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a. If Jamie decides to embark on her new venture, what will her accounting cost be during the first year of operation? Her implicit costs? Her opportunity cost?
b. Suppose that Jamie’s estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn positive accounting profits? positive economic profit?
The slope of the AE curve is .80. What is the multiplier? Everything else the same, by how much does equilibrium aggregate expenditure increase if
a) exports increase from $1.75 trillion to $2.25 trillion. (8 marks)
b) government expenditure on goods and services decrease from $2.0 trillion to $1.8 trillion. (6 marks)
c) investment increases from $1.2 trillion to $2.3 trillion. (6 marks)
a. Calculate the rate of capital gain or loss on a ten-year zero-coupon bond for which the
Interest rate has increased from 10% to 20%. The bond has a face value of $1,000.
{10 Marks)
b. Why have financial intermediaries become so important in the economy? Do you think
they will survive in their present form? {10 Marks
to 5% of total output of the economy, that is of GDP) , then how can it 'finance the
deficit' and what might be the consequences for the economy in general?
which has since moved up to 15.5% as of may 2016.
a. What is the purpose of the monetary policy rate and what factors are considered in its
determination? (10 Marks)
b. Discuss the reasons for the introduction of the policy rate, highlighting both the merits
and demerits of this measure. (10 marks)
c. What is the significance of the policy rate in relation to other monetary policy
measures? (10 Marks)
d. Discuss the implications of the increase in the policy rate from 9.0 to 15.5 % on the
financial market and on the Zambian economy in general. What factors may have
prompted the increase and what is the likely direction of the movements in the rate
going into the second half
of 2016? What factors are likely to weigh on the movements?
The slope of the AE curve is .80. What is the multiplier? Everything else the same, by how much does equilibrium aggregate expenditure increase if
- a) exports increase from $1.75 trillion to $2.25 trillion. (8 marks)
- b) government expenditure on goods and services decrease from $2.0 trillion to $1.8 trillion.
- (6 marks)
- c) investment increases from $1.2 trillion to $2.3 trillion. (6 marks)
Critically evaluate“ the macroeconomics of MMT is a restatement of elementary well-understood Keynesian macroeconomics”
How the Phillips Curve model (and associated diagram) could be modified to take account of shifts in the relationship over time?
