Macroeconomics Answers

Construct a Laspeyres Price Index (show working) for 2018, 2019 and 2020 from the following sales data, using 2018 as the base year. YEAR Commodity 2018 2019 2020 Quantity Price Quantity Price Quantity Price Cassava 15 20 16 40 45 Maize 20 80 22 82 24 90 Cocoa 10 60 20 75 30 70

Cd=360-200r+0.1Y
I'd=120-400r
G=120 find an equation for desired national saving ,Sd in term of output Y and the reason . what value of the real interest rate clear the goods market Y=550 and when Y=650 ? Use the goods market equilibrium condition to derive the IS curve graph

2) Discuss the reason Why the aggregate demand curve will thus slope downwards

3) Cd=200+0.5Y-500r
I'd= 200-500r
L=0.5Y-250(r+à ƒ ƒ ƒ  €)
à ƒ ƒ ƒ  €=0
G=150
M=4900
Y=100
Derive the equilibrium levels of the real interest rates r, desired consumption Cp,desired investment Io ,and the price level p, L is money demand equation and M is money supply equation

2. What is a Macroeconomic Policy Instrument? Describe four macroeconomic policies of the Ghanaian economy.

3. Distinguish carefully between Marginal Propensity to Consume and Marginal
propensity to Save.

Question #93290
Suppose that the public taste changes in such a way that leisure comes to more desirable than commodities How do you expect such a change to affect output, employment and real wages in the classical model?

7. After the reunifi cation of Germany in 1990, payments to rebuild the East led to a major expansion of aggregate demand in Germany. The German central bank responded by slowing money growth and raising German real interest rates. Trace through why this German monetary tightening would be expected to lead to a depreciation of the dollar. Explain why such a depreciation would stimulate economic activity in the United States. Also explain why European countries that had pegged their currencies to the German mark would fi nd themselves plunged into recessions as German interest rates rose and pulled other European rates up with them.

5. In his memoirs, Alan Greenspan wrote, à ƒ ƒ ¢ € œI regret to saybthat Federal Reserve independence is not set in stone.
FOMC discretion is granted by statute and can be withdrawn by statute.à ƒ ƒ ¢ €  (The Age of Turbulence, p. 478 f.) Explain why the independence of a central bank might affect the way in which monetary policy is conducted. If a central bank is not independent, how might its monetary policies change in response to electoral
pressures? Would you recommend that a new country have an independent central bank? Explain.