Calculate permanent income, Basic Statistics

Assignment Help:

Suppose that permanent income, YP(t) is calculated as the average of disposable income (YDt) over the past 5 years, that is:

YP(t) = 0.2(YDt + YDt-1 + YDt-2 + YDt-3 YDt-4)

Suppose further that consumption is given as

C = 0.9 YP(t)

a.  If you earned $20,000 per year for the past 10 years, what is your permanent income?

b.  Suppose that next year, (t + 1), you earn $30,000.  What is you new permanent income?

c.  What is your consumption this year and next year (i.e., Ct and Ct + 1)?

d.  What is your short-run (1-year) and long-run MPC?

 


Related Discussions:- Calculate permanent income

Correlation matrix, A. Complete the correlation matrix table. B. Which vari...

A. Complete the correlation matrix table. B. Which variable (s) has the highest correlation coeffieient which is not a perfect correlation? C. Which variable (s) has the lowest cor

Cost of preference sharea, A company wishes to issue new preference shares;...

A company wishes to issue new preference shares; the company will incur flotation cost of 2% per share. the market value of this shares is $90 per share & a nominal value of $100 p

Profit margin (return on sales), Hugh Snore Bedding, Inc. has assets of $40...

Hugh Snore Bedding, Inc. has assets of $400,000 and turns over its assets 1.5 times per year. Return on assets is 12%. What is its profit margin (return on sales)?

Statistics is the backbone of decision-making, 1. (a) 'Statistics is the ba...

1. (a) 'Statistics is the backbone of decision-making'. Describe.     (b) 'Statistics is as good as the user'. Describe. 2.  Differentiate between the following with example.

QUANTITATIVE METHODS., A LARGE SHIPPPING COMPANY RECORDED THE NUMBERS OF TO...

A LARGE SHIPPPING COMPANY RECORDED THE NUMBERS OF TONS SHIPPED WEEKLY ACROSS THE PACIFIC FOR 50 WEEKS. ARRANGE DATA IN A LESS THAN CUMULATIVE DISTRIBUTION USING SEVEN CLASSES OF E

Probability, Consider the two events A and B with P(A) = 0.4 and P(B) = 0.3...

Consider the two events A and B with P(A) = 0.4 and P(B) = 0.3. (a) If A and B are independent then compute the probability that Both A and B happen

Example of inference, Q. Example of inference? Ans. Thirty student...

Q. Example of inference? Ans. Thirty students from a college were surveyed and classified according to two variables: (1) gender (M/F) and (2) major (liberal arts, busines

Nucleus Composition, The study of radioactive disintegrations indicates the...

The study of radioactive disintegrations indicates the emission of alpha, beta and gamma particles/rays to be of nuclear origin. Further, study of artificial radioactivity has reve

STATISTICS FOR MANAGEMENT, 1. Mention the characteristics of Statistics. Ex...

1. Mention the characteristics of Statistics. Explain any two applications of Statistics. 2. Distinguish between primary and secondary data. What are the methods of collecting prim

BALANCE SHEET , BALANCE SHEET A financial report that shows the resources,...

BALANCE SHEET A financial report that shows the resources, obligations, and stock of a business at a specified time frame in complying with usually recognized sales concepts (GAAP

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd