Macroeconomics Answers

Why price and wages are fixed or remain constant or sticky in Keynesian cross model ????

If you were studying the following relationships, which variable would be exogenous and which would be endogenous?

a. The effect of investment growth on the growth rate of GDP.

b. The relationship between the amount of sunshine and plant growth.

c. The relationship between hours of studying and GPA.

2. The table below shows the output and the total cost of a firm producing wireless

earphones. The firm charges MYR 13 per unit of output. Use this table to answer the

questions which follow. (Show your workings.)

Output

(units)

0 1,000 2,000 3,000 4,000 5,000 6,000

Total

Cost

5,000 13,000 18,000 24,000 32,000 45,000 60,000

i. Calculate the fixed cost and the variable cost when output is 3,000

units.

ii. Calculate the average variable cost when output is 5,000 units.

iii. Calculate total profit if 4,000 units are sold.

iv. Using the data in the table above, draw one graph showing the average

cost and the marginal cost of the firm, labelling them AC and MC.

(f) With the aid of a well labelled diagram, carefully explain the impact on the

money market if there was a discovery of gold that fuels inflation. (5 marks

what is a multiplier

1. Below is a production possibilities table for consumer goods (automobiles) and capital

goods(forklifts):

Type of Production Production Alternatives

A B C D E

Automobiles

Forklifts

30

2

27

4

21

6

12

8

a. Show these

data

graphically.

Upon what

specific assumptions is this production possibilities curve based?

b. If the economy is at point C, what is the cost of one more automobile? Of one more

forklift? Explain how the production possibilities curve reflects the law of increasing

opportunity costs.

c. If the economy characterized by this production possibilities table and curve were

producing 3 automobiles and 20 fork lifts, what could you conclude about its use of

available resources?

d. What would production at a point outside the production possibilities curve indicate?

What must occur before the economy can attain such a level of production?

Suppose that 20,000 of the employed switches to jobs in the underground

economy. When interviewed by STATIN, 50% of these switchers report that they

are not working and not seeking work, while the other 50% report that they are

not working but seeking work. Explain what happens to the official

unemployment rate and the “true” unemployment rate. (2 marks)

can redistribution occur during inflation?

Why are million of people unemployement

The inflation rate is...