1. Policy Topic: The country needs investment? Why? How do we pay for it? What will it do for us?

Personal savings is low in the United States. The government runs a budget deficit, and there are also large transfer payment programs in the U.S. Is this connected to, or does this affect any of the following: (a) business investment spending and capital accumulation; (b) long term growth; (c) the U.S. trade balance; (d) the US economic relationship with other countries, like China; and (e) per capita income. Explain. Use math, graphs, and discussion. In particular, consider: (1) national income accounting equations and the three sources of savings (personal, government, foreign); (2) the role of investment in GDP and growth; and (3) the Solow model.

2. Policy Topic: We live in a poor country. Are we doomed to always be poor?

Are some countries doomed to always be poor? Solow’s model suggests that poor countries can achieve a certain level of GDP per capita, but then reach a “steady state.” Explain how/why? And contrast this to the conclusions of the endogenous growth model’s conclusions. Why are the conclusions different? Use math, graphs, and discussion to explain.

3. Policy Topic: We live in a poor country. Would boosting the savings rate fix everything?

If a country increases its savings, it would have more to spend on capital investment, and thus help its production, GDP, and per capita output. Yes? Explain what our different development models would tell policymakers in poor countries about their savings. Use math, graphs, and discussion. In particular, consider both the Solow model and the endogenous growth model,

4. Policy Topic: If we introduce big initiatives to acquire foreign technology, what will happen to us?

Under the Solow Framework, what does an increase in technology do for capital accumulation, growth, and per capita income in a poor country? Use math, graphs, and discussion.

5. Policy Topic: Assume we are in the depths of the 2009 Recession. What should we do?

After the financial crisis began in late 2008, President Bush and then President Obama both introduced heavy stimulus measures to increase output. Using the AS-AD Framework, discuss these measures and all of their effects. How would the Keynesians explain the story? Compare and contrast this to how the classicalists would explain the story. How would both schools suggest the US would get out of a recessionary gap? Use many graphs, math, and discussion. In particular, assume a Classical version of the AS curve; and then separately assume a Keynesian one. Discuss your findings.

1. Policy Topic: We have Stagflation. What can we do?

Janet Yellen and the Federal Reserve are charged with combatting BOTH unemployment AND inflation. Congress doesn’t like either problem, either. If there is another oil shock, this causes the supply curve to shift up, causing both problems: “stagflation” (low GDP and higher prices). Using the AS-AD framework, analyze all of the policy responses and their results. Consider:

a. Contractionary Fiscal Policy

b. Expansionary Fiscal Policy

c. Contractionary Monetary Policy

d. Expansionary Fiscal Policy

e. Combinations of any of the above

f. Do nothing. Assume the Classicalist approach will fix it. (Explain).

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1: Prove that the problem of finding a Hamilton cycle in a directed graph is  NP-complete, using the NP-completeness of the Hamilton-cycle problem for undirected graphs.

2. Suppose that two problems are known to be NP-complete. Does this imply that there is a polynomial-time reduction from one to the other, if P INP?

 

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1.  Prove that the linear transformation represented by the matrix M is rigid if and only if MT = M−1.

2.  Show that the linear transformation represented by the matrix M is orientation-preserving if and only if det (M) > 0.[

3.  Figure II.9 shows an affine transformation acting on an F.

(a) Is this a linear transformation? Why or why not?

(b) Give a 3 × 3 matrix that represents the affine transformation.

 

 

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1. Produce a projected capital budgeting cash flows statement for Sneaker 2013 project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Sneaker 2013 appear viable from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
2. Produce a projected capital budgeting cash flow statement for Persistence project by answering the following:
a. What is the project’s initial (year 0) investment outlay? b. What are the project’s annual (year 2013-2018) net operating cash flows? c. What is the project’s terminal (2018) non-operating net cash flow? d. Does Persistence appear attractive from a quantitative standpoint? (To answer this question, estimate the project’s payback, net present value, and internal rate of return)
3. Between the two projects, which project do you think is more risky? How do you think you should incorporate differences in risk in your analysis?
4. Based on the calculated payback period, net present value (NPV) and internal rate of return (IRR) for each project, which project looks better for New Balance shareholders? Why?
5. Should Rodriguez be more critical or less critical of cash flow forecasts for Persistence than of cash flow forecasts for Sneaker 2013? Why?
6. What is your final recommendation to Rodriguez?

 

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