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

N345, An HIV educator wishes to determine whether the method of delivering ...

An HIV educator wishes to determine whether the method of delivering teaching influences adherence with antiretroviral therapy. She decides to measure adherence as viral load (a r

Method of analysis used by the firm, 1. (i) Complaints were made about the ...

1. (i) Complaints were made about the level of pollutants in the discharge from a certain factory.  The factory refuted the complaints by showing the results of their own analysis

Definition of Capital Market, Definition of capital market is termed as a m...

Definition of capital market is termed as a market where shares are traded after an initial issue. Capital market is the market where corporations, companies, and government debt

Process costing - accounting for scrap.., a company has two processes whose...

a company has two processes whose details are as follows: Materials 3000kg @ k0.30/kg, labour K120 for process 1 and material 2000kg @ k0.40/kg and labour k84 for process 2. actual

Quantitative techniques, How can we apply matrix algebra in various decisio...

How can we apply matrix algebra in various decision models in business and management?

Average, characteristics of a Good Average

characteristics of a Good Average

Accrue definition in accounts, To history income and expenditures/expenses ...

To history income and expenditures/expenses when they connect with the identification requirements of the finance form engaged regardless of when the money action happens.

#test, The AM of 10 numbers are 20 and 30 numbers are 60 then find AM of co...

The AM of 10 numbers are 20 and 30 numbers are 60 then find AM of combined data

Discrete random varible, A probability distribution is partially given in t...

A probability distribution is partially given in the following table with the additional information that the even values of X are equally likely. Determine the missing entries in

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