...the question paper. Insert the question paper inside the booklet. Non-programmable calculators are allowed. Dictionaries are not allowed. 1 1. [17 points] Consider a closed economy. Suppose that there is an increase in business confidence. a. Using the IS-LM framework and AD-AS model show graphically the impact of the above event on output, interest rates, unemployment rate, and price level in the short run. Assume that the economy starts at the natural level of output. Please label the initial equilibrium with the letter A, and the short run equilibrium with the letter B. b. If the Bank of Canada wants to restore full-employment output, will the Bank of Canada increase or decrease the nominal money supply? Using the IS-LM framework and AD-AS model show graphically the impact of the Bank of Canada’s immediate intervention to restore full-employment on output, interest rates, unemployment rate, and price level in the short run. Please label the equilibrium with the letter C. c. Now suppose that the Bank of Canada decides not to intervene. However, the Ministry of Finance wants to restore full-employment output. Will the Ministry of Finance increase or decrease government spending? Using the IS-LM framework and AD-AS model show graphically the impact of the Ministry of Finance’s immediate intervention to restore full-employment on equilibrium output, interest rates, unemployment rate, and price level in the...
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...of output • The U.S. economy in the 1980s and 1990s • Anticipatory monetary policy • The policy mix during the German re-unification Changes from the Previous Edition: The material in this chapter has been updated, but its format is essentially the same. More emphasis is given to the economic expansion in the U.S. in the 1990s. Introduction to the Material: Chapter 11 uses the IS-LM model derived in Chapter 10 to show how monetary and fiscal policies can be used to dampen economic disturbances. The economic effects of various policy mixes are highlighted in discussions of actual events: the recession and recovery in the United States in the 1980s, the U.S. recession in 1990-91, the long economic expansion thereafter, and the policies enacted by Germany during the re-unification process in 1990-92. First, the Fed's conduct of monetary policy is discussed, with an explanation of how open market operations can be used to change nominal money supply. The effectiveness of monetary policy in changing the amount of output demanded depends on the steepness of the LM-curve. The transmission mechanism, that is, the process by which monetary policy changes affect the economy, occurs in several steps. First, a change in money supply leads portfolio holders to make adjustments in their asset holdings. As a result, asset prices and interest rates change. The change in interest rates subsequently affects intended spending and thus national income. Table 11-1 provides a...
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...Questions to Lecture 7 – IS-LM model and Aggregate demand 1. Draw Keynesian cross as a comparison of planned and realized expenditures. What is the intercept of planned expenditure line? What is its slope? If government expenditures would be positive function of output, how would the Keynesian cross change? We will go over this on the review session – easier to explain than on paper. The intersect point represents the equilibrium output. Black line – planned expenditures Blue line – realized expenditures If government expenditures would be positive function of output the blue line would shift up. 2. What are the tools of fiscal policy? Fiscal policy has 3 tools: 1. Increase or decrease government expenditures 2. Cut or increase taxes 3. Increase or decrease transfer payments 3. Explain the mechanism of government expenditures multiplier – why is the effect on the output greater than initial increase in government expenditures? The government purchases multiplier is ∆Y/∆G Initially, the increase in G causes an equal increase in Y, so ∆Y=∆G, But with increasing Y will be increasing C(Y-T) →further ↑Y →further ↑C →further ↑Y So government purchases multiplier will be greater than 1, it is same principal like with Bank’s creation of money when lending out. 4. Explain the mechanism of tax...
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...change roughly in direct proportion to volume. Analyze the complexity of cost behaviors in health care organizations and describe how costs are classified according to their relationship with volume. When it comes to looking at cost behavior within the health care organization a great deal or majority of the cost goes towards hospital services such as building, equipment, salaried labor, and overhead, which are fixed over the short term (Roberts RR, Frutos PW, Ciavarella GG, Gussow LM, Mensah EK, Kampe LM, Straus HE, Joseph G, Rydman RJ., 1999). Hospital organization fixed costs includes but not limited to capital expenditures, employee salaries and benefits, building maintenance, and utilities (Roberts RR, Frutos PW, Ciavarella GG, Gussow LM, Mensah EK, Kampe LM, Straus HE, Joseph G, Rydman RJ, 1999). The variable costs include health care worker supplies, patient care supplies, diagnostic and therapeutic supplies and medications (Roberts RR, Frutos PW, Ciavarella GG, Gussow LM, Mensah EK, Kampe LM, Straus HE, Joseph G, Rydman RJ, 1999). The difference between the fixed cost and the variable cost for an health care organization in reference to volume; the fixed costs are not saved over a certain period of time if the facility reduces services. While variable costs on the other hand are saved if the health care...
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...viewed the exchange rate as the relative price of commodities traded internationally. However, because of the advent of the development of national accounts they started to treat the trade balance as a component of the national account, not only domestic account. They applied the Keynes’s writings to explain the balance of payment, which became an integral part of the theory that explains the dynamics of adjustments in the stock of money and overall trade balance. This approach uses IS-LM-BP framework to explain the changes that will occur in an economy as an effect of using monetary or fiscal policy, and how those changes will differ when the country operates under different capital mobilities and under floating or fixed exchange rates. One of the three components of this model, the IS curve, shows all of the possible combinations of income and the interest rates in the goods market. The LM curve relates to the interest rates and output on the money market. The BP curve is a line drawn on an IS-LM curve, which shows the different combinations of real income and interest rates at which the balance of payments is in equilibrium. The slope of the BP line indicates the degree of capital mobility in a country in a way that- the flatter the BP curve, the greater the capital mobility. The aim of this essay is to use this model in order to...
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...FNCE90013 Case Studies in Finance SUBJECT GUIDE July – August, 2015 Prepared by George Kester Department of Finance Faculty of Business and Economics Objective To develop an understanding of applied corporate finance including financial analysis and forecasting, financing sales growth, short-term versus long-term financing, capital structure policy, capital investment analysis, cost of capital, and company valuation. The course will be experiential and focus upon selected Harvard Business School cases describing actual business situations faced by financial managers, requiring analysis, and decision-making. Professor Professor George W. Kester Texts Robert C. Higgins, Analysis for Financial Management (10th Editon), McGraw-Hill Irwin, 2012. Cases You should read and analyze each assigned case. The cases are available on the LMS page for FNCE90013. Readings Selected readings will be distributed during the course. Group Study It is recommended that you form yourselves into small study groups for the purpose of routinely reviewing and discussing assigned before each class. Your learning experience will be enhanced by such interaction and you will be better prepared for class. Presentations Copies of the PowerPoint slides of the presentations are available on the LMS page for FNCE90013. It is recommended that you print them out prior to each class. Attendance The class attendance will be taken. Participation ...
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...Preface 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Introduction Overview The Scheme Concept Objectives of Lean Manufacturing Scheme Develoment Commissioner (MSME) Implementation Structure Financial Assistance Coverage and Eligibility Implementation Framework Implementation Time Line Approval Process Modalities of Fund Transfer Format for Application by MCs/SPV – Annexure - 1 Power of Attorney – Annexure - 2 7 7 7 9 9 9 10 10 10 14 14 14 16 18 Page No. 5 National Manufacturing Competitiveness Programme ABBREVIATIONS CMTI CPs DC (MSME) DGFASLI GDP GOI IA IFW ILO LMC LMS MC MSME MSME - DI NMCC NMCP NMIU SPV SSC T&C TAC – – – – – – – – – – – – – – – – – – – – – Central Manufacturing Technology Institute Condition Precedents Development Commissioner (MSME) Director General Factory Advice Service & Labour Institutes Gross Domestic Product Government of India Implementing Agency Integrated Finance Wing International Labour Organization Lean Manufacturing Consultant Lean Manufacturing Scheme Mini-Cluster Micro, Small & Medium Enterprises MSME-Development Institute National Manufacturing Competitiveness Council National Manufacturing Competitiveness Programme National Monitoring and Implementing Unit Special Purpose...
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...Role of the Multiplier • The Position of the IS Curve • A Summary of the IS Curve • The Money Market and the LM Curve • The Demand for Money • The Supply of Money, Money Market Equilibrium and the LM Curve • The Slope of the LM Curve • Shifts in the LM Curve • A Summary of the LM Curve • Equilibrium in the Goods and Money Markets • Changes in the Equilibrium Income and Interest Rate: A First Look at Policy • Deriving the Aggregate Demand Curve • Working With Data Changes from the Previous Edition One of the major problems with this chapter in the previous editions is that the material was presented in a manner that made it sound like it would be difficult, which is not true. Therefore, the long introduction has been shortened, the confusing diagram (former Figure 12-2) has been removed, and the extra part concerning outline of the chapter has been removed. The derivation of the IS curve section has been rewritten at the beginning. Box 11-1 and Box 11-2 and 11-3 are new The LM curve section has been rewritten to make it more clear, and the relevant diagrams are now side by side, which makes much more sense. The last section of the chapter is rewritten to show the comparative statics of shifts in IS and LM; this serves as a good introduction to Chapter 12. Learning Objectives • Students should be aware that the IS-LM model discussed here is a simplified, short-run, static macro-model, in which prices are assumed to be fixed. ...
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...2010-2011 China fiscal policy analysis China ministry of finance undersecretary Wang Jun made a speech in the fourth international taxation dialogue system plenary session. He pointed out that, “from now on, China government will keep put into effect on positive fiscal policy and stable monetary policy, which are aimed at improving the pertinences, flexibility and foresight of fiscal policy.” (Wang, 2011) The policy and target Review back to 2010, China government insists in implementing positive fiscal policy, especially in stimulating the economic growth, transferring the way of economic growth and applying flexible in fiscal policy. As the figure 1 shows, in 2010, China positive fiscal policy facilitate in mainly four aspects: advancing the local fiscal reformation, strengthen the medium-sized and small enterprises and rural construction, promoting the economic development and supporting the social undertaking. Figure 1: Year 2010 China important fiscal policy content Coming out date | Fiscal policy | 4.30 | Treasury department sets fiscal policy: central budget provides specialized fund for helping to expand the minor firms ‘guarantee operations, which can improve the financing environment of minor firms. | 5.13 | Treasury department and SAT (State Administration of Taxation) make an announcement; government will solve the problem that farmers are hard to get loan, by diminishing the sales tax and income tax. | 5.31 | Government will start the trial allowance...
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...on many assumptions which may be unrealistic. But this is the best model that economists have. So use it carefully. In 1963 when he was young, Prof. Robert Mundell was working with Marcus Fleming at the IMF and wrote a paper which gave birth to this model. He has been at Columbia University (New York) in the last 25 years. He has been a strong advocate of stabilization of major currencies and establishment of euro. In 1999, he won the Nobel Prize in economics, partly because of the Mundell-Fleming model. The Mundell-Fleming model is an open macro application of the standard IS-LM analysis. More precisely, it is an IS-LM analysis with trade and international capital mobility. (If you do not know what the IS-LM model is, you have a problem. Please look at any intermediate macroeconomic textbook or ask your friend). Consider the following three aspects of the macroeconomy: (1) Aggregate demand (IS and LM curves, representing goods and money markets) (2) Aggregate supply (production function and labor market) (3)...
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...FINA 6282 Economics for Finance Practice Mock Examination Chinese University of Hong Kong Please write your name and student number (If you don't have a student number yet, please put your application number) on the booklet. Please answer all of the following questions. The full mark for exam is 100. Please present the definitions, theorems and steps of the proofs clearly. Please make sure that people can read your handwriting. You will have THREE hours for the exam. 1 Consider the following game between two firms, Sony and Toshiba. Toshiba Invest Heavily 0, 0 1, 3 Sony Invest Heavily Slacken Slacken 3, 1 2, 2 a) Find the pure-strategy Nash equilibrium or equilibria. b) Compute the mixed-strategy Nash equilibrium. As part of your answer, draw the best-response function diagram for the mixed strategies. c) Suppose the game is played sequentially, with Sony moving first. What are Toshiba's contingent strategies? Write down the normal and extensive forms for the sequential version of the game. d) Using the normal form for the sequential version of the game, solve for the Nash Equilibria. e) Identify the proper subgames in the extensive form for the sequential version of the game. Use backward induction to solve for the subgame-perfect equilibrium. Explain why other Nash equilibria of the sequential game are "unreasonable". (Nicholas and Synder Ch5, Q5.7) 2 Consider the following Bertrand competition model with differentiated products. Let the demand curves...
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...Strategic Plan Overview: American Management Association Jennifer Socorro Strategy Formulation and Implementation – MGT 578 Sharon Palmitier – Facilitator July 2, 2007 Overview The following strategic plan overview will focus on the American Management Association (AMA), where I am employed as an eMarketing Strategist. AMA “is a world leader in professional development and performance-based learning solutions” (AMA, About AMA, 2007). The bulk of our business is focused on corporate training via public seminars. As a member-based not-for-profit organization, we are devoted to helping the business community by ensuring that businesspeople are equipped with the skills necessary to thrive in today’s challenging and dynamic business environment. We offer over 170 seminars which can be attended at locations throughout the United States or delivered on-site at any organization. As was mentioned above, our customers are businesspeople interested in career development and organizations interested in developing their human resources in order to gain a competitive advantage and help them prosper within their industry. A company’s mission statement “answers the question “What business are we in?” (Pearce & Robinson, 2005, p. 37). Pearce and Robinson describe the following components as those to be included within an effective mission statement: customer market, product service, geographic domain, technology, concern for survival, philosophy, self-concept, and concern for...
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... Dancing Tiger, Inc. Asian Imports 952 Hausten Avenue Honolulu, Hawaii 94621 April 14, 2010 Charter Approval This document represents the approval and authority to begin the project and represents a consensus agreement from the participants about the goals, responsibilities, schedule, costs and product quality for the project. April 14, 2010 Bill Tsai | | Date | Vice President | | | Project Sponsor | | | April 14, 2010 Mary Allen Smith | | Date | LCMS Manager | | | Business Owner | | | April 14, 2010 Sydney Goode | | Date | LMS Administrator | | | Project Manager | | | April 14, 2010 Mary Endo | | Date | Director, Learning Technologies | | | Business Analyst | | | April 14, 2010 Chris Malloch | | Date | Information Technology Technical Lead | | | | | | Table of Contents Section Description Page Charter Approval 1 1.0 Project Charter 3 1.1 Project Name 3 1.2 Project Officers 3 1.3 Purpose of Document 3 1.4 Project Description 3 1.5 Background...
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...BUSINESS CYCLES Final Group Project Dossier ANALYSIS OF FRENCH ECONOMIC 2011-2012 THE OUTLOOK FOR REAL GDP GROWTH THE OUTLOOK FOR REAL GDP GROWTH GROUP MEMBERS CHEN KEHAN TEREZIA MRAZOVA WANG XINRUI WU JIE YANG ZIJIANG CONTENT CHAPTER I National and International Environment1 1.1The International Environment2 1.2 The Domestic Environment5 CHAPTER II The Real Economy7 2.1 Contributions to Real GDP Growth7 2.2 Unemployment Rates and Capacity Utilization8 2.3 Percent Growth In wages, in Prices, Level of Interest Rates8 2.4 Investment10 2.5 Consumption16 CHAPTER III The Foreign Trade(Imports, Exports)22 CHAPTER IV Government’s Fiscal and Monetary Policies23 CHAPTER V Summary of Macroeconomics Analysis France27 CHAPTER 1 International and National Context 1.1 International Environment Table 1.1.1 The International Environment | | average | 2010 | 2011 | 2012(BNP) | 2012(MF) | Real GDP | USA(GOV) | | 3.0 | 1.6 | 0.9 | 2.0 | | JAPAN | | 4.0 | -0.7 | 1.3 | | | EUROZONE(GOV) | | 1.8 | 1.6 | 0.7 | 1.4 | | ASIA(BNP) | | 9.2 | 7.7 | 7.6(CA) | | WORLD | | | 5.1 | 3.8 | 3.4 | | Price of crude oil (Brent) | 112.5 (8, Nov. 2011) | | 80 | 111 | 109 | 110 | Exchange Rate(USD/EUR) | 1.38 (8, Nov. 2011) | | 1.33 | 1.40 | 1.38 | 1.43 | Special Factors | 1 Japanese earthquake2 Sovereign debt crisis in Europe | Analysis of International Economic Environment a) World demand Table 1.1.2 GDP, Real Percent Change of Previous Year ...
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...YEAR 2 ------------------------------------------------- INDIVIDUAL ASSIGNMENT (Question) ------------------------------------------------- Learning outcomes: 1. Identify and evaluate the corporate goals of an organization especially in the context of financial management. 2. Describe and critically reflect upon the key issues involved in the effective management of organizations finances. 3. Apply theoretical concepts and frameworks to a range of practical situations in order to propose solutions to business problems. This assignment consists of THREE (3) parts. The purpose of this assignment is to help the students to understand how an organization demonstrates key areas of financial management in practice. The students will also learn to identify the corporate goals that are important to an organization and therefore, be the main objective of financial managers. Besides, students will also be familiarizing with the financial market especially capital market. Students will have a better understanding on importance of efficient market hypothesis to financial management and ability to explain the difference between the various forms of market efficiency. Lastly, students will identify and distinguish the differences between security valuation and capital budgeting together with the importance of capital budgeting to an organization. Project Outline: Part 1 * Each student is required to choose 2 listed companies that operate in different sectors...
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