You are given the following information. The current dollar−pound exchange rate is $2 per British pound. A U. S. basket that costs $100 would cost $120 in the United Kingdom. For the next year, the Fed is predicted to keep U. S. inflation at 2% and the Bank of England is predicted to keep U. K. inflation at 3%. The speed of convergence to absolute PPP is 15% per year.
a) What is the expected U. S minus U. K. inflation differential for the coming year?
b) What is the current U. S real exchange rate qUS/UK with the United Kingdom?
c) How much is the dollar overvalued / undervalued?
d) What do you predict the U. S. real exchange rate with the United Kingdom will be in one year's time?
e) What is the expected rate of real depreciation for the United States (versus the United Kingdom)?
f) What is the expected rate of nominal depreciation for the United States (versus the United Kingdom)?
g) What do you predict will be the dollar price of one pound a year from now?

Job a3b was ordered by a customer on september 25. during the month of september, jaycee corporation requisitioned $2,400 of direct materials and used $3,900 of direct labor. the job was not finished by the end of the month, but needed an additional $2,900 of direct materials in october and additional direct labor of $6,400 to finish the job. the company applies overhead at the end of each month at a rate of 100% of the direct labor cost. what is the amount of job costs added to work in process inventory during october?

He taylor company sells music systems. each music system costs the company $100 and will be sold to the public for $250. in year one, the company sells 100 gift cards to customers for $250 each ($25,000 in total). these cards are valid for just one year, and company officials expect them to all be redeemed. in year two, only 96 of the cards are returned. what amount of net income does the company report for year two in connection with these cards? a. $15,000b. $15,400c. $15,500d. $15,800

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.