Macroeconomics Answers

On the 3 December 2021, the new dawn government and IMF mission to Zambia reached a staff level agreement on a program under the IMF's extended credit facility that envisages provision of financial support of $1.4bn over the next three {3} years

Taking into account the anticipated IMF conditionalities what implications will such an agreement have on the general economic outlook of Zambia?

To what extent do you approve or disapprove such an agreement? [25 marks]

You work in a bank and were planning to spend Saturday going to watch your local football team with your son and daughter. However, your boss has asked you if you would help prepare some important financial data for some new regulations that are being introduced by the government. It is not compulsory to come in over the weekend but it is made clear it would be looked upon favourably. a. If you decide to go to the football match, what is the true cost to you of that decision? [5 marks] b. If you decide to go into work for the weekend to help out your boss, what is the true cost of that decision? 

Forecast the demand for the rice for a country for the year 2021 on the basis of 7-year moving average and least square method, data given in table:

Year 2014 2015 2016 2017 2018 2019 2020

Population (millions) 10 12 15 20 25 30 40

Rice consumed (million tonnes) 40 50 60 70 80 90 100

3. Suppose that, there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm’s total cost is given by the equation TC = 100 + q2 + q where q is the quantity of output produced by the firm. You also know that the market demand for this product is given by the equation P = 1000 – 2Q where Q is the market quantity. In addition you are told that the market supply curve is given by the equation

P = 100 + Q.

i. What is the equilibrium quantity and price in this market given this

Information?

ii. The firm’s MC equation based upon its TC equation is MC = 2q + 1.

Given this information, what is the firm’s profit maximizing level of production, total revenue, total cost and profit at this market equilibrium? Is this a short-run or long-run equilibrium? Explain your answer.

Perfectly Competitive firm faces a market price of birr 40 and has the following

Cost function: STC = 5800+ 20Q+0.02Q2.

A. What quantity of output is best for this firm in the short-run? Why?

B. Should firm attempt to change some price other than the market price of 40? Why or why not?

25. In Year 2020, financial markets reacted to the World Health Organization (WHO) announcement that the pandemic would be long term. Holders of U.S. bonds and U.S. treasuries converted much of the securities to cash in a phenomenon called "Dash For Cash". Without any government intervention or intervention of monetary policy, what are the macroeconomic effects if the economy starts at Less Than Full Employment (LTFE). Assume that the price effect dominates income effects.

On average hours a zambian worker works 40hrs per week given that the amounts of hours dedicated to labour determines the supply of labour .

1.find the average hours a zambian worker works in a year and the amounts they would be paid annually if the average wage was k25 per hour.

Find monthly wage for a zambian?

2. Calculate the total labour supply hours for the whole nation in a year.compare working hours and time spent on leisure activities for the week for one worker only employed.

3. If labour was the only Factor of production .use the income method to calculate the national income for zambia for one week

Forecast the demand for the rice for a country for the year 2021 on the basis of 7-year

moving average and least square method, data given in table:

Year 2014 2015 2016 2017 2018 2019 2020

Population (millions) 10 12 15 20 25 30 40

Rice consumed (million tonnes) 40 50 60 70 80 90 100

. What is free-riding? Why do self-interested players free-ride? Explain via an example.

You are given data for a hypothetical simple closed economy;

C= 250+0.85Y

I= 150

G=200

Where C is consumer expenditure, Y is national income, G is government expenditure on goods and services and I is investment expenditure. All amounts are in K million.

1. Derive a savings function using the information for the hypothetical economy