Macroeconomics Answers

You have recently received a report from the Chief Finance Officer (CFO) indicating that the price elasticity of demand for the electronic equipment is 1. 6. Advise the CFO on what the figure 1.6 means and explain the relationship between price elasticity of demand and total revenue. (Use relevant diagrams to explain your answer)

Using market supply and market demand curves describe how the market will react to the introduction of statutory minimum wage

1. The Bahamas has experienced several adverse supply shocks in the past that has challenged the stability of the economy, however, much of this downturn was mitigated by government intervention. This approach runs contrary to the classical remedy. Evaluate the government’s efforts to reduce the impact of these adverse shocks (use specific examples). 

How would the purchase of bonds by the central bank from local banks be likely to affect

interest rates? How about the effect on interest rates of the sale of bonds? Explain.

The GOP deflator in Econoland is 200 on January 1, 2005. The deflator rises to 242 by January 1, 2007, and to 266.2 by January 1, 2008. n. What is the annual rate of inflation over the two-year period between January 1, 2005, and January 1, 2007?In other words, what constant yearly rate of infla- tion would lead to the price rise observed over those two years? b. What is the annual rate of inflation over the three- year period from January 1, 2005, to January 1, 2008? c. In general, if Po is the price level at the beginning of an n-year period, and P" is the price level at the end of that period, show that the annual rate of inflation It over that period satisfies the equation (1 + It)'' = P,/Po.