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- Which of the following is a final good or service?
- A. A haircut paid for by a student.
- B. Fertiliser purchased by a farm supplier.
- C. Motor vehicle windows purchased by a motor assembly plant.
- D. Diesel fuel bought for a delivery truck
A farm grows wheat and produces pork. The marginal cost of producing each of these products increases as more of it is produced. Is the farm more efficient with the new technology than ot was with the old one? Why?
Explain, with the aid of a graph, the demand-pull inflation as a cause of inflation
In a keynesian model it is assumed that the consumption function is given by C= 2000 + 0.75 (Y-T) and the planned investment is 1,000 government purchases and taxes are both of those and formulate and draw a graph of planned expenditure as a function of income
What is the equilibrium level in the part above
If the government purchases increased by 1250 what is the equilibrium income
With the aid of a algebra prove that a balanced budget multiplier is always equals to 1
Sup suppose the level of autonomous investment in an economy is 2,000 shillings and the consumption function is c=800 +0.25Y find the equilibrium levels
What will be the increase in national income if the investment increases by 250
Suppose that the level of planned investment is to the ceilings and the saving function is given by S=-800 + 0.25Y ,find the equilibrium levels of income
Suppose the consumption function is given by C=200+0.2Y ,find the equilibrium levels of income
With is a graph discuss the ranges of the aggregate supply curve
The following equations describe an economy. (Think of C, I, G, etc as being measured in billions and I as a percentage; a 5 percent interest rate implies i = 5.)
C = 0.8(1 – t)Y
t = 0.25
I = 900 – 50i
G = 800
Md/P = 0.25Y – 62.5i
Ms/P = 500
a) Derive the equations that describes the IS and LM curves?
b) What is the equilibrium level of income and interest rate?
Q.1.1 Explain, using the AD-AS model, the effect of an increase in investment in the macroeconomy on the equilibrium price level and the equilibrium level of output.
1.20 Although government intervention in an economy is sometimes justified, governments may still fail when they intervene. Government failure occurs because: (2) (1) Politicians often make decisions that win votes in the short term rather than making decisions that maximise long term economic prosperity; (2) Government organisations are largely bureaucratic and, as such are not subject to competition or under pressure to maximise profits; (3) Both statements (1) and (2) are correct; (4) Neither statement a nor b is correct.
Which one of the following statements about the simple Keynesian (2) macroeconomic model is correct?
(1) Supply creates its own demand;
(2) Equilibrium can occur at any level of income, not only the full-
employment level;
(3) The model can be used to study inflation; (4) Wages and prices are variable.
Q.1.18 The implementation lag is ___________ for monetary policy and _____________ for fiscal policy. (2) (1) Extremely short; long; (2) Long; extremely short; (3) Long; long; (4) Long; short. Q.1.19 Creditors and debtors tend to lose during an inflationary period since: (2) (1) The nominal interest rate on their credit tends to fall; (2) The real value of their credit tends to decrease; (3) Debtors pay more in real terms; (4) The real interest rate on their credit remains constant.
