Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Consider the q-theory model of investment described in class. (a) Characterize the effects on q, the capital stock and investment of a one-time unexpected increase in the real interest rate.
(b) Answer the previous question if the increase in the real interest rate were announced in advance. (c)Now consider a firm attempting to decide whether and when to invest in a particular project. If the firms invents, it has to invest a fixed, ir- recoverable amount I. The value of the project V follows the following deterministic process: V = α0 +α1t. The firm discounts at the real interest rate r.
(d) Solve for the optimal time at which the firm should invest.
(e) How would an increase in the real interest rate affect the time to invest?
(f) Now suppose there are many such firms, each of which has a potential project; these firms only differ in that they discover the existence of these projects at different times. How would the aggregate amount of investment observed over any given time interval change in response to an increase in the real interest rate r?
(g) Compare your answer to the last part with your answer to part (a). Account for any differences in the response of investment to real interest rates.
Explain how an understanding of the innovation funnel might influence a companys view of research and development?
Does the presence of online auction sites, such as eBay, make it easier or harder for traditional retailers and wholesalers to engage in profitable price discrimination? Explain.
If a black market developed as a result of the $125 a week rent ceiling, what range of rents would be offered for a room? Would the allocation of housing be efficient? Would it be fair? Explain.
Suppose the production function is Q = min{3K, L}. How much output is produced when 6 units of labor and 3 units of capital are employed?
Analyze the method by which a firm can allocate the given advertising budget between different media of advertisement.
when the price of corn was low consumers in the united states spent a total of 3 billion annually on its consumption.
Based on what we watched on the last day of class, please write a one page that summarizes the primary causes of the 2007-2009 financial crisis?
Assume this farmer pays each farm worker $800 over the growing season and spends $3,000 for seed and fertilizer. If the price of corn in the spot market is $4.20 a bushel, what is the farmer's profit (assume no fixed cost)?
Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and justify your answer.
The Marginal product of labor in production process is statistically estimated as MPL=10(K/L)^0.5 Currently the process is using 100 units of K and 121 units of L
in 2001 the government of argentina faced large expenditures and tax revenues were low due to a recession so argentina
Describe the set of bundles that Mr. Creosote can afford. Draw a few indifference curves and the budget line. How many muffins of each type will he buy?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd