2. Identify each of the following statements as “true” or“false”. Explain your response. Macroeconomists today agree: a. that laws requiring a balanced budget can do more harm thangood. b. that fiscal policy is just as effective as monetarypolicy. c. that the economy can be slow to self-correct. d. that a liquidity trap can render monetary policyineffective. . . .

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Macro-Economic Indicators: GDP, CPI, Unemployment, Interest Rates

Instructions:
There are probably a thousand macro economic indicators, some measure the overall national economy, some are more limited in scope. The three most often quoted and publicized are the Gross Domestic Production Index (GDP), the Consumer Price Inflation Index (CPI) and the Unemployment Index. Below I will give you the link(s) for each one of the indicators followed by two or more questions you are to answer. The links show you the respective formulas and examples of the way the indicator is calculated. In all there will be three indicators with five total links.
GDP links:
• http://mindtools.net/GlobCourse/formula.shtml
• http://www.cliffsnotes.com/study_guide/GDP.topicArticleId-9789,articleId-9733.html
Questions:
1. Assume that consumer spending is $1,000, government expenditures are $250, investments by industry are $200, and the excess of exports over imports is $300. Compute the GDP. (please show your work)
2. If we are able to increase our domestic energy production, and that allows us to import less oil from foreign countries, briefly explain what will happen to the GDP.
Inflation links:
• http://inflationdata.com/inflation/inflation_articles/calculateinflation.asp
• http://www.investopedia.com/terms/i/inflation.asp#axzz1lAEXt7uC
Questions:
1. If the CPI went from 106 to 111 during the past year, the rate of inflation, in percent, was? (please show your work)
2. If the CPI went from 217 to 234 over the past year, the rate of inflation was? (please show your work)
Unemployment rate link:
• http://www.cliffsnotes.com/study_guide/Unemployment-Rate.topicArticleId-9789,articleId-9735.html
Questions:
1. Assume the total civilian labor force is 30,000 people and the number of unemployed is 2,500 people. Compute the unemployment rate, in percent. (please show your work)
2. As with the above problem, assume the total civilian labor force is 30,000 people, but, 500 of the unemployed have now given up and have stopped looking for work. Compute the unemployment rate, in percent. (please show your work)
Yield Curve Links:
The link below takes you to a site that shows you various Treasure security yields and how short and long-term yields differ. This is called the term structure of interest rates and when graphed it is called a yield curve. Access this link and the PowerPoint link below it and then answer the questions that follow.
• http://www.treasury.gov/resource-center/data-chart-center/Pages/index.aspx
For Yield Curve Powerpoint click HERE
Questions:
1. Assume interest rates on Treasury bonds, with the indicated time to maturities as follows:
15 years = 7.72%
20 years = 8.72%
25 years = 9.64%
30 years = 10.18%
The differences in rates among these bonds is caused by: (please briefly explain your choice)
a. Tax effects
b. Maturity risk premiums
c. Default risk premiums
d. A down sloping yield curve
e. Liquidity risk premiums
2. Which statement is False? (please briefly explain your choice)
a. The market risk premium is added to all bonds, even U.S. Government ones.
b. The liquidity premium requires that an asset can be sold both quickly and for fair market value.
c. The inflation premium is added on to the required return to protect the purchasing power of an investors earnings.
d. The default risk premium is applied to all bonds including U.S. Government ones.
3. Over the next 3 years inflation is expected to be: Year one 2.5%, year two 4.5%, year three 5.0%. What should investors require for an inflation premium on a Treasury bond with a three-year maturity? (please show your work)
4 If the rate of inflation is expected to be 0% for the next 4 years will the yield curve have an upward slope? (please briefly explain your answer)
Examine the most recent issue of International Economic Trends, published by the Federal Reserve Bank of St. Louis. The figures you see in the graphs are percent changes compared to the year before, in economic data for seven countries and the Euro Area. Your assignment is to compare indicators for the United States, Japan, Canada, and the United Kingdom.
International Economic Trends is found at this site:
• http://research.stlouisfed
You must use this site for your base information but you are welcome to use one or more other sites to help you in your analysis.
When you click on the link above you come to a summary screen with several economic indicators for several different countries. Scroll down and you will see a cross country comparison that you can access, and this is best for the multiple country comparisons you will be doing. When using the cross country comparison first make sure you choose the graph that compares the US, Japan, Canada, and the United Kingdom, because other comparisons will also be shown. Second, make sure you choose the correct chart because several will be displayed for each economic classification. You will need to access:
Output and growth (GDP), and this will be the first graph on your screen.
Inflation and prices (CPI), and this will be the second graph on your screen.
Labor markets (employment), and this will be the third graph as you scroll down.
For each of the three comparisons below you need to utilize the latest available information shown in the graphs. It is extremely important that this most recent data be included.
1. Compare the four countries in terms of Output and Growth (Real GDP). The analysis should only cover the period from the beginning of 2008 to the present.
2. Compare the four countries with respect to Inflation and Prices (CPI). The analysis should only cover the period from the beginning of 2008 to the present.
3. Compare the four countries regarding the Labor Market (Unemployment Rate). The analysis should only cover the period from the beginning of 2008 to the present.
4. Provide a conclusion, with supporting justification, as to which country has had the best overall economc recovery since 2008.
Optional readings
The following shows you the yields on all the maturities issued by the Treasury in the form of a table. You can also see a graph of the current yields, the yield curve, by clicking on the Data and Charts Center located on the left column of the page. Be patient, it is slow to load.
• http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
The following gives you a hypothetical yield curve (not based on current data) but the value is in the explanations that are below the curve.
• http://www.investopedia.com/terms/y/yieldcurve.asp#axzz1VCSWJAY8
Case assignment expectations:
Use information from the modular background readings as well as any good quality resource you can find. Make sure you cite all resources you use and provide a reference list at the end of your paper.
LENGTH: 4 typed and double-spaced pages.
In addition to the overall quality, depth, grammar, and organization of the paper, the following will, in particular, be assessed:
1. Your ability to present comparative economic data in a clear and precise manner.
2. Your ability to analyze comparative economic performance to arrive at conclusions consistent with the facts..
3. Some in-text references to modular background readings (APA formatting not required).

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Question 1: Prepare an income tax return form for the following taxpayer

– Personal details: David Lucas: 13 Marina Street, Sydney NSW 2017.Date of birth: 12 February 1971.Occupation: Accountant; TFN-124 765 230.

– Salary: $55 630 PAYG tax paid $ 10 560; Allowances $230; Reportable fringe benefits$4000.Employer's ABN: 22 222 222 222.

– Unit trust distribution was 2264, which had franking credit of $ 113. There was also a gross capital gain of $260 that was fully discountable.

– David earned a $47 interest from an overseas bank account but he only received $40 after they subtracted a foreign tax credit of $7.

– Other income: bank interest $84; fully franked dividends $240; unfranked dividends $50.

– He received refunds of $450 from Medicare and his health insurer (Code BUPA) over the year. His membership number is 426780 and he had no children.

– David owns an investment property that earned $13 240 rent. The expenses were: interest $10700, agent commission $910, repairs $128, rates $930 and advertising $45. When he bought it three years ago, the building itself cost $ 212 000 and at the end of last year the appliances had a WDV of $ 1285 in the low value pool.

– During the year David drove his 2.5 -litre car 85 km on work- related travel. He also spent $320 on union fees, $42 on laundering his grey trousers, $400 on Internet access (half of which related to his work), $45 on a text book, $80 on donations to the Red Cross and $2380 on hospital/doctors' bills. Private health insurance cost $1230 and he did not receive any upfront Government contribution for his health insurance premium.

Required:

1.         Prepare income tax return for Mr. David Lucas and advise him about his income tax liabilities or refund (if any).

2.         Use all appropriate forms and worksheets to complete your return. If you are not certain about what forms to use, please discuss with your class teacher.

3.         Use current tax rates available in the e-learning.

Please note that to be able to get competent you need to show all relevant calculations, correctly fill out the necessary forms and worksheets, use correct tax rates and advise the client about this tax liability/refunds.

Question 2

Leila Karim is a doctor who made the following payments during the year:

Doctor union fee                                                            450

Laundering of compulsory uniform                                      90

Jacket when working night shifts                                                       85

Stethoscope                                                                 120

Text book -Diabetes management                                     70

Text book -Law for doctors                                             65

Taxi fares when called in at short notice                                             70

Plain watch                                                                  60

Phone calls to check shifts                                              8

Shoes                                                                          85

Scissors to cut surgical gauze                                          15

a)         Advise which of these are deductible for tax purpose and cite relevant legislation.

b)         If according to your opinion,  any of the expenses are not deductible, briefly mention the reasons to the client.

c)         Explain the substantial requirements that she will need to satisfy.

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

An inductor of L henries varies with time t (in seconds)according to L = 0.05+0.001t , 0 <=t <=1000 . It is connectedin series with a 40 volt EMF and a 10 ohm resistor. If I = 0 at t =0 , find: a) I(t), t > 0 ; and b) the theoretically maximumcurrent. . . .

 

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"