A deferred annuity is purchased with a lump sum amount of $308,273.17. Suppose money is worth 5% compounded quarterly, and 13 years after the 5 year deferral period, the account is empty. Use this information to compute how much the annuity will pay per quarter after the deferral period.

Consider a stock with a beginning of the year price of 21. The stock's dividends and quarterly stock price are as follows:

The effective annual yield on this stock is ____________.

A prize pays $16,000 each quarter for 4 years (16 payments)commencing in exactly 6 months’ time. If the appropriate discount rate is 9.7% p.a compounding quarterly, the value of the prize today is (round to nearest cent; don’t use $ sign or commas): [HINT: the annuity is deferred]

The next several questions refer to the case of an economy with the following equations:

Y = 3K + 2L, with K = 1000 and L = 1500

G = 1230, T = 500

I = 1020 - 1000r

C = 1070 + 0.5(Y-T)

(Assume a closed economy: Y = C + I + G; NX = 0)

Compute the equilibrium level of the interest rate.

compute the equilibrium level of investment.

compute teh equilibrium level of consumption.

suppose government spending is raised to 1250 (instead of 1230). Compute the amount by which investment falls.

the amount by which investment falls is _____ the amount by which government spending rises.

Now change the model above so that the consumption function involves the interest rate as follows:

C = 1070 + 0.5(Y-T) - 1000r

Compute the equilibrium values of the interest rate and investment for the cases of G=1230 and G=1250. How much is investment crowded out now by the rise in G? Report below the amount by which investment falls when G rises from 1230 to 1250.

Great recession in 2008 experienced the burst of housing market bubble, which led financial market crisis.

You were hired as a chief economic advisor in a major corporate, and they would like to know more about macroeconomic conditions in 2008.

Your responded one of followings;

1. Aggregate demand fell in 2008. Here are the reasons; Unemployment and lower income, resulting from a drop in consumer spending and investment, meant governments took in less in tax revenue. This caused government spending to drop.
2. The Great Recession was caused by the Fed’s policy which created artificially low interest rates, and Government housing policy which encouraged bad mortgages.
3. Recovery was slow because of productivity decrease from 2005, and policy uncertainty in 2008.
4. Aggregate demand fell in 2008 because the Fed policy was not expansionary enough.

Explain your response based on the economic theory that you are subscribing (eg.  Real business cycle theory, Keynesian, Austrian, Monetarists etc.).

1. For the table shown, answer the following questions:

1. What is the marginal propensity to consume for households in this economy?
2. Based on the assumptions of our aggregate expenditure model, fill in the columns for planned investment, government spending, and net exports. What is this type of expenditure called?
3. For each level of actual aggregate expenditure, calculate unplanned inventory investment.
4. What is the equilibrium level of aggregate expenditure in this economy? How do you know?
5. For each level of actual aggregate expenditure, label the future output tendency as “increase,” “decrease,” or “same” based on what you expect to happen to future output. What relationship does this categorization have to your answer in part d?

The above table represents data for TTYL during 2015. The values are in millions of dollars. Answer the following questions accordingly.

1. What is the value of gross national expenditure?
2. What is the value of gross domestic product?
3. What is the value of foreign income payments to domestic factor services?
4. What is the value of current account for TTYL?
5. What is the value of gross national disposable income?
6. What is the value of national saving in TTYL?
7. [6 points] During the next year, 2016, TTYL experienced an increase in investment spending, and at the same time, the government budget went from a deficit to surplus. All else equal, how would these two changes affect the current account balance? Explain why.

1. For the table shown, answer the following questions:

1. What is the marginal propensity to consume for households in this economy?
2. Based on the assumptions of our aggregate expenditure model, fill in the columns for planned investment, government spending, and net exports. What is this type of expenditure called?
3. For each level of actual aggregate expenditure, calculate unplanned inventory investment.
4. What is the equilibrium level of aggregate expenditure in this economy? How do you know?
5. For each level of actual aggregate expenditure, label the future output tendency as “increase,” “decrease,” or “same” based on what you expect to happen to future output. What relationship does this categorization have to your answer in part d?

Suppose a health expenditure function is specified in the following manner: ? = 500 + 0.2?, where E represents annual health care expenditures per capita and Y stands for income per capita.

A. Graph the health care expenditure function.

B. What is the implication of the y-intercept? (provide the economic intuition not the mathematical definition)

C. Using the slope of the health expenditure function, predict the change in per capita health care expenditures that would result from a $1,000 increase in per capita income.

D. Assume the fixed amount of health care spending decreases to $250. Graph the new and original health functions on the same graph. What is the relation between the original and new health care expenditure functions?

E. Now assume that the fixed amount of health care spending remains at $500 but the slope parameter on income decreases to 0.1. Graph both the original and new health care expenditure functions. Explain the relation between the two lines.