Suppose we have the following real estate speculation scenar…
Suppose we have the following real estate speculation scenario for a 1 year investment: Purchase price of house: $170,000 Equity: $120,000 Debt: $50,000 @10% interest Interest Payments: $5,000 What is the leverage ratio in this scenario? Suppose that real estate prices are increasing. All else being equal, what would happen if the leverage ratio increased?
Read DetailsSuppose we have the following information for 2010: Potentia…
Suppose we have the following information for 2010: Potential output: $8 trillion Actual output: $6 trillion Actual Deficit: $ 400 billion Tax Rate: 15% What is the structural deficit in 2010? What could be causing the structural deficit?
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