Wolf of Wall Street (Finance)
The interest rate of a bond is calculated as the
(FV - P)/P
What is the formula for the LFPR?
LF/eligible pop
or unemp+emp/ eligible pop
What is the VERBATIM definition of GDP?
The market value of final goods and services produced in a country in a year.
What are the 4 shortcomings (exclusions) of GDP as a calculation of a country's income/wellbeing?
1. Non-market activity
2. Illicit market activity
3. Externalities/environmental impact
4. Leisure time
What is Coppock's son's name?
Jackson
If the interest rate on a 1-year bond is 15% and its face value is $10,000.00, the dollar price of the bond is
$8,695.65
Who is in the eligible population?
16+ non student non military non institutionalized non jailed pop
What is the VERBATIM definition of inflation?
The growth rate of the overall price level in an economy
A country's nominal GDP in 2025 is $20 trillion, and the price level in 2025 is 125. The price level in the 2023 is 100. What is the real GDP in 2025?
16 trillion
The central bank of a country increases the money supply by 8%. The velocity of money remains constant. If real GDP grows by 3%, what is the expected inflation rate in this economy?
5%
GRAPH IT: What would be the effect on the market for bonds of Company X if the default risk decreases for Company X?
Demand for bonds of Company X will increase, so the equilibrium price of the bonds will increase and the equilibrium quantity of bonds will increase
USING CHART ON BOARD Compute the rate of inflation for Sweden in 2020. Express your answer in percentage terms and round to one decimal place. Show all your work for any chance at partial credit, and write your answer in the box on the right.
0%
What VERBATIM are the two Rotunda Principles?
Trade creates value
Incentives affect behavior
In France, the average work week is shorter than that in the U.S. All else equal, this can cause France’s measured GDP to ___________ its living standards:
(wordbank: accurately estimate, both over and under estimate, underestimate, overestimate)
Underestimate
1. What is the Easterlin paradox?
2. What did Stevenson and Wolfers find about the Easterlin paradox?
1. Income increases happiness only up to a point.
2. The Easterlin paradox is incorrect when you look at percentage changes in income (increases in income relative to your current income)
You take out a loan today at a nominal rate of 5%; inflation for the past two years has been exactly 4%. Inflation instantly drops to 3% and stays that way for the duration of your loan. Is the drop in inflation good or bad for you as a borrower and why?
Bad for you, your real interest rate owed grows from 1% before the drop to 2% after the drop
USING CHART ON BOARD Compute the rate of real GDP growth for both Canada and Sweden in 2020. Express your answer in percentage terms and round to one decimal place. Show all your work for any chance at partial credit, and write your answers in the box on the right.
Canada: -6.5%
Sweden: -0.5%
What is the definition of economic growth (in words)?
The percentage change in real GDP per capita.
If "Albemarle County buys a $1,500 Dell computer
to use in their county offices, " the ____ dollars enter into the ____ category of GDP, while if "Jungkook of, a citizen/resident of South Korea, buys a $1,500 Dell computer for personal gaming," the _____ dollars enter into the _____ category of GDP
G
1500
NX
1500
What is the VERBATIM official definition of equilibrium?
The price at which quantity supplied and quantity demanded are equal.
GRAPH: Assume capital becomes less productive and, at the same time, household wealth falls. What happens to the equilibrium P and Q in the LF mkt?
Q decreases, P indeterminate
USING CHART ON BOARD Compute the unemployment rate for Canada in 2020. Express your answer in percentage terms and round to one decimal place. Show all your work for any chance at partial credit, and write your answer in the box on the right.
9.3%
The three shift factors for supply in loanable funds are
Income and Wealth (+): supply shift factor
Time Preferences (-): supply shift factor
Consumption Smoothing (+/-): supply shift factor
A country with a population of 2,000 has a 2024 nominal GDP of $22 billion, and a 2024 price level of 110. The price level in 2023 is 100. Between 2024 and 2025 the population increases by 100 people and the nominal GDP in 2025 is $24.2 billion, with a price level of 115. What is the rate of economic growth between 2024 and 2025? three decimal places
0.207%
The three shift factors for demand in loanable funds are
1. Changes in government spending
2. Capital Productivity (+): demand shift factor
3. Investor Confidence (+): demand shift factor