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1. Define carefully what is meant by equilibrium in the multiplier model. For each of the following, state why the situation is not an equilibrium. Also describe how the economy would react to each of the situations to restore equilibrium.
a) In Table 22-2, GDP is $3300 billion
b) In Figure 22-7, actual investment is zero and output is at M.
c) Car dealers find that their inventories of new cars are rising unexpectedly
the market for juice is represented by the following functions Q+1/3p= 36, Q+9=1/2p where p= price Q = quantity.
i. identify the demand and supply functions, giving reasons in each case
ii. determine the equilibrium price and quantity
iii. calculate the price elasticity of demand for juice, when its price changes from shs. 30 to shs. 36
given the following equation U=√X1 X2,. what would be the total effect of a price change when the price of one good reduces by 10% from shs. 30. the income of the consumer is shs. 6000 per month while the price of the good two is 40
The estimated regression of Y on X1, X2, and X3 using a sample of 30 observations,
gave the following results:
Yt = 2.4 + 3.9X1 + 0.65X2 – 1.46X3
(1.0)
(1.50 (0.40) (0.61)
Adjusted R2 = 0.67
Figures in parenthesis are standard errors of estimates.
a) Asses the statistical quality of the model.
In a country for the year 2019, the minimum consumption level is Rs. 200 and the MPC is .80, the investment is Rs. 250 crores while Government expenditure is Rs. 200 crores. The Government is imposing tax at the rate of 10% of income. Find the equilibrium level of income in the economy and also the amount of consumption, saving and taxes.
Write a detailed note on management of fiscal federalism in Nigeria
Covid-19 has devasted the world. Discuss how Covid-19 has devastated your economy. What are some of the macroeconomic policy responses to the Covid-19 crisis?
Early last year Fijian Government closed its boarders. Curfew hours and containment zones were introduced to stop the spread of Covid 19 disease. Major hotels, shops and connected sectors were closed and as a result many individuals were out of employment. This business remained closed till to date.
As Macroeconomics student, Discuss the economic impact of Covid-19 on your economy and provide 5 macroeconomics policy responses to Covid-19 crisis?
Now suppose that banking services in year 2 are not the same as banking services in year 1 because
they include internet banking, which year 1 banking services didn’t include. The technology for
internet banking was available in year 1 but the price of banking services with internet banking in
year 1 was $13 and no one chose that package. However, in year 2 the price of banking services
with internet banking was $12 and everyone chose to have that package in year 2 (that is, in year 2
no one chose to have the year 1 banking services package without internet banking).
e. Using year 1 prices, what is real GDP for year 2? What is the growth rate of real GDP?
f. What is the rate of inflation using the GDP deflator?
g. What is the labour productivity growth between year 1 and year 2 for the whole economy?
Suppose that there are only two goods produced in the economy, Call center services and banking services. Prices (P), quantities (Q) and the number of workers (W) occupied in the production of each good for year 1 and year 2 are given by the following table :
Year 1
Year 2
Two
P1
Q1
W1
P2
Q2
W2
products
Call cen
tre
10
10
0
50
12
10
0
50
Banking
10
20
0
50
12
23
0
60
a. What is nominal GDP in each year?
b. Using year 1 prices, what is real GDP in year 2? What is the growth rate of real gdp
c. What is the rate of inflation using the GDP deflator?
d. Using year 1 prices, what is real GDP per worker in year 1 and year 2? What is labour productivity growth between year 1 and year 2 for the whole economy?
