This question is complete
Other receipts for the couple were as follows: Dividends (all qualified dividends) $2.500 Interest income: Union Bank $ 220 State of Idaho-interest on tax refund 22 City of Boise school bonds 1.250 Interest from U.S. savings bonds 410 (not used for educational purposes) 2017 federal income tax refund received in 2018 2,007 2017 state income tax refund received in 2018 218 Idaho lottery winnings 1.100 Casino slot machine winnings 2,250 Gambling losses at casino 6.500 Other information that the Reyeses provided for the 2018 tax year. Mortgage interest on personal residence $11.081 Loan interest on fully equipped motor home 3.010 Doctor's fee for a face-lift for Mrs. Reyes 8.800 Dentist's fee for a new dental bridge for Mr. Reyes 3,500 Vitamins for the entire family 1 10 Real estate property taxes paid $ 5,025 DMV fees on motor home (tax portion) 1.044 DMV fees on family autos (tax portion) 436 Doctors' bills for grandmother 2,960 Nursing home for grandmother 10,200 Wheelchair for grandmother 1.030 Property taxes on boat 134 Interest on personal credit card 550 Interest on loan to buy public school district bonds 270 Cash contributions to church (all the contributions 6.100 were in cash and none more than $250 at any one time) Cash contribution to man at bottom of freeway off-ramp 25 Contribution of furniture to Goodwill-cost basis 4,000 Contribution of same furniture to listed above Goodwill-fair market value 410 Tax return preparation fee for 2017 taxes 625 Required Prepare a Form 1040 and appropriate schedules, Schedule A, and Schedule B for the comple- tion of the Reyes's tax return. They do not want to contribute to the presidential election cam- paign and do not want anyone to be a third-party designee. For any missing information, make reasonable assumptions. They had qualifying health coverage at all times during the year.rnr r'- r" 1.The concept of GDP is used by policy makers for many purposes that include keeping track ofthe growth of our economy and forecasting a recession; but it is also abused by some. Discuss some of the applications of GDP which may be considered improper use or abuse of the concept. 2." Even though the Great Recession ofcially ended, the unemployment rate is still considered high.' Discuss. 3.Discuss how the distribution of income among various groups of income earners have changed in this country during the past 5D years. in your opinion, do we need to initiate any policy to address the distribution of income? Make sure you provide references to anyconclusions you arrive at. 4.Many people feet the Fed, which is largely independent of Congress and the President, is too powerful. In fact, the Chairman of the Fed Board of Governors, Ben Bernanke, has been called the second most powerful person in the country. Do you think the Fed is too powerful? Should Congress have more oversight of the Fed? Share your thoughts. 5."N either monetary policy nor fiscal policy alone can be effective in formulating sound economic policies for recession.' Do you agree or disagree? Share your thoughts. Effou now should realize how important it is for economists to try and predict future conditions of the LLB. economy. Economists are also interested in the performance of the economy at a more local level. Discuss how local and national forecasts play an important role in the State and Federal levels. If here have been significant discussions on the government's scal policy during the Great Recession. in particular, many did not like the government's actions in salvaging the auto industry in providing guaranteed loans to GM and Chrysler. What is your opinion? Provide economic reasons for your opinion. The Pristine River Case The Pristine River has two polluting firms on its banks. Acme Industrial and Creative Chemicals each dump 100 tons of glop into the river each year. The cost of reducing glop emissions per ton equals $10 for Acme and $100 for Creative. The local government wants to reduce overall pollution from 200 tons to 50 tons. a. If the government knew the cost of reduction for each firm, what reductions would it impose to reach its overall goal? What would be the cost to each firm and the total cost to the firms together? b. In a more typical situation, the government would not know the cost of pollution reduction at each firm. If the government decided to reach its overall goal by imposing uniform reductions on the firms, calculate the reduction made by each firm, the cost to each firm, and the total cost to the firms together. c. Compare the total cost of pollution reduction in parts (a) and (b). If the government does not know the cost of reduction for each firm, is there still some way for it to reduce pollution to 50 tons at the total cost you calculated in part (a)? Explain.will have to sell the property at a loss. Prots (in thousands of dollars) are shown in the following payoff table: State of Nature Rezoning Approved Rezoning Not Approved Decision Alternative .31 3'2 Purchase, ch 600 - 200 Do not purchase, d2 0 0 a. If the probability that the rezoning will be approved is 0.5, what decision is recom- mended? What is the expected prot? b. The investor can purchase an option to buy the land. Under the Option, the investor maintains the rights to purchase the land anytime during the next three months while learning more about possible resistance to the rezoning prOposal from area residents. Probabilities are as follows: Let H = High resistance to rezoning L = Low resistance to rezoning P(H) = 0.55 P(sl l H) = 0.18 P(sZIH) = 0.82 P(L) = 0.45 Pm l L) = 0.39 13(52 | r.) = 0.11 What is the optimal decision strategy if the investor uses the option period to learn more about the resistance from area residents before making the purchase decision? c. If the option will cost the investor an additional $10,000, should the investor purchase the option? Why or why not? What is the maximum that the investor should he will- ing to pay for the option
