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

Discuss the circumstances whereby fiscal expansion leads to

Discuss the circumstances whereby fiscal expansion leads to full-crowding out.

When the money supply increases it could lead to various

When the money supply increases, it could lead to various effects upon the demand for and supply of loanable funds, and thus the market interest rate. Which effect is consistent with an  increase  in demand for loanable ...

This question concerns labor mobility between countries a

This question concerns labor mobility between countries A and B. a. Say that country A's MPL = -L + 10 and country B's MPL = 2L + 1. What would be the optimal amount of L? Note: country B's MPL is written in terms of the ...

Suppose the inverse demand is given p75-05q if the

Suppose the inverse demand is given P=75-0.5Q if the incumbent continues to produce 20 units output, which of the following equations best summarizes the potential entrants residual demand curve?

Let the exchange rate be defined as the number of dollars

Let the exchange rate be defined as the number of dollars per Japanese yen. Assume there is an increase in U.S. interest rates relative to that of Japan. (Part A) Would this event cause the demand for the dollar to incre ...

1 assume that market demand is qd 1500-2p a if marginal

1) Assume that market demand is Qd= 1500-2P A. If marginal cost equals $250 per unit and there are no other costs, what is the profit maximizing output and price for a single-price monopolist? 2)  Assume a monopolist fac ...

In times of a struggling economic situation determine the

In times of a struggling economic situation, determine the key steps that the Federal Reserve should take to help stabilize the economy. Next, explain how your proposed steps will affect money supply, interest rates, inf ...

Analysis of monetary policyhow supply of money influences

Analysis of Monetary Policy How supply of money influences interest rates (p. 366-67). II. Quantity of Money that People Desire to Hold Give factors that have an influence - there are three of them (pp. 364-5) III. Tools ...

Economic essaylate papers will get a penalty of 2pts per

ECONOMIC ESSAY Late papers will get a penalty of 2pts per day During the last part of the course, we have read two chapters from the book titled: Why nations fail. On Chapter 2 - Theories that don't work- the authors pre ...

Economic analysis of public policy problem set1 an op-ed

Economic Analysis of Public Policy Problem Set 1. An Op-Ed article by Martin Schmidt published in the New York Times on October 19th 2006 argued in favor of a tax on drive-through food orders as a method for reducing obe ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro