Macroeconomics Answers

Consider the following Cobb Douglas Production Function:

Y =√K √N

Compute output when K = 49 and N = 81.

short notes on Non-Bank Financial Institutions (NBFI) (Hint: discuss the various NBFIs and their role in the economy)

Using relevant macro-economic model provide policy advise for a country experiencing current account deficit

If the market price is 30,inverse market demand is specified by P=120-0.18Q,the industry supply is consistent with P=10+0.04Q,what is the consumer surplus?

why do economy use real GDP rether than nominal GDP to gauge economic well being

1. Imagine that the banking system received additional deposits of $100 million and that all the individual banks wish to retain their current liquidity ratio of 20%.
2. How much of the$100 Million will banks choose to lend out initially? (2mks)
3. What will happen to banks liabilities when the money that is lent out is spent and the recipients of it deposit it in their bank accounts? (2mks)
4. How much of these latest deposits will be lent out by the banks? (2mks)
5. By how much will total deposits eventually have risen, assuming that none of the additional liquidity is held outside the banking sector? (2mks)
6. How much of these extra total deposits are matched by (i) liquid assets; (ii) illiquid assets? (2mks)
7. What is the size of the bank multiplier? (3ms)
8. If one-half of any additional liquidity is held outside the banking sector, by how much less will deposits have risen compared with (d) above? (5mks)

Gross domestic product?

In November, the interest on reserves was 0.15% or 15 basis points, and the discount rate was 25 basis points. If the equilibrium federal funds rate was 10 basis points, what interest rate would prevail in the federal funds market between banks?