3. Answer the following questions:(a) Given the marginal propensity to import M'(Y) = 0.1 and the information that M = 20when Y = 0, find the import function M(Y).(b) Given a continuous income stream at the constant rate of $1,000 per year, what will be thepresent value II if the income stream terminates after exactly 3 years and the discount rate is 0.04?(c) What is the present value of a perpetual cash flow of $2,460 per year, discounted at r = 8%?

Step 1:(a) Given:Marginal Propensity to Import M′(Y)=0.1M=20 when Y=0We are to find the import…

Answered: 3. Answer the following questions: (a)…

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter6: Exponential And Logarithmic Functions

Section: Chapter Questions

Problem 8RE: Suppose an investment account is opened with aninitial deposit of 10,500 earning 6.25...

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4. Two investments, A and B, produce a continuous income stream of 3%, compounded continuously. The rate of flow of income from investment A is f(t) = 2000e0.03t and the rate of flow of income from investment B is expected to be g(t) = 3000. (a) Find the total income produced by each of the two investments over the 5-year period. (b) Find the future value, the accumulated amount of money flow, of each of the two investments for 5 years. (c) Compute the interest earned by each investment over the 5-year period. (d) Find the present value of each of the two investments. (e) Interpret the answers determined in (a) to (d)
Suppose that the real money demand function is L(Yr+ ? ?=0.3Yr+c) Where Y is real output, r is the real interest rate, and πe is the expected rate of inflation. Real output is constant over time at Y = 1500. The real interest rate is fixed in the goods market at r = 0.5 per year. (a) Suppose that the nominal money supply is growing at the rate of 10% per year and that this growth rate is expected to persist for ever. Currently, the nominal money supply is M = 400. What are the values of the real money supply and the current price level? (Hint: What is the value of the expected inflation rate that enters the money demand function?)
A standard "money demand" function used by macroeconomists has the form In(m) = Bo + B, In(GDP) + B2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per year. Supposed that B, = 2.15 and B, = -0.06. %3D What is the expected change in m if GDP increases by 3%? The value of m is expected to V by approximately%. (Round your response to the nearest integer) What is the expected change in m if the interest rate increases from 1% to 9%? The value of m is expected to ▼ by approximately %. (Round your response to the nearest integer)
Suppose that a business provides a continuous income stream with an annual rate of flow at time t given by f(t) = 120e0.05t in thousands of dollars per year. If the interest rate is 10% compounded continuously, find the capital value of the business.
Find the total income produced by the continuous income stream with rate of flow f(t)-2000x in the first 5 years, wheret is time in years. This is a numerical answer problem, so just type in the numeric answer. The result is a whole number and do not round your answer.
8. Given the rate of net investment I(t) = 9t¹/2, find the level of capital formation in (i) 16 years and (ii) between the 4th and the 8th years.
A company estimates that the cost of new capacity additions follows the function f(y) = 0.0358y0.66, where y is the number of units and f(y) in millions of dollars. Demand is increasing at a rate of 3,500 units per year. The company uses a 10% per year interest rate. What is the present value of the cost of the next nine capacity additions?
A sports company has the following production function for a certain product, where p is the number of units produced with x units of labor and y units of capital. Complete parts (a) through (d) below. 1 1 2 2 p(x,y) = 2600xy (a) Find the number of units produced with 31 units of labor and 1417 units of capital. p= units (Round to the nearest whole number.) (b) Find the marginal productivities. dp dx Px = др ay = Py (c) Evaluate the marginal productivities at x = 31 and y = 1417. P(31,1417) =(Round to the nearest whole number as needed.) Py(31,1417) = (Round to the nearest whole number as needed.)
At the beginning of year 1, a new machine must be purchased at the cost of 130K TL. The cost of maintaining a machine i years old is given in the table below. Due to the inflation, the purchase cost of a new machine at the beginning of Year 2, Year 3, and Year 4 would be 140K, 150K, and 165K respectively. The trade-in value is fixed at 50K for a replaced machine regardless of the age. Your goal is to minimize the total cost (purchasing plus maintenance) of having the machine for four years. Determine the year(s) in which a new machine should be purchased and calculate the total cost. Age at the beginning of the year Maintenance cost for the next year(K TL) 20 1 35 2 65 120
Using the attached Answer provided by a Bartleby Expert, Please Answer the Following: 2. A small oil company considers the continuous pumping of oil from a well as a continuous income stream, f (t) = 600e-0.2t in thousands of dollars per year. Suppose that the oil company is planning to sell the well. The company establish its selling price using the present value' of this well over the next 10 years. b. If the income can be invested at 10% compounded continuously, what is the estimated selling price of this well? Zoom level. Click to

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