Macroeconomics Answers

A new office building was constructed 5 years ago by a consulting engineering firm. At that time the firm obtained a bank loan for $100,000 with a 12% annual interest rate, compounded quarterly. The terms of the loan call for equal quarterly payments to repay the loan in 10 years. The loan also allows for its prepayment at any time without penalty. As a result of internal changes in the firm, it is now proposed to refinance the loan through an insurance company. The new loan would be for a 20-year term with an interest rate of 8% per year, compounded quarterly. The new equal quarterly payments would repay the loan in the 20-year period~ The insurance company requires the payment of a 5% loan initiation charge (often described as a "5-point loan fee"), - which will be added to the new loan.

(b) What is the difference between the equal quar terly payments on the present bank loan and the proposed insurance company loan?

Which one of the following statements regarding taxation is correct?

A. Administrative simplicity in the tax system ensures neutrality and equality.

B. The aim of taxes is to distort relative prices and change the behaviour of taxpayers.

C. In a good tax system, various taxpayers with different income are taxed the same.

D. Taxes which induce taxpayers to change their behaviour are not neutral.

What are the four external factors of macro environment?

Suppose the government implements a price ceiling of $20/unit in this market.  Is this price ceiling binding on the market?

QS = QD

100 - 2(P - 20) = -20 + P

160 = 4P

P = 40

Therefore QD = -20 + 2(40) = 60 units

1. What is the value of the economic surplus that would be generated in the original equilibrium? Is there a deadweight loss due to the price ceiling policy, and if so, what is its value? Briefly explain. 

Effects of Covid19 on output in south Africa

Which one of the following is correct regarding contractionary fiscal policy in the Keynesian model? It will…

• A. decrease the equilibrium level of income.
• B. increase government spending and aggregate spending.
• C. decrease investment and government spending.
• D. decrease inventories.

Please respond to each of the following. Be sure to make full use of graphs, and equations where applicable.

Question 1

Describe the reaction of MPK and full employment if the following events occur in the Bahamas.

a. The deportation of all illegal migrants from around the Bahamas.

b. The Moody’s report on direct foreign investment and consumer confidence.

c. The implementation of payment for the travel visa and Covid-19 testing

Question 2.

The FNM government prior to the 2021 general election, introduced a school lunch program that covered all public-school children. Assume that this program is temporary and only lasted eight months. For a constant level of output, what impact would this program have on desire consumption and desire national saving

An increase in taxation in the Keynesian model with a government sector …

• A. increases the equilibrium level of income.
• B. reduces autonomous spending.
• C. increases the multiplier.
• D. reduces the multiplier.

the upward movement from A to A' in a graph can result from