-GAAP measurements in annual reports, an issue about which the SEC has recently voiced serious concern. In your report, Mr. Swearingen has asked you to cover these topics and others you consider important. • What are some of the more commonly used non-GAAP measurements? • Why is the SEC concerned about the use of such measurements? Do the necessary research for this project and write the report for Mr. Swearingen.

Write a detailed report from at least 2 pages

Media Metrix, Inc., monitors internet users in seven countries: Australia, Great Britain, France, Canada, Germany. Japan and the United States. According to recent measurement figures, US users occupy the first place in Internet use with an average of 13 hours per month (The Washington Post, August 4, 2000). Suppose that in a follow-up study involving 145 Canadian Internet users, the sample mean was 10.8 hours per month and the sample standard deviation was 9.2 hours.

a) Formulate the null and alternative hypotheses that will be used to determine if the sample data support the conclusion that Canadian internet users have a population mean lower than the US average of 13 hours per month.

b) With a = 0.01, what is the critical value for the test statistic? Express the rejection rule.

c) What is the value of the test statistic?

d) What is your conclusion?

1. A study conducted in March 2009 found that about half of U.S. adults trusted the U.S. government more than U.S. business to solve the economic problems of the United States. However, when the population is subdivided by political party affiliation, the results are very different. The study showed that 72% of Democrats trusted the government more, but only 29% of Republicans trusted the government more. Suppose that you are in charge of updating the study. You will take a national sample of Democrats and a national sample of Republicans and then try to use the results to show statistical evidence that the proportion of Democrats trusting the government more than business is greater than the proportion of Republicans trusting the government more tan business.

a. What are the null and alternative hypotheses? b.

What is a Type I error in the context of this study?

c. What is a Type II error in the context of this study?

Break-even analysis for a service company

Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.5 million direct subscribers (accounts) that generated revenue of $35,345 million. Costs and expenses for the year were as follows (in millions):

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place.

a. What is Sprint Nextel's break-even number of accounts, using the data and assumptions given?
million accounts

b. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?
$ million per account