Sarah owns a bakery that has four ovens, one full-time exempt administrative employee, and eight part-time hourly bakers. Based on this information,…
September 3, 2020
I need help especially with B-D, thank you! This is for a intermediate Macro class. 1. (IS-LM and Aggregate Demand] Consider the equation FY = MV which essentially implies that every transaction in the economy must be paid with money. Money velocitycan in turn be written as a function of the nominal interest rate V = LE}. a] Assume L(i} = 23′ and E [if] = U. derive the money demand equation with r as a func-tion of Y, M and P. {Hint: what is the relation between T and 3′). Assume money supply is fixed at a level 111, make a graph with ‘r on the Y-axis and M on the X—axis showing theequilibrium values of r and M. b) Let investment and consumption be fiven respectively by HT) 2 f — mi" and C =C + ng. p; L“? U and 1 2} pg 2:? 0. Government expenditure G is exogenously determined.Find the IS curve by expressing “r as a function of Y (Hint: Use the aggregate resourceconstraint for this economy). Combine the IS and LM curves to find the equilibrium values of r and Y. Make a graph with both the IS—LM curves, label the slopes and the equilibriumvalues. In the IS—LM model we are assuming an economy in the short run with fixed prices (theslope of the LM curve changes when prices change). c} Combine the IS and LM curves to express P as a function of Y. This is the ADequation. Consider the short-run case where prices are completely fixed at a level P. Makea graph with the AD, SEAS and LRAS curves assuming the economy is in a long-run equi-librium. [1} Assume the government increases expenditure by AG funded through a deficit. Show graphically the effect on P, Y and 1" using both the AD—AS and IS-LM models. Computethe changes in Y and r.
September 3, 2020

What is the difference between statistical significance and practical significance? Why is statistical significance not necessarily of practical important difference to a business decision? Provide an example of this.I need a comment (verify solution) in 25-75 words from the response given below from the question listed above.”Statistical significance refers to the unlikelihood that mean differences observed in the sample have occurred due to sampling error. Practical significance looks at whether the difference is large enough to be of value in a practical sense.” Statistical refers to the null hypothesis where as the practical lays out the calculations and conclusions. Some reasons why statistical is not of the most importance is because “Tests of statistical significance rarely tell us about the importance of a research result and effect size tells us about magnitude of difference, which is important, but it is difficult for practice-oriented practitioners to comprehend.” If a sample is taken of such few numbers, it will not provide any real evidence towards whether the null hypothesis is really correct or not. There needs to be a greater amount of ‘n’ for the evidence to be practical. The link provided helps at spelling it out more. Still a little confused with this chapter but this may help some of you. Reference:

Statistical significance is not as useful as practical significance in business decisions mainlybecause statistical information is not freely available and is subject to many tests which mightnot…

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