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

INTRODUCTION TO STASTICS, Let a and b be constants and le yi=axi+b for i=1,...

Let a and b be constants and le yi=axi+b for i=1,2,...n. W HAT IS THE RELATION SHIP BETWEEN mean and variancees of X and Y ?

Compute the sample correlation matrix, 1 Compute SX; SXY ; and SY . > # Put...

1 Compute SX; SXY ; and SY . > # Put your R code here. 2 Compute the sample correlation matrix (q_p) between the X and Y variables. Test individual correlations for significance

Construct confidence interval for the true mean return, A researcher has ga...

A researcher has gathered data on the daily returns on a portfolio of call options over a recent 250-day period. The mean daily return has been 0.001 and the sample standard deviat

Determine the approximate vertical reactions, 1. Use the portal method to d...

1. Use the portal method to determine the approximate vertical reactions. Circles represent pinned connections. 2. A steel 2" x 3" rectangular bar is 9' long (E = 29,000ksi

Audit of plant, How to audit good?

How to audit good?

Accrual basis in accounting , The foundation sales whereby income are ackno...

The foundation sales whereby income are acknowledged when gained and considerable regardless of when collected; and costs are noted on a corresponding basis when suffered. All amaz

Calculate the probability of bmi, A file on DocDepot in the assignments fol...

A file on DocDepot in the assignments folder on doc-depot called bmi.mtp contains data on the Body Mass Index (BMI) of a population of Ottawa residents. The first column identifies

Estimate of the population mean time, The average cost per night of a hotel...

The average cost per night of a hotel room in New York City is $273 (SmartMoney, March 2009). Assume this estimate is based on a sample of 45 hotels and that the sample standard

Classification of cost., what i6 the relevance of cost classification?

what i6 the relevance of cost classification?

Determine the level of consumption, Suppose an individual has a lifetime ea...

Suppose an individual has a lifetime earnings profile and expects to live for 4 Periods: Earnings in Period 1: $30 Earnings in Period 2: $60

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages