Firm X is able to sell one of its two milling machines now. Both machines perform the same function but differ in age. Machine A could be sold today for $50,000. Its operating costs are 20000 a year, but at the end of five years, the machine will require a $20,000 overhaul. Thereafter, operating costs will $30,000 until the machine is finally sold in year 10 for $7,000. Machine B could be sold today for $25,000. If it is kept, it will need an immediate $20,000 overhaul. Thereafter, operating costs will be $30,000 a year until the machine is finally sold in year 5 for $4,000. Cash flows have been forecasted in real terms. The real cost of capital is 12%. Which machine should firm X sell now

A) plot the m1 and m2 money stock in the us from 1990-2015. (hint: you may use the data tools provided by fred.) (b) plot the nominal interest rate from 1960 to 2014. (hint: you can either use the daily interest rates for selected u.s. treasury, private money market and capital market instruments from or the effective federal funds rate fromfred.) (c) the consumer price index (cpi) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. intuitively, the cpi represents the cost of living or the average price level. plot the cpi from 1960 to 2013.(d) the inflation rate is the yearly percentage change in the average price level. in practice, we usually use the percentage change in the cpi to compute the inflation rate. plot the inflation rate from 1960 to 2013.(e) explain the difference between the ex-ante and ex-post real interest rate. use the fisher equation to compute the ex-post real interest rate. plot the nominal interest rate and the ex-post real interest rate from 1960 to 2013 in the same graph.

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms.a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

Use this image to answer the following question. when the economy is operating at point b, the us congress is most likely to follow