please help me with that!! thank you so much

1 . Future and present values Suppose a relative has promised to give you $1,000 as a wedding gift the day you get engaged. Assuming a constant interest rate of 10%, consider the present and future values of this gift, depending on when you become engaged. Complete the first row of the following table by determining the value of the gift in one and two years with interest if you become engaged today and save the money. 1. a) 909.09 b) 1,100.00 c) 1,210.00 d) 1,331.00 Present Value Value in One Year Value in Two Years 2. a) 826.45 b) 1,010.00 c) 1,100.00 d) 1,210.00 Date Received ( Dollars) (Dollars) (Dollars) Today 1,000.00 1. 3. a) 826.45 b) 909.09 c) 1,100.00 d) 10,000.00 2. In 1 year 3. 1,000.00 4. a) 826.45 b) 909.09 c) 1,210.00 d) 100,000.00 In 2 years 4. 1,000.00 Now complete the first column of the previous table by computing the present value of the gift if you get engaged in one year or two years. The present value of the gift is if you get engaged in two years than it is if you get engaged in one year. a) greater b) smaller11} . Using money creation to pay for government spending Consider Tralfamadore, a hypothetical country that produces only burgers. In 2019, a burger is priced at $2.00. Complete the first row of the tabie with the quantity of burgers that can be bought with $700. Hint: In this problem, assume it is not possible to buy a fraction of a burger, and always round down to the nearest whole burger. For example, if your calculations result in 1.5 burgers, the answer should be 1 burger. Price of a Burger Burgers Bought wilt siren 1. a} inflation tax Year (Domyrs) (Quantity) [3} velocity of money c} classical dichotomy 2019 2.00 E d} fisher effect Suppose the government of Tralfamadore cannot raise sufficient tax revenue to pay its debts. In order to meet its debt obligations, the government prints money. As a result, the money supply rises by 40% by 2020. Assuming monetary neutrality hoids, complete the second row of the tabie with the new price of a burger and the new quantity of burgers that can be bought with $200 in 2020. The impact of the government's decision to raise revenue by printing money on the value of money is known as the 1- V . 2 . How interest rate changes affect present and future value Suppose you will receive a payment of $500 one year from now. True or False: If during the year the interest rate rises, this increases the present value of your future payment. O True O False3 . Using the rule of 70 Consider an imaginary economy that has been growing at a rate of 4% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate. Using the rule of 70, determine the number of years it will take the economy to double at each growth rate. Growth Rate Years Required to Double (Percent) (Nearest whole number of years) 4 Un 64 . Risk and return Suppose Rosa is choosing how to allocate her portfolio between two asset classes: risk-free government bonds and a risky group of diversified stocks. The following table shows the risk and return associated with different combinations of stocks and bonds. Fraction of Portfolio in Diversified Average Annual Standard Deviation of Portfolio Return Stocks Return (Risk) Combination (Percent) (Percent) (Percent) A 2.00 25 3.50 5 50 5.00 10 mon 75 6.50 15 100 8.00 20 a) higher b) lower If Rosa reduces her portfolio's exposure to risk by opting for a smaller share of stocks, she must also accept a average annual return. Suppose Rosa currently allocates 75% of her portfolio to a diversified group of stocks and 25% of her portfolio to risk-free bonds; that is, she chooses combination D. She wants to reduce the level of risk associated with her portfolio from a standard deviation of 15 to a standard deviation of 5. In order to do so, she must do which of the following? Check all that apply. 1. a) -6.5% b) 0.4% c) 8.5% d) 13.5% Accept a lower average annual rate of return 2. a) -6.5% b) -1.5% c) 0.4% d) 13.5% Place the entirety of her portfolio in bonds Sell some of her stocks and use the proceeds to purchase bonds O sell some of her bonds and use the proceeds to purchase stocks The table uses the standard deviation of the portfolio's return as a measure of risk. A normal random variable, such as a portfolio's return, stays within two standard deviations of its average approximately 95% of the time. Suppose Rosa modifies her portfolio to contain 25% diversified stocks and 75% risk-free government bonds; that is, she chooses combination B. The average annual return for this type of portfolio is 3.5%, but given the standard deviation of 5%, the returns will typically (about 95% of the time) vary from a gain of 1. to a loss of 2.5 . The roles of money Carlos wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $750. He has only $1,537 in his checking account, so he cannot afford to purchase both. After much thought, Carlos buys the computer and writes a check for $1,299. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Medium of Unit of Store of Role of Money Exchange Account Value Carlos can easily determine that the price of the computer is more than the price of O O O the vacation. Carlos has $1,537 in his checking account. O O O Carlos writes a check for $1,299. O O O6 . Required and excess reserves Suppose that Best National Bank currently has $200,000 in demand deposits and $130,000 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Best National Reserves Required Reserves Excess Reserves (Dollars) ( Dollars) (Dollars)7 . The reserve requirement, open market operations, and the money supply Assume that banks do not hold excess reserves and that households do not hold currency, so the only form of money is demand deposits. To simplify the analysis, suppose the banking system has total reserves of $300. Determine the money multiplier and the money supply for each reserve requirement listed in the following table. 1.,3. a) 1 b) 2 c ) 5 d) 10 e) 20 2.,4. a) 300 b) 600 c) 1500 d) 3000 e) 6000 Reserve Requirement Money Supply 5. fall rise (Percent) Simple Money Multiplier (Dollars) 6. 1 2.5 4 5 10 20 2 . 10 3. A higher reserve requirement is associated with a money supply. a) larger, b) smaller Suppose the Federal Reserve wants to increase the money supply by $200. Again, you can assume that banks do not hold excess reserves and that households do not hold currency. If the reserve requirement is 10%, the Fed will use open-market operations to * $ worth of U.S. government bonds. a) buy b) sell Now, suppose that, rather than immediately lending out all excess reserves, banks begin holding some excess reserves due to uncertain economic conditions. Specifically, banks increase the percentage of deposits held as reserves from 10% to 25%. This increase in the reserve ratio causes the money multiplier to. * to 6. . Under these conditions, the Fed would need to worth of U.S. government bonds in order to increase the money supply by $200. a) buy b) sell Which of the following statements help to explain why, in the real world, the Fed cannot precisely control the money supply? Check all that apply. The Fed cannot control the amount of money that households choose to hold as currency. O The Fed cannot prevent banks from lending out required reserves. The Fed cannot control whether and to what extent banks hold excess reserves.8 . The level of prices and the value of money Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of chips, and one comic book. In year one, the basket costs $9.00. a) inflation b) deflation 1. In year two, the price of the same basket is $8.00. From year one to year two, there is at an annual rate of 2. 3. In year one, $72.00 will buy baskets, and in year two, $72.00 will buy baskets. 4. This example illustrates that, as the price level falls, the value of money 1. a) 1% b) 1.11% c) 1.25% d) 11.11% e) 12.5% 2. , 3. a) 0.11 b) 0.13 c) 4.5 d) 8 e) 9 4. a) rise b) fall c) remain the same9 . The classical dichotomy and the neutrality of money The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Rina spends all of her money on paperback novels and donuts. In 2015, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a donut was $3.00. Which of the following give the nominal value of a variable? Check all that apply. O Rina's wage is $27.00 per hour in 2015. The price of a donut is 0.33 paperback novels in 2015. O The price of a donut is $3.00 in 2015. 1. a) 0.33 donuts b) 3 donuts c) $6 d) $18 Which of the following give the real value of a variable? Check all that apply. 2. , 3. a) decrease b) increase O Rina's wage is 9 donuts per hour in 2015. c) remain the same O The price of a paperback novel is $9.00 in 2015. 4., 5. a) affect b) does not affect O The price of a paperback novel is 3 donuts in 2015. Suppose that the Fed sharply increases the money supply between 2015 and 2020. In 2020, Rina's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a donut is $6.00. In 2020, the relative price of a paperback novel is 1. Between 2015 and 2020, the nominal value of Rina's wage 2. , and the real value of her wage 3. Monetary neutrality is the proposition that a change in the money supply 4. nominal variables and 5. real variables