1. Company A purchases $200,000 of equipment in year zero. It decides to use straight-line

depreciation over the expected 20 years life of the equipment. The interest rate is 14%. If its

average tax rate is 40%, what is the present worth of the depreciation tax held?

2.Measuring Inflation

What is theCPI?

How is it constructed, and how does it measure inflation?

Why is it so important to so many people in the U.S. today?

What are some of it weaknesses?

3.Circular Flow Model Used in Macroeconomics

Draw the circular flow of economic activity, labeling all economic actors, markets, and money flows.

4.Discuss the weaknesses of using GDP data

5.Explain levels of inflation

6.Use graphs to illustrate what a shortage (excess demand) is

7.Show how economic growth can be illustrated with a production possibilities frontier

8.Draw a production possibilities frontier

9.Given this question: National income is increasing by 1.5% a year and population by 2.5% a year. What is the rate of growth of per capita income?

10.Gen is interested in seeing how the money grows. Her mom suggests that she takes the money in her piggy bank and deposits it in a local bank paying 8.5% compounded quarterly. IF she finds $700 in the piggy bank, how much will it grow to in 10 years?