Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Answer all the given problems:

problem 1:

a) If you woke up in the working and found that nominal GDP has doubled overnight, what statistic would you require checking before you start to celebrate: Why?

b) Why do the economists use real GDP instead of nominal GDP to gauge economic well-being?

c) Describe critically GDP as a measure of the economic welfare.

problem 2: How each of the given events is likely to influence GDP?

a) Environmental laws prohibit the firms from emitting pollution.

b) Strikes by trade unions.

c) Discovery of new seed raises farm harvest.

problem 3: Siankanga, a farmer grows a bushel of wheat and sells it to a miller for K 1.00. The miller turns the wheat into flour and then sells the flour to a baker for K 3.00. The baker uses the flour to make bread and sells the bread to households for K 6.00. The households eat the bread. Find out the value added in each phases of production? What do you mean by GDP?

problem 4: Construct a model of loanable funds market in a closed economy.

a) Describe the effect of an increase in the Government Budget Deficit on the rate of interest and the level of private investment. Recognize the crowding out effect in this context.

b) Assume that investment is perfectly interest inelastic. Describe the crowding out effect for an increase in the govt. budget deficit.

c) If saving is perfectly inelastic then what will be the crowding out effect for a raise in the government budget deficit.

problem 5: Define the term velocity of money. Describe the role of velocity of money in the quantity theory of money.

b) ATM card raises the velocity of money; True or false. Validate.

problem 6: Describe the process of credit creation by the commercial banks. Describe in this context the statement that an individual bank has little capability to expand the money supply unless all the other banks expand in step’.

problem 7: The total value of loan in an economy is K400 million and the reserve ratio is 20 %. A raise of K15 million in the money which the public keeps in commercial banks altogether with a raise of the reserve ratio to 25 % will raise the total amount of loans by K50 million. True or false? Describe.

problem 8: By using Simple Keynesian Model, describe the effect of the given:

a) A raise in government expenses.

b) A reduction in lump sum taxes.

In this context compare the government expenditure multiplier with tax multiplier.

problem 9: Assume that the economy is characterized by the given structural equations:

C = 160 + 0.6 (4 –T)

I =150; G = 150; T = 100.

a) Find out the equilibrium output level.

b) If G increases to 200, what is the equilibrium level of output? Determine the value of the government expenditure multiplier?

c) If tax drops to 50, by how much will equilibrium output increase? Determine the value of tax multiplier?

problem 10: In mainstream economics, it is argued that firms invest more when interest rates drop as it lowers their cost of financing. Keynes, though, argues something a little different. He says, ‘A fall in the rate of interest stimulates the production of capital goods not because it reduces their costs of production however as it raises their demand price’. How is this so?

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M96638

Have any Question? 


Related Questions in Macroeconomics

Assignment1 what is a bank how does a bank differ from most

Assignment 1. What is a bank? How does a bank differ from most other financial-service providers? 2. Under U.S. law what must a corporation do to qualify and be regulated as a commercial bank? 3. Why are some banks reach ...

Examine our trade policies as they relate to other

Examine our trade policies as they relate to other countries that we normally trade with. Do we have a most favored nation status with any of these countries? Discuss the advantages of trade agreements and free trade are ...

Gains from tradeconsider two neighboring island countries

Gains from trade Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per month that they can use to produce jeans, corn, or a combination of both. The fol ...

Macroeconomic paperthe world bank is currently advising

Macroeconomic paper The World Bank is currently advising newly industrialized countries on how to encourage growth and they have asked for your help. • Using the Internet, library, or other resources, research and briefl ...

What is meant by a case when we do case studies we have to

What is meant by a case? When we do case studies, we have to figure out what is the case and what is X a case of? This concept is the heart at differentiating all other methods to a case study.

Portfolio project schoologycurrent implementation and

Portfolio Project Schoology Current Implementation and Concerns: Parent domain (kris.local) and child domain (corp.kris.local) for the organization's AD infrastructure are running on Server 2008. The following are concer ...

Choose any one product that you hold an inelastic demand

Choose any one product that YOU hold an inelastic demand and any one product that YOU hold an elastic demand. Explain your reasoning to why your elasticity differs. Why may someone else hold a completely different elasti ...

Explain each of the four elements on gdp from the

Explain each of the four elements on GDP from the expenditure approach. Include in your discussion what determines each and which is the largest. Your answer to this question should be about 500 words.

1 evaluate the following statement using economic reasoning

1. Evaluate the following statement using economic reasoning: "A monopolist can charge whatever she wants because she is the only source available." 2. Identify and describe a real world example of an oligopoly. What cha ...

The gross domestic product gdp in a fultonland in 2012 is 8

The gross domestic product (GDP) in a Fultonland in 2012 is $8 billion. The income received in 2012 by Fultonland  residents from investment in Kingsland is $1 billion. The income received in 2012 by Kingsland residents ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate