1. What are two methods Doyle broadly mentioned for measuring outputin the financial sector? What assumptions must be made about theopportunity costs of various participants in the market in order toderive each?

Two methods commonly described by Doyle to measure output in the financial sector are as follows-

Answered: 1. What are two methods Doyle broadly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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What caused the downturn, and eventual dissolution, of Long-Term Capital Management LP.? The 1997 Russian default caused a significant rise in U.S. Treasury Bonds, which LTCM was significantly short selling. O With the fall of the Soviet Union, Russia invested in the U.S. markets and destabilized the economy temporarily. O LTCM did not investments in Russian markets when they defaulted on their debts. OLTCM was lying to investors in an effort to inflate their stocks, which they then used to pay their employees in stock options.
2. Consider an overlapping generations model with a pay-as-you-go pension system. The government collects the contributions from young generation and transfers them to old generation. d is the contribution from a young person to the pension system. b is the benefit received by old person. (a) Derive the following intertemporal budget constraint, b 1 + rt+1 C₁t + St C2t+1 1 + rt+1 (b) Derive the following saving function, 1 ·(wt – d) 2+p = = Wt d + 1+p (2 + p)(1+rt+1) - bl.

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1. What are two methods Doyle broadly mentioned for measuring output in the financial sector? What assumptions must be made about the opportunity costs of various participants in the market in order to derive each?