During the recent recession, several european countries proposed austerity measures that would shrink the size of the national deficits within the countries. these proposed measures included tax hikes and cuts in government spending. when this happened in the united states in the 1990s, there was an accompanying decrease in the policy rate to avoid slowing the economy down too much. why was this same policy decision more difficult in europe? a. in response to the recession, the policy rate in europe had already been lowered close to the zero lower bound, so additional decreases were not viable. b. europeans protested against the austerity measures, which angered the government; it responded by intentionally not taking steps to limit the impact of these measures. c. there is no mechanism in europe to change the policy rate like there is in the united states. d. european governments had never implemented these types of austerity policies before so they were not aware of the need for monetary policy to limit the impacts.

Suppose the price of a complement to lcd televisions rises. what effect will this have on the market equilibrium for lcd tvs?

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?

The production manager of rordan corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st quarter 2nd quarter 3rd quarter 4th quarter units to be produced 10,800 8,500 7,100 11,200 each unit requires 0.25 direct labor-hours, and direct laborers are paid $20.00 per hour. required: 1. prepare the company’s direct labor budget for the upcoming fiscal year. assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. 2. prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,500 hours of work each quarter. if the number of required direct labor-hours is less than this number, the workers are paid for 2,500 hours anyway. any hours worked in excess of 2,500 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.