Search & Filtering
Q.1.1 In the circular flow of income and spending: (2) (1) Investment results in a decrease in the volume of the income flow; (2) Savings result in a decrease in the volume of the income flow; (3) Taxes result in an increase in the volume of the income flow; (4) Imports result in an increase in the volume of the income flow.
Automous consumption =100m
Investment spending =100m
Government spending 200milion
Export =150 million
Automous export =100 million
Marginary propensity to consume =1/3
Taxes rate is 1/10
Marginary propensity to import 1/10
YF=2150 million
Questions 1.1 culculate the level of Automous spending in the country
1.2calculate the size of multiplier
1.2 calculate equilibrium level of the income
Distinguish between active balances and passive balances and mention the main (6)
determinant of each.
Distinguish between active balances and passive balances and mention the main determinant of each. (6)
Explain how South African Reserve bank can accommodate policy to keep inflation under control and in this way meet its inflation targets
Distinguish between active balances and passive balances and mention the main determinant of each.
Robinson Crusoe produces upper-loop product of $1000. He pays $750 in wages, $125 in interest, and $75 in rent. What must his profi t be? If three-fourths of Crusoe’s output is consumed and the rest invested, calculate Crusoeland’s GDP with both the product and the income approaches and show that they must agree exactly.
Please help. I am so confused with all the equations.
Consider an open economy with S = 0.2Y, M = 0.15Y, T = 0.15Y, where S is the savings function, M is the induced imports and T is the tax function.
Further assume the following autonomous components: C0 = 450, G = 950, I = 500; M = 0; and X = 1 000.
3.1.1 Calculate the open economy multiplier. (3)
3.1.2 Calculate the equilibrium income. (2)
3.1.3 Calculate the value of savings. (3)
3.1.4 Calculate the value of net exports, and comment on the external position of the economy based on your answer.(2)
These are my answers, please let me know if I am on the right track:
3.1 Open economy multiplier = 1 / MPS + MPM + MPT
= 1 / 0.2 + 0.15 + 0.15 = 1 / 0.5
= 2
3.2 Y = C + I + G + (X – M)
Y = 450 + 500 + 950 + 1000
Y = 2900
3.3 S = 0.2Y
= 0.2 (2900)
= 580
3.4 Net exports = (X-M) = 1000
The country exports more goods than it imports and therefore has a trade surplus.
Across the entire economy it is expected that inflation will rise. The result will be the _____ curve will shift _____.
A. AD; rightward
B. SRAS; upward
C. SRAS; downward
D. AD; until it becomes vertical
At a specific inflation level people from other countries are more willing to buy goods and services from the U.S. As a result, the _____ will shift _____.
A. aggregate demand curve; right
B. short-run aggregate supply line; downward
C. aggregate demand curve; left
D. short-run aggregate supply line; upward
