Answer:
Consider the following misperceptions model of the economy. AD: Y =600 + 10(M/P) SRAS: Y=Y +P - pe Okun's Law: (Y - Ý )/Y = - 2ệu - 4) Let 7 =750, ū=0.05, M =600, and pe =40. a. b. What is the price level? (2%) Suppose there is an unanticipated increase in the nominal money supply to 800. What is the short-run equilibrium level of output, the unemployment rate, and the price level? (3%) When price expectations adjust fully, what is the price level? (3%) C.
Explanation:
A) from SRAS : Y = 750+P-40
Y = 710+P
From AD: Y = 600+ 10*600/P
Y = 600 + 6000/P
So solving two eqn
710+P = 600+6000/P
110 + P = 6000/P
P* = 40
Y* = 150
b) now M = 800
So new AD :
Y = 600+8000/P
So, as Y = 710+P
So at eqm
710+P = 600+8000/P
110+P = 8000/P
P' = 50
Y' = 710+50 = 760
from Okun law
(760-750)/750 = -2(u - .05)
1/75 = -2u + .1
2u = .0867
u = .0433
c) when price expectations adjust,then
Y = Y_bar = 750 : potential GDP
SRAS shifts upwards
So from AD:
750=600+10*800/P
P = 800/15
= 53.33
Answer:
(a) rr: 1/3, cr: 0.5, m:1.8 M: 1800
(b) 1500
(c) 200
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The company currently sells 700 containers a month at a sales price of $24 per unit. The addition of a new disinfectant will result in a sales price of $26 per unit for the improved product. It would cost a total of $4,000 per month to alter.
First, we need to calculate the current sales level:
Sales= 700*24= $16,800
Now, we can calculate the new income:
Sales= 700*26 - 4,000= $14,200
It is more convenient to not apply the disinfectant.
Answer:
EOQ: 80
order per year: 10
Explanation:
We need to solve for the Economic Order Quantity:
Where:
D = annual demand = 800
S= setup cost = ordering cost = 16
H= Holding Cost = 4
EOQ = 80
Orders per year = 800 demand/ 80 order size= 10
Answer:
The multiple choices are:
A) $46,050 B) $68,590 C) $85,190 D) $29,450 E) $62,650
Option E is the correct option,$62,650
Explanation:
The operating cash flow=net income+incremental depreciation
the operating cash flow=$46050+$16,600=$62650
The incremental taxes have already been factored into the computation of the net income, hence it is,it is expected that the depreciation would just be added to the net income in a bid to ascertain operating cash flow of the business
