Provide brief intuitive answers to the following questions

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Provide brief intuitive answers to the following questions.
(i) According to the Ramsey model, what is the impact of a "fiscal stimulus" on investment, consumption and output if the stimulus is financed with lump-sum taxes? What if
it is financed with a tax on capital income?
(ii) Chinese households have been enjoying very fast growth in their income—a trend
that is expected to continue for a while. According to consumption smoothing, would you
expect China to run current-account deficits, or current-account surpluses?
(iii) Describe what conditional convergence means in the data? Can both the Solow
and Ramsey models help us explain this feature of the data?
(iv) What are the main empirical and theoretical contributions of the Mankiw, Romer
and Weil's paper? What are the main empirical challenges they faced in their analysis?
(v) Does a consumer with preferences u (c) = c − αc2
save more as his future income
becomes more uncertain?
Question 2 (40% of the grade; you should allocate about 30min.)
Consider the Ramsey model (where savings is endogenous). For simplicity, suppose there
is neither any technological change nor any population growth. However, there is a government that might subsidy savings. Let γ ∈ R denote the subsidy.
Suppose now that the government decides to subsidizes savings, going from a zero
subsidy γlow = 0 to a positive subsidy γhigh > 0. This change is unanticipated but, once it
occurs, it is expected to last for ever. Suppose further that before this change the economy
was resting at the steady state corresponding to zero subsidy.
(i) What is the long-run impact of this change on the steady-state levels of per-hear
capital (k), output (y), and consumption (c) are affected by this change?
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1. Systems development life cycles are crucial to integrate for most, if not all IT based projects. There are various different SDLC models, but all of them essentially accomplish the same task in promoting consitent workflow, progress, and efficiency on IT projects.

In my current work as a software engineer, I work in the agile scrum SDLC model. This is the model that I would also reccomend for GGFRT to follow. In agile, IT projects are divided into ~2 week long sprints, containing meetings at the beginning of the sprint to plan, every day to keep everyone on the same page, and typically a meeting at the end of a sprint to view it retrospectivly. For example, at the organization I work at, we have multiple different projects with multiple different teams working all in conjunction together. The daily meetings keeping everyone of different projects synchronous helps to keep everyone organized and on the same page. This is just one example of why GGFRT should implement the agile scrum work methodology, because as we know GGFRT plans to initiate multiple IT projects at once, so having everyone communicate regularly would help prevent many obstacles along the way.

 

 

 

2. From the research you conducted on the System Development Life Cycle (SDLC) models, identify which model you would recommend for the IT organization at GGFRT?  Relate your choice to one of the strategic objectives of GGFRT and thoroughly explain your answer.  In addition, please discuss potential challenges to the successful implementation of the model.

The SDLC Agile Project Management Model is recommended for GGFRT to adopt; specifically, as it relates to accomplishing their 1st and 3rd strategic objectives.  Both objectives are centered around improving IT systems and customer satisfaction. The Agile Project Management Model aims to incorporate the following principles:

Customer Satisfaction
Collaboration
Reviews at regular intervals
Sustainable development throughout the SDLC
Receptive to change
Independent teams working on all aspects of the project(s).
Technical excellence
Motivation focused
The Agile model promotes a collaborative environment that enables the developer and customers to make efficient decisions quickly and appropriately, (Usman, Ogwuleka 2018).  This model is ideal for GGFRT based on the multiple systems that require development or modifications along with the need for integration across the various systems.  Additionally, some of these systems are designed to support direct customer involvement, with the intent of improving the overall level of service GGFRT can offer its customer base.

Some potential challenges to the successful implementation of the Agile model include potential inexperience of staff, particularly with the programmers, a lack of clarity when it comes to customer expectations, mediocre documentation, and a clear understanding of the level or work and time that will be needed to successfully complete the projects.

 

A buyer earns $48,000 salary per year. In order to qualify for an 85 percent loan, his monthly PITI payment cannot be more than 28 percent of his monthly salary. The annual taxes and insurance will be $2,352.60. If the monthly principal and interest payment is $6.00 per $1,000 of loan amount, what is the most sales price he can afford?

 

 

Apply the Dividend Discount Model (DDM) to analyze the effect of the interest rate on the valuation of shares. We must also make connections to reality, but be aware then that the model is a rough simplification of reality and that the specific figures in the task are made up. I would still like to emphasize that the general points we will make are still the highest relevant to the valuation of shares and the current situation we are in today. This is why that all models for how to value stocks are to some extent about discounting a future cash flow and is affected by interest rates. A small economy in an unknown place in the world has since the beginning of time (year 0) experienced 24 years of declining interest rates and they went from paying about 6% interest on 10-year government securities to to pay as little as 0% interest on 10-year government securities today. The interest rate has fallen gradually by 0.25% every year. Assume that the company Marknaden AB has had a risk premium that has been stable at 6% throughout period and that a dividend of SEK 10 per share was distributed in year 1. The dividend has since grown accordingly expectation of 2% per year, which is also the growth rate expected for all time to come. Assume that the interest rate on 10-year government securities is equal to the risk-free interest rate and calculate the required rate of return to ???? = ???????? + risk premium.

 

i) Valuate Marknaden AB's share for each year from year 0 to year 24 using DDM and plot the value of the stock in a chart. Suppose one at each time has assumed that the prevailing interest rate will be forever.

 

ii) Evaluate Marknaden ABs under two hypothetical scenarios where the interest rate is instead in one the case is still at 2% throughout the period and in the second case is still at 6% throughout period. Plot the values ??according to the two different scenarios in the same diagram as above.

 

a. Comment on the graph you produced according to i) and ii) in general and also specifically discuss the development of the share price given the different interest rates. What is the difference in the share price's percentage growth given the falling interest rate compared to if the interest rate had remained at 6%? Also connect developments in the Swedish stock market over the past 24 years

 

Question:
Please assist with any thoughts on the below items (1 and 2)

 

1. Systems development life cycles are crucial to integrate for most, if not all IT based projects. There are various different SDLC models, but all of them essentially accomplish the same task in promoting consitent workflow, progress, and efficiency on IT projects.

In my current work as a software engineer, I work in the agile scrum SDLC model. This is the model that I would also reccomend for GGFRT to follow. In agile, IT projects are divided into ~2 week long sprints, containing meetings at the beginning of the sprint to plan, every day to keep everyone on the same page, and typically a meeting at the end of a sprint to view it retrospectivly. For example, at the organization I work at, we have multiple different projects with multiple different teams working all in conjunction together. The daily meetings keeping everyone of different projects synchronous helps to keep everyone organized and on the same page. This is just one example of why GGFRT should implement the agile scrum work methodology, because as we know GGFRT plans to initiate multiple IT projects at once, so having everyone communicate regularly would help prevent many obstacles along the way.

 

 

 

2. From the research you conducted on the System Development Life Cycle (SDLC) models, identify which model you would recommend for the IT organization at GGFRT?  Relate your choice to one of the strategic objectives of GGFRT and thoroughly explain your answer.  In addition, please discuss potential challenges to the successful implementation of the model.

The SDLC Agile Project Management Model is recommended for GGFRT to adopt; specifically, as it relates to accomplishing their 1st and 3rd strategic objectives.  Both objectives are centered around improving IT systems and customer satisfaction. The Agile Project Management Model aims to incorporate the following principles:

Customer Satisfaction
Collaboration
Reviews at regular intervals
Sustainable development throughout the SDLC
Receptive to change
Independent teams working on all aspects of the project(s).
Technical excellence
Motivation focused
The Agile model promotes a collaborative environment that enables the developer and customers to make efficient decisions quickly and appropriately, (Usman, Ogwuleka 2018).  This model is ideal for GGFRT based on the multiple systems that require development or modifications along with the need for integration across the various systems.  Additionally, some of these systems are designed to support direct customer involvement, with the intent of improving the overall level of service GGFRT can offer its customer base.

Some potential challenges to the successful implementation of the Agile model include potential inexperience of staff, particularly with the programmers, a lack of clarity when it comes to customer expectations, mediocre documentation, and a clear understanding of the level or work and time that will be needed to successfully complete the projects.