Consider the following model of a very simple economy. Household saving and investment behavior depend in part on wealth (accumulated savings and inheritance). In the late 1990s many were concerned with very large increases in stock values (a form of wealth) and its possible effect on saving and investment. The following consumption function incorporates wealth (W) as a determinant of consumption. We have the following information on consumption (C) and investment (I): bullet C = 45 + 0.75Y + 0.10W bullet I = 150 bullet W = 1 comma 000 We are ignoring the fact that saving adds to the stock of wealth. Calculate the values of equilibrium Y, C, and saving (S). (Enter your responses as integers.) Y = $ nothing C = $ nothing S = $ nothing Suppose that wealth increases by 40 percent. Calculate the values of equilibrium Y, C, and S. (Enter your responses as integers.) New Y = $ nothing New C = $ nothing New S = $ nothing As a result of the wealth accumulation, GDP ▼ remains unchanged decreases increases .

The sticky-price theory asserts that the output prices of some goods and services adjust slowly to changes in the price level. suppose firms announce the prices for their products in advance, based on an expected price level of 100 for the coming year. many of the firms sell their goods through catalogs and face high costs of reprinting if they change prices. the actual price level turns out to be 110. faced with high menu costs, the firms that rely on catalog sales choose not to adjust their prices. sales from catalogs will

Consider each of the following cases: case accounting break-even unit price unit variable cost fixed costs depreciation 1 127,400 $ 38 $ 25 $ 711,000 ? 2 124,000 ? 41 2,500,000 $ 900,000 3 5,753 117 ? 171,000 100,000 required: (a) find the depreciation for case 1. (do not round your intermediate calculations.) (b) find the unit price for case 2. (do not round your intermediate calculations.) (c) find the unit variable cost for case 3. (do not round your intermediate calculations.)

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above