Macroeconomics Answers

What is gdp

A car manufacturing company produces a car worth $20000. 16000 is car components and 4000 is labour coasts. What is the contribution to GDP?

Avedo is considering signing a contract with Pomas to write a novel, which would be due in one year's time, and the two parties are considering the terms of the contract. Everybody understands that the profits (after expenses but before paying Avedo) of the novel are uncertain, but depend on the effort that Avedo expends, as shown in the table below. High effort would require Avedo to hire a nanny for her toddler, which would cost her $20,000 per year. Avedo and Pomas are both risk-neutral. Pomas cannot observe Avedo's effort level.

Choose correct answer/answers

Avedos effort level Probability of $50,000 in profits Probability of $200,000 in profits 20% Low Effort 80% High Effort 60%

There are 5 workers in an economy.Each worker can make either 4 tins of milk or 3 shirts. output per worker is independent of the number of workers in the same industry.

a)Draw up a society PPF.

b)How many tins of milk could society produce if it was willing to do without shirt.

c)Indicate a point in the diagram that is inefficient production.

d)Why are point outside the PPF not attainable

Explain the implication of Keynesian and Monetarist theories to the Kenyan

economy.

In a model with no government or foreign sector, if saving is defined as

S = - 200 + (0.2)Y , then, what is the number for the multiplier for the model?

The equation Q=a+tP, depicits what?

Choose the correct answer

1)The Tanzi-Oliveira effect of inflation arises because:

a. The public pays more taxes in real terms .

b. There are lags in tax collection.

c. The real value of tax receipts increases. d.Inflation pushes tax payers into higher income tax brackets.

e. Inflation reduces the budget deficit.

2) If the economy unexpectedly went from inflation to deflation,

a. Debtors and creditors would both have reduced real wealth.

b. Debtors and creditors would both have increased real wealth.

c. Debtors and creditors would both have reduced real wealth

d. Debtors would gain at the expense of creditors.

e Creditors would gain at the expense of debtors

3) One of the following is a temporary method of financing budget deficits:

a. Issuance of bonds to the public

b. Sale of government assets

c. issuance of bonds to the central bank d. Borrowing from the banking system

e. Transforming short term bonds to long term bonds

1. Why is the demand curve negatively sloped and not positively sloped? Explain by using the concept of Willingness to Pay (WTP).

Discuss the concept of liquidity trap and outline its implications on the conduct of monetary and fiscal policies