Blog

Suppose we have the following real estate speculation scenario for a 1 year investment: Purchase price of house: $150,000 Equity: $120,000 Debt: $30,000 @10% interest Interest Payments: $3,000   Suppose after 1 year the real estate speculator is able to sell the house for $50,000  during a time of decreasing real estate asset prices. What is the rate of return?

Suppose we have the following real estate speculation scenario for a 1 year investment: Purchase price of house: $200,000 Equity: $190,000 Debt: $10,000 @10% interest Interest Payments: $1,000   What is the leverage ratio in this scenario?

Suppose we have the following information for 2010: Potential output: $20 trillion Actual output: $19 trillion Actual Deficit: $ 200 billion Tax Rate: 15%   What is the structural deficit in 2010? What could be causing the structural deficit?

Suppose we have the following information for 2008: Potential output: $8 trillion Actual output: $7 trillion Actual Deficit: $ 250 billion Tax Rate: 6%   What is the structural deficit in 2008?

According to the fractional reserve theory of banking (money multiplier model), if the central bank simultaneously decreases the reserve requirement and sells government bonds in the open market, then the money supply will?

Checking account balances are:

27. What is used to carry the dental floss under the contact point for class I embrasures?

Explicit functions of the Fed include all the following except:

Here is the following scenario for a 1 year investment:   Purchase stock: $100 Equity invested: $80 Debt: $10 Interest Payments: $1 (10% interest) Sales price after 1 year: $150   If the leverage ratio were to decrease would the rate of return for the year increase or decrease? Why?

Refer to the balance sheet above. What is a viable way for Bank of America to acquire central bank reserves and meet its liquidity needs?