Reference no: EM131020551
Quiz 4-
1. GDP Measurement:
a. I sell my car, a 2005 Chevrolet, for $5,000 in May of 2015. This transaction will cause GDP in 2015 to _______________________________.
b. This week my stock broker convinced me to purchase $10,000 worth of stock. When she made this purchase for me I was charged a broker commission of $200. This transaction will cause GDP in 2015 to _______________________________.
c. Susie is a farmer that produces cotton and melons that she sells in a legal market for $38,500. In addition, Susie grows a substantial vegetable garden to feed her family. She estimates that the produce she grows in this garden reduces her grocery bill by $2800 each year. Susie's activity will cause GDP in 2015 to _________________________.
d. Carter earns $40,000 working as a newspaper reporter and he reports these earnings on his tax return. In addition, he moonlights as a landscaper (lawn and gardening services plus snow removal) and gets cash payments from his customers of $5,000 per year: he does not report these earnings. The impact of Carter's activities on GDP this year can be measured as _________________________________.
2. Use the following information to answer this set of questions.
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Item
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Price in 2012
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Quantity in 2012
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Price in 2013
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Quantity in 2013
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Price in 2014
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Quantity in 2014
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Bikes
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$100
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10
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$150
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10
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$150
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20
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Pencils
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$1
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100
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$1
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100
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$2
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50
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|
Telephones
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$100
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20
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$80
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50
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$60
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80
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a. What is nominal GDP for 2012, 2013, and 2014? Provide any formula you use and show your work.
b. What is real GDP for 2012, 2013, and 2014 using 2012 as the base year? Provide any formula you use and show your work.
c. Did this economy's level of production increase, decrease, or remain the same over this three year period? Explain your answer fully.
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The source of tax revenue overwhelmingly comes
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Calculate the price elasticity of demand for parking spaces
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The average accumulated expenditures
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: Capital Co. has a capital structure, based on current market values, that consists of 21 percent debt, 17 percent preferred stock, and 62 percent common stock. If the returns required by investors are 11 percent, 11 percent, and 18 percent for the de..
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Did this economy''s level of production increase or decrease
: What is real GDP for 2012, 2013, and 2014 using 2012 as the base year? Provide any formula you use and show your work. Did this economy's level of production increase, decrease, or remain the same over this three year period? Explain your answer ful..
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What are the firms interest tax savings
: ABC has EBIT of $571,000, interest expenses of $263,000, and faces a corporate tax rate of 36%. What is ABC's net income? What would ABC's net income be if it didn't have any debt/no interest expense? What are the firm's interest tax savings?
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: Your firm is planning to issue preferred stock. The stock is expected to sell for $97.39 a share and will have a $100 par value on which the firm will pay a 14.7% divident. What is the cost of capital to the firm for the preferred stock?
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What is the current price of the common stock
: McGaha Enterprises expects earnings and dividends to grow at a rate of 25% for the next 4 years, after the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market ..
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Should the investor acquire the stock
: Company XYZ's preferred stock is selling for $26 in the market and pays a $2.60 annual divident. If the market's required yield is 11%, what is the value of the stock for that investor? Should the investor acquire the stock?
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