Question 1. What was the size of the federal deficit in FY 2020 (+/- 15%)? I recommend noting the source/date of your response.
Question 2. A state pension fund has invested its money into equities, bonds and other investments. Its “alternative investment” fund (hedge funds, private equity, real estate etc) has the following annual return results:
Year
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
Annual Return
|
4.77%
|
-17.79%
|
12.9%
|
22.89%
|
1.56%
|
12.43%
|
a. What is the growth rate of the pension fund’s alternative investments since 2015?
b. What is the annual growth rate of the investments since 2015? Show your calculations, you do not need to actually compute.
Hint: It may be helpful to consider an initial investment of $100.
Question 3. You and your roommate graduated from the same college and had identical GRE scores. However, you are expected to earn more than her because you have chosen to get a Masters in Public Policy, and you will be paying more taxes in the future. Is this vertically equitable? Horizontally equitable?
Question 4. When governments study potential infrastructure projects, they frequently consider the salvage value of the project at the end of its useful life. For example, a bridge that is about to replaced may have components like metal or concrete that can be sold or used in other projects. This value is known as the
horizon value.
A potential mining project under review has a horizon value of $30 million in 25 years. Should that be part of the decision-making process regarding whether or not to start the project? How would researchers incorporate the information into the present analysis? The discount rate is 3%. If the jurisdiction decides to go ahead with the project, how should they account for the horizon value of the mine?
Question 5. Give a status report of the reconciliation bill related to COVID-19 as of your exam date. What budget process stages were necessary prior to this point to set up the reconciliation bill? Briefly describe why a $15 minimum may not be part of the reconciliation bill but could be included in other legislation passed outside of this process.