Macroeconomics Answers

Country A and country B both have the production function Y = F(K, L) = K1/2L1/2.

Does this production function have constant returns to scale? Explain.

What is the per-worker production function, y = f(k)? [Hint: use the solow model]  

Consider the following IS–LM model: C = 150 + 1/2YD T = 300 G = 300 I = 150 + 1/3Y − 10 000ρ ρ = i + x (M/P) d = 2Y − 20 000i M/P = 2600 a. Imagine the external finance premium (x) is zero. Derive the IS relation. b. Derive the LM relation. c. Solve for the equilibrium real output and interest rate. d. What is the cost of bank loans and the equilibrium level of investment? e. Now suppose that firms’ capital drops following a severe slump in stock prices and banks charge an external finance premium (x) on loans to firms equal to 0.5%

Suppose that the production function is given by 𝑦=0.5√𝐾√𝐿

a) Derive the steady-state levels of output per worker and capital per worker in terms of the saving rate, s, and the depreciation rate, δ.

b) Derive the equation for steady-state output per worker and steady-state consumption per worker in terms of s and δ.

A forex trader from Mumbai collects the below information regarding the exchange rate between INR and USD:

Bid Price: INR / USD = 74.2400

Ask Price: INR / USD = 74.2500

If the bid and ask rate for USD-EUR are available as USD 1.16776-1.16782/EUR, what would be the bid-ask rates for INR/EUR, using the cross-rate method

"\\Delta" Y = - c (T ₂ - T ₁) - (M ₂ - M ₁)

May i know what is the -c ?

Question:

 For the data given below;

Years Price of Apples

 (in $) Quantity of Apples

 (in $) Price of Bananas (in $) Quantity of Bananas 

(in $) Prices of Mangoes (in $) Quantity of Mangoes 

(in $)

2010 4 80 5 100 10 200

2011 5 100 6 120 11 220

2012 6 120 7 140 14 280

2013 7 140 8 160 16 320

Find out:

Cost of CPI Basket 

Consumer Price Indices (CPI) for each year considering the year 2010 as base year

Inflation rate for each year

What do you mean by demand pull and cost push inflation. 

Jacky has obtained some information related to national income accounts from published reports. However, Jacky was confused by the massive information obtained and had encountered difficulties in answering his tutorial questions. To assist Jacky, calculate the following economic indicators by demonstrating clearly the formulas and steps

Population

per capita GDP (market price)

GDP deflator

Factor income from abroad

Transfer payment to individuals

Interest payment to individuals

Contribution to EPF

Contribution to SOSCO

Corporate profit taxes

Personal income tax

Indirect taxes

Corporate dividend payment

Net exports of goods and service

Net factor payment to abroad

Undistributed corporate profits

Public final consumption expenditure

Private final consumption expenditure

Public gross fixed capital formation

Private gross fixed capital formation

A) Changes in inventories?

B) GDP (market price)

C) National income

D) Personal income

Suppose Congress had chosen to both increase government

spending and raise taxes by the same amount in

2009. What increase in government spending and taxes

would have been required to prevent the decline in output

in 2009?

What kinds of market failures are present in the economic self-discovery framework, and how may they be overcome?

Last month sellers of good Y took in $100 in total revenue on sales of 50 units