Earthquakes and GDP: Suppose the rural part of a country is hit by a major earthquake that destroys 10 percent of the country's housing stock. The govern- ment and private sector respond with a major construction effort to help rebuild houses. Discuss how this episode is likely to affect (a) the economic well-being of the people in the country and (b) the economy's measured GD. WORKED EXERCISE 1. What counts as GDP (I)

Amachine purchased three years ago for $720,000 has a current book value using straight-line depreciation of $400,000: its operating expenses are $60,000 per year. a replacement machine would cost $480,000, have a useful life of nine years, and would require $26,000 per year in operating expenses. it has an expected salvage value of $130,000 after nine years. the current disposal value of the old machine is $170,000: if it is kept 9 more years, its residual value would be $20,000. calculate the total costs in keeping the old machine and purchase a new machine. should the old machine be replaced?

The returns on the common stock of maynard cosmetic specialties are quite cyclical. in a boom economy, the stock is expected to return 22 percent in comparison to 9 percent in a normal economy and a negative 14 percent in a recessionary period. the probability of a recession is 35 percent while the probability of a boom is 10 percent. what is the standard deviation of the returns on this stock?

%of the world's population controls approximately % of the world's finances (the sum of gross domestic products)" quizlket