You start working at age 20 and you plan to deposit $5,000 in a savings account every year for the next 45 years. a. At the end of this time, how much money will you have if the interest rate is 5%? b. You decide that's not enough money
How much will you have to save every year if you wish to have $1,000,000 when you retire?
a. FV = 5,000 {((1 + i)n - 1)/ i } = $798,500
b. You will have to save $6,261 per year.
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The welfare impact of a preferential trade agreement depends on the difference between the amount of new trade that takes place because of the agreement and the change in international trade patterns that arises because of it
Indicate whether the statement is true or false
Suppose there are only two people, Mr. Mullinax and Ms. Fleming, who must split a fixed income of $500. For Mr. Mullinax, the marginal utility of income is MU m = 600 - 2I m , while for Ms. Fleming, marginal utility is MU f = 600 - 3I f , where I m and I f are the amounts of income to Mr. Mullinax and Ms. Fleming, respectively.
(A) What is the optimal distribution of income if the social welfare function is additive? (B) What is the optimal distribution if society values only the utility of Ms. Fleming? What if the reverse is true? Comment on your answer. (C) Finally, comment on how your answers change if the marginal utility of income for both Mr. Mullinax and Ms. Fleming is constant such that Mu m = 250 = MU f . (This one is subtle.) The setup should be I m + I f = 500 and 600 - 3I f = 600 - 2I m
Which of the following is most likely to reduce the consumption of an exhaustible natural resource?
A. A decrease in monopoly control of the market for the resource B. Government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource C. Implementation of a price ceiling for the resource below its equilibrium price D. Government macroeconomic policies that lower the interest rate on bonds
The Federal Reserve Act explicitly requires that the Board of Governors represents each of the following, except:
A. financial interests. B. agricultural interests. C. foreign interests. D. commercial interests.