Calculate permanent income, Basic Statistics

Assignment Help:

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

YP_(t)= 0.2(YD_t + YD_t-1 + YD_t-2+ YD_t-3YD_t-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., C_t and C_{t + 1})?

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

Related Discussions:- Calculate permanent income

Sampling survey ., List all possible simple random samples of size n = 2 th...

List all possible simple random samples of size n = 2 that can be selected from the population {0, 1, 2, 3, 4}. Calculate 2 s for the population and Var y( ) for the sample.

Degree of tastiness, A researcher is interested in comparing tastiness of d...

A researcher is interested in comparing tastiness of different parts of cheese in grilled cheese sandwiches. The researcher expects that Cheddar cheese grilled sandwiches are rate

Expansion 0f solid, state the advantage of expansion of solid

state the advantage of expansion of solid

Find the value, Find the value of E (i+). Show your calculation. i=7 i=3

Find the value of E (i+). Show your calculation. i=7 i=3

Bond calculation, Calculate the original price of the bond. Bonds were issu...

Calculate the original price of the bond. Bonds were issued at $200,000 of x% ten-year term bond at an effective annual interest rate (market rate) of x%. The bonds pay interest se

Allowable moving costs , Allowable moving costs Except as mentioned in Sub...

Allowable moving costs Except as mentioned in Subsection 60.20.20 and within certain restrictions, allowable moving costs involve the prices associated with moving family products

Cost accounting, 1. ABC produces a single product. Material A is added at t...

1. ABC produces a single product. Material A is added at the start of production and Material B at the end. Conversion is uniform throughout. Inspection before Material B is added.

Determine the local luminance, 1. Consider a room 3 m x 3m x 3m with one fa...

1. Consider a room 3 m x 3m x 3m with one façade made of glazing with diffuse transmittance 0.6 and reflectance 0.2. The interior surfaces have a reflectance of 0.5. Consider incid

Absorption distributions , Absorption distributions Probability distribu...

Absorption distributions Probability distributions which represent the number of 'individuals' (such as particles) which fail to cross the speci?ed area containing the hazards o

Introduction to statistics, characteristics of statistics

characteristics of statistics

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages