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Determine the steps the Federal Reserve should take to help stabilize our economy.Explain how each of the following variables will be affected by proposed steps that you have identified:money supply, interest rates,inflation rate,aggregate demand.
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ECON 102 Deficit Spending Government Role National Economy Paper
Assignment 1: Deficit SpendingDuring the Great Recession, like any other economic downturns, as unemployment rises, aggreg ...
ECON 102 Deficit Spending Government Role National Economy Paper
Assignment 1: Deficit SpendingDuring the Great Recession, like any other economic downturns, as unemployment rises, aggregate income declines causing a major decline in tax collections. On the other hand, with the rise in unemployment, spending on safety net programs rise. So, there are not too many good options available to resort the health of the national economy. It will be very difficult to defend cuts in the federal government programs and especially the programs geared to sustain the minimum of the standard of living for the recent "poor." So, government needs to increase its borrowing. Deficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. Deficit spending hence increases government debt. Most economists accept that deficit spending is desirable and necessary as part of countercyclical fiscal policy. In such a case, government increases its borrowing and hence its deficit to compensate for the shortfall in aggregate demand. This is derived from Keynesian economics, and has been the mainstream economics view. Following John Maynard Keynes, many economists recommend deficit spending to moderate or end a recession, especially a severe one. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. (This is the multiplier effect). This raises the real gross domestic product (GDP) and the level of employment and lowers the unemployment rate. Government borrowing under such circumstances increases the demand for borrowing and thus pushes interest rates up. Rising interest rates can "crowd out" (discourage) fixed private investment spending, canceling out some of the demand stimulus arising from the deficitWrite an essay analyzing the advantages and disadvantages of deficit spending and the effects of federal government borrowing on the economy i.e., the "crowding out" effect. Complete this essay in a Microsoft Word document, and in APA format. Note your submission will automatically be submitted through "TurnItIn" for plagiarism review. Please note that a minimum of 700 words for your essay is required.Your paper should be structured as follows1. Cover page with a running head 2. Introduction: What is deficit spending and how does it work.2.1. Advantages2.2. Disadvantages3. Crowding-out Effect4. Conclusions: Do you believe that deficit spending helps or hinders short-term and long-term economic growth?5. References
managerial economics.assignment 1. 3 questions with parts
the textbook for this class is:Hirschey, Mark, Fundamentals of Managerial Economics, 9th Edition, Thompson: South-Western ...
managerial economics.assignment 1. 3 questions with parts
the textbook for this class is:Hirschey, Mark, Fundamentals of Managerial Economics, 9th Edition, Thompson: South-Western 2009, ISBN: 0-324-58878-X.
Harvard Business Andreessen Horowitz Case Study
Case study. (I will provide notes for the case) Answer the questions.Was the capital an attractive industry to enter in 20 ...
Harvard Business Andreessen Horowitz Case Study
Case study. (I will provide notes for the case) Answer the questions.Was the capital an attractive industry to enter in 2009? What entrepreneurial opportunity did Andreessen Horowitz see?“ to succeed as a VC you have to do three things really well: source, pick, and win”(case p.8). what does a traditional VC firm do to source pick and win? How does a16z approach these key success factors differently than other VC firms?If you were a first-time founder of a tech startup seeking Series A positive investors, would you find a16z’s value proposition attractive?Is a16z’s big investment in its operating team likely to yield a positive return? Should other top-tier VC firms copy this approach?Evaluate the following a16z organizational policies and practices: a) criteria for hiring General Partners: b) compensation approach for GP’s: and c) co-founders’ governance rights. How important will each be to the firm’s success?Should a16z seek to double its assets under management over the next two years? If you support rapid expansion, would you diversify into other sectors (eg. Life-sciences, clean tech)and/or geographies (e.g. China, New York)To understand the potential financial impact of doubling assets under management, estimate a16z’s “steady-state” annual revenue and its costs before GP compensation using the following assumptions:a16z raises a new $1.5 billion fud every 3.33 years; fund life averages 10 years. So, in steady state, a16z would have $4.5 billion in total committed capital- 1.7x its current scale-and would invest $450 million per year.Across its entire portfolio, exit proceeds average 2.5-3x capital invested, consistent with successful VC fund performance.Management fees equal 2.5% of committed capital and carry equals 25% of capital gains. Ignore thresholds that boost the carry to 30% and the fact that management fees on parallel fuds are paid on invested rather than the committed capital.To calculate costs, estimate average annual cash compensation per non-GP employee. Then increase that figure to reflect additional expenses for benefits, rent, travel, professional services, etc. finally, estimate the number of non-GP employees a16z would require to support a 1.7x increase in scale to$4.5 billion in committed capital. Note that a16z currently has 74 non-GP employees, 43 of whom are operating team professionals.As you consider Question#6, not that four of the top VC firms listed in Exhibit 9- Bessemer, Kleiner Perkins, NEA, and Sequoia – invest across info tech, life services, and clean tech; the other five firms focus solely or very heavily on info tech.Also, with respect to Exhibit-6, note that the investment tally for a given year includes many follow-on rounds for startups in which a16z made an earlier investment. For 2003, for example, of 49 rounds not classified as “seed,” 22 were follow-on rounds and 27 were firs-time investments for a16z. Further note that a 16z does not provide all of the capital in a given round. It typically co-invests with other venture capital firms. In analyzing Exhibit 6, assume that a16z’s share of total round proceeds averages 50%. This is just a guess: a 16z does not disclose its actual share of funding rounds.
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ECON 102 Deficit Spending Government Role National Economy Paper
Assignment 1: Deficit SpendingDuring the Great Recession, like any other economic downturns, as unemployment rises, aggreg ...
ECON 102 Deficit Spending Government Role National Economy Paper
Assignment 1: Deficit SpendingDuring the Great Recession, like any other economic downturns, as unemployment rises, aggregate income declines causing a major decline in tax collections. On the other hand, with the rise in unemployment, spending on safety net programs rise. So, there are not too many good options available to resort the health of the national economy. It will be very difficult to defend cuts in the federal government programs and especially the programs geared to sustain the minimum of the standard of living for the recent "poor." So, government needs to increase its borrowing. Deficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. Deficit spending hence increases government debt. Most economists accept that deficit spending is desirable and necessary as part of countercyclical fiscal policy. In such a case, government increases its borrowing and hence its deficit to compensate for the shortfall in aggregate demand. This is derived from Keynesian economics, and has been the mainstream economics view. Following John Maynard Keynes, many economists recommend deficit spending to moderate or end a recession, especially a severe one. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. (This is the multiplier effect). This raises the real gross domestic product (GDP) and the level of employment and lowers the unemployment rate. Government borrowing under such circumstances increases the demand for borrowing and thus pushes interest rates up. Rising interest rates can "crowd out" (discourage) fixed private investment spending, canceling out some of the demand stimulus arising from the deficitWrite an essay analyzing the advantages and disadvantages of deficit spending and the effects of federal government borrowing on the economy i.e., the "crowding out" effect. Complete this essay in a Microsoft Word document, and in APA format. Note your submission will automatically be submitted through "TurnItIn" for plagiarism review. Please note that a minimum of 700 words for your essay is required.Your paper should be structured as follows1. Cover page with a running head 2. Introduction: What is deficit spending and how does it work.2.1. Advantages2.2. Disadvantages3. Crowding-out Effect4. Conclusions: Do you believe that deficit spending helps or hinders short-term and long-term economic growth?5. References
managerial economics.assignment 1. 3 questions with parts
the textbook for this class is:Hirschey, Mark, Fundamentals of Managerial Economics, 9th Edition, Thompson: South-Western ...
managerial economics.assignment 1. 3 questions with parts
the textbook for this class is:Hirschey, Mark, Fundamentals of Managerial Economics, 9th Edition, Thompson: South-Western 2009, ISBN: 0-324-58878-X.
Harvard Business Andreessen Horowitz Case Study
Case study. (I will provide notes for the case) Answer the questions.Was the capital an attractive industry to enter in 20 ...
Harvard Business Andreessen Horowitz Case Study
Case study. (I will provide notes for the case) Answer the questions.Was the capital an attractive industry to enter in 2009? What entrepreneurial opportunity did Andreessen Horowitz see?“ to succeed as a VC you have to do three things really well: source, pick, and win”(case p.8). what does a traditional VC firm do to source pick and win? How does a16z approach these key success factors differently than other VC firms?If you were a first-time founder of a tech startup seeking Series A positive investors, would you find a16z’s value proposition attractive?Is a16z’s big investment in its operating team likely to yield a positive return? Should other top-tier VC firms copy this approach?Evaluate the following a16z organizational policies and practices: a) criteria for hiring General Partners: b) compensation approach for GP’s: and c) co-founders’ governance rights. How important will each be to the firm’s success?Should a16z seek to double its assets under management over the next two years? If you support rapid expansion, would you diversify into other sectors (eg. Life-sciences, clean tech)and/or geographies (e.g. China, New York)To understand the potential financial impact of doubling assets under management, estimate a16z’s “steady-state” annual revenue and its costs before GP compensation using the following assumptions:a16z raises a new $1.5 billion fud every 3.33 years; fund life averages 10 years. So, in steady state, a16z would have $4.5 billion in total committed capital- 1.7x its current scale-and would invest $450 million per year.Across its entire portfolio, exit proceeds average 2.5-3x capital invested, consistent with successful VC fund performance.Management fees equal 2.5% of committed capital and carry equals 25% of capital gains. Ignore thresholds that boost the carry to 30% and the fact that management fees on parallel fuds are paid on invested rather than the committed capital.To calculate costs, estimate average annual cash compensation per non-GP employee. Then increase that figure to reflect additional expenses for benefits, rent, travel, professional services, etc. finally, estimate the number of non-GP employees a16z would require to support a 1.7x increase in scale to$4.5 billion in committed capital. Note that a16z currently has 74 non-GP employees, 43 of whom are operating team professionals.As you consider Question#6, not that four of the top VC firms listed in Exhibit 9- Bessemer, Kleiner Perkins, NEA, and Sequoia – invest across info tech, life services, and clean tech; the other five firms focus solely or very heavily on info tech.Also, with respect to Exhibit-6, note that the investment tally for a given year includes many follow-on rounds for startups in which a16z made an earlier investment. For 2003, for example, of 49 rounds not classified as “seed,” 22 were follow-on rounds and 27 were firs-time investments for a16z. Further note that a 16z does not provide all of the capital in a given round. It typically co-invests with other venture capital firms. In analyzing Exhibit 6, assume that a16z’s share of total round proceeds averages 50%. This is just a guess: a 16z does not disclose its actual share of funding rounds.
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