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

Volume, I have a box that measures 3m x 3m x 3m. What is the volume of the...

I have a box that measures 3m x 3m x 3m. What is the volume of the cube?

Draw concerning the effectiveness of the medications, A testing organizatio...

A testing organization is evaluating the effectiveness of sinus relief tablets, Relief and SineOut.  As part of the analysis the organization collects 44 sinus sufferers and random

Costing for labour, ways or techniques for labour control policy

ways or techniques for labour control policy

Jurnal entry, Depreciation on the company''s equipment for 2011 is computed...

Depreciation on the company''s equipment for 2011 is computed to be $16,000.

Standard deviation, Standard Deviation: The standard deviation is a gauge o...

Standard Deviation: The standard deviation is a gauge of the variance, or dispersion, of the market return over its average returns. Thus Standard Deviation gives an insight of tot

Index, Example and formula of Quantity Index

Example and formula of Quantity Index

Measures of dispersion (variation), Measures of Dispersion (Variation) ...

Measures of Dispersion (Variation) A measure of dispersion is to measure the spread among values of observations in a data set. There are three commonly used measures of disper

one-way anova and hypothesis , Suppose we wanted to compare the somatic co...

Suppose we wanted to compare the somatic complaints (as measured on a scale known as the Physical Symptom Survey or PSS) of three groups of people; nonsmokers, smokers, and people

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