Macroeconomics Answers

Indicate whether the following statements are true or false and provide a reason for each answer:

1. The public interest or collective view of the role of the state recognises the supremacy of the individual and his or her freedom of choice.
2. Technical efficiency or X-efficiency is an insufficient measure of economic efficiency.
3. Government provision of public goods will ensure an optional provision of these goods.
4. A natural monopoly may be more efficient owing to the nature of its average cost.
5. South Africa's spending on education is already high and exceeds the world's average.
6. The Gini coefficient is used to draw the Lorenz curve and shows eqaul distribution of income.

Government expenditure has increased dramatically over the last two decades from an average of 24.1% of GDP for the period 1960-1969 to an average of 39.8% of GDP for the period 2008-2017. Discuss the unbalanced productivity growth theory to explain the growth of goverment expenditure. [15]

Review on agricultural sector and economic growth in Nigeria from 1960 to 2020

Solution to a project topic on “Agricultural sector and economic growth in Nigeria” covering chapter one to five

1

Using diagrams, show the effects of each of the following on short-run equilibrium, explaining what happens to the equilibrium price

level, output and unemployment.

a

The price of oil (an important input in production) increases.

b

Firms are pessimistic about the future of the economy

e

Below-zero temperatures destroy agricultural output.

d

The government lowers taxes on firms' profits.

e

There is a large rise in stock market prices.

f

The government eliminates subsidies on agricultural products.

g

A war destroys a portiolpof an economy's physical capital.

h

Consumer confidence improves.

Suppose that an economy is in a recession, and assume that the IS curve is relatively steep while the LM is relatively flat. If you were to advise policymakers on which action to take to overcome the recession, what would be your recommendation? Show the results graphically with an explanation.