Macroeconomics Answers

What components of GDP (if any) would each of the following transactions affect? Explain.

a. Kantanka automobile sells a car from its inventory.

b. family buys a new refrigerator from US.

c. Aunt Jane buys a new house.

d. You buy fish and chips.

e. The government resurfaces University Road.

f. Kantanka builds an assembly plant in Accra.

g. Your parents buy a bottle of French wine.

h. Kofi buys wood, which is used to produce tables

i. Ama a Ghanaian national buys a new hotel in the UK.

EXPLAIN THE DETERMINATION OF EQUILIBRIUM GDP IN A FOUR SECTOR ECONOMY WHERE GOVT SPENDING AND TRANSFER PAYMENTS ARE AUTONOMOUS

AND TAXES AND IMPORTS ARE PROPORTIONAL TO INCOME

) Discuss the differences that exist between quotas and Volunteer Export Restraints (10 Marks)

c) Sate and explain the different types of dumping (9 Marks)

How does the government promote secondary industries?

The elasticity coefficient calculated at a point on a demand curve is known as what?

Draw and explain an aggregate demand and supply diagram to illustrate the fact that the economy is experiencing a capacity constraint.

Initially, real interest rates in the United States, England, and Japan are all equal, at 5 percent. Then the central banks alter their policies, so that the American interest rate rises to 6 percent, the Japanese rate falls to 4 percent, and the British rate stays at 5 percent.

            a)   How would you predict that capital flows among the three countries would change?

            b)   Using supply and demand curves, show how the exchange rates are likely to change.

            c)   How do you expect the balance of trade in the three countries to change?

𝑄! =1000−𝑌×𝑝

Assume the marginal cost of the only firm supplying this market as 𝑀𝐶 = 𝑄/2.

a. Derive an expression of elasticity of demand in terms of Y. Show your work.

1. Derive an expression for the slope of the isoprofit curve of this firm in terms of Y. Explain.
2. Now derive an expression for the markup chosen by this firm in terms of Y.
3. What happens to the elasticity (part a) and the markup (part c) if Y goes up? What
4. can you say about the relationship between elasticity and the markup from this
5. observation? Explain.
6. Calculate the profit maximizing quantity and price for the monopolist. What is the
7. maximized profit? Assume fixed cost is 0.

Company A is the only supplier of glass in Big Apple City used for tall buildings’ exteriors. Its marginal cost of production is cA=1, and it has no other production costs. The demand for such glass in Big Apple city is QD=2-P. Company B in Jersey City produces the same glass and is considering whether to expand to Big Apple city. If it enters, it needs to get a permit to allow it to be a supplier in the Big-Apple city at a cost of L=0.5, which does not vary with quantity of output, and its marginal cost of production is cB=0.5. If it expands to the Big-Apple city, companies A and B both supply to the market, and the market price P satisfies QA+QB=2-P, where QA is company A’s production level and QB is company B’s

If company B expands to the Big-Apple city, what is the resulting price in a Nash equilibrium?

why does an equal increase in autonommous government spending and autonomouse taxes raise national output