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Discuss the economic effect of Covid19 on employment, output and inflation in south Africa
Use the information in the table below:
Year Nominal GDP Real GDP
2012 280 290
2013 315 260
2014 305 310
- The increase in nominal GDP between 2012 and 2014 is:
1.1. -3.5 %
1.2. 19.2 %
1.3. 8.93 %
1.4. 6.90 %
2.The increase in real GDP between 2012 and 2014 is:
2.1. 5 %
2.2. 6.90 %
2.3. 7.14 %
2.4. 20 %
Within the classical model, analyze the effects of an increase in the marginal income tax rate. Explain how output, employment, and the price level are affected. Consider cases in which the increased revenue produced by the tax increase results in a decline in bond sales to the public and in which it results in lower money creation.
a) How much will the firm produce?
Define and discuss the following economic tools
a) GDP growth
b) Employment
c) Interest rate
d) Inflation rate
e) Foreign exchange rate
2. How the short run and long run trade_offs are related.
In a cloth market the demand (Qd) for cloth is dependent upon texture (T)or session(S) r supply Qs is depnedent upon the yard( Py) and the price of per meter cloth(Pm)
YP = 1/5( Y + Y-1 + Y-2 + Y-3 + Y-4 ) (P1)
Suppose further that consumption is given by C = .9 YP .
a. If you have earned $20,000 per year for the past 10 years, what is your permanent income?
b. Suppose that next year (period t + 1) you earn $30,000. What is your new YP ?
c. What is your consumption this year and next year?
d. What is your short-run marginal propensity to consume? Long-run MPC ?
e. Assuming you continue to earn $30,000 starting in period t + 1, graph the value of your permanent income in each period, using equation (P1).
Which of the following will cause a rightward shift in aggregate demand?
(i) Expected increase in firm profits.
(ii) A decrease in income tax rates.
(iii) An increase in expected future income.
(iv) A fall in the price level.
Group of answer choices
i and iii.
Only ii and iv.
Only i, ii and iii.
ii and iii.
- Steve can bake either 4 loaves of bread or 12 dozen cookies a day. Sarah can bake either 4 loaves of bread or 4 dozen cookies a day.
- Show the production possibilities frontiers for Steve and Sarah
- Suppose trade is not allowed between Steve and Sarah and as a result, both Steve and
- Sarah spent half a day (12 hours) baking bread and the other half a day baking cookie. Show both the production and consumption bundles for Steve and Sarah on their respective PPFs, when trade is not allowed between Steve and Sarah.
- Show, using production possibility frontiers in (a), that Steve and Sarah would be better off specializing in their baking activities and then trading, rather than baking only for themselves. Be specific and state the production and consumption bundles with trade.
