Jerry wishes to retire in 5 years with $1 million in his bank account
If the account pays 4% and his current balance is $500,000, how much must he deposit at the beginning of each of the next five years for his wish to come true? The amount must be the same each year.
His current accumulation will grow to $608,326.45, leaving him $391,673.55 short. To get this, he will save X at the beginning of each of the next five years so that $391,673.55 = X[(1.04 ) + (1.04 )2 + (1.04 )3 + (1.04 )4 + (1.04 )5] = X[5.63292]. X = $69,532.95.
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Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
a. The benefits are usually easier to measure than the costs. b. Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. c. Estimating the value of a human life is difficult but necessary to evaluate the proposal. d. Both a and b are correct.
Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?
a. 0.9 million b. 14.1 million c. 15 million d. 23.5 million
Which of the following scenarios is consistent with typical estimates of the sacrifice ratio?
a. Inflation is reduced from 4 percent to 1 percent, and annual output falls by 10 percent. b. Inflation is reduced from 6 percent to 4 percent, and annual output falls by 10 percent. c. Inflation is reduced from 8 percent to 5 percent, and annual output falls by 9 percent. d. Inflation is reduced from 3 percent to 2 percent, and annual output falls by 3 percent.
In a large open economy ________
A) the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy B) the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy C) the effect of shifts in saving and investment on the domestic real interest rate and the actual levels of saving and investment are in the same direction as in a closed economy D) all of the above E) none of the above