Macroeconomics Answers

A small open economy can be described as follows: Y=C+ I + G + NX, Y = 5 000,

G = 1 000, T = 1 000, C = 250 + 0.75(Y - T), I = 1 000 - 50*r, NX = 500 - 500*€, r

=r* = 5 %.

a) Estimate the total national saving, investment, the trade balance and the

equilibrium exchange rate.

b) Estimate the impact on national saving, investment, trade balance and

equilibrium exchange rate, if government increases the purchases of goods

and services by 250?

c) Estimate the change in national saving, investment, trade balance and

equilibrium exchange rate, if the world interest rate increases up to 10 %. (G

= 1 000)

A large multinational shipping company, MGC, Inc. has just decided to spend €10 million on new storage space in Munich, €45 million on new aircraft, and €5 million on additional acquisition of kerosene. In addition to these expenses, the company is producing 5 million parcels at a price of €5 per parcel. Now suppose that MGC plans to have a tenth of that production in inventory. Over time, the company’s parcels have met with increasing demand, but the inventory has only increased by €1 million.

a. What is this firm’s total planned investment?

b. How much did the firm actually invest?

c. What is the difference between actual and planned investment? Should MGC produce more or fewer parcels? Why?

Need to name agents, please choose one choice that can be used to name these related agents correctly?

1. The simple way is to use the agent's name, e.g., Name the controller agent David Edwards if this name is his official name.
2. It is good to use the job position to name the agent. This general description can help the conceptualization.
3. It is good to only use two names for the agents: internal agent and external agent.

The supplier master data is important in the internal controls in this business cycle. Please illustrate why the supplier master data is essential to manage risks.

Which of the following statements is correct?

A. The level of production is always equal to thr lrvrl of production

b. In the Keynesian model, income is determined by the interest rates

c. Firms receive payments for the factors of production

d. The level of income is always equal to level of spending

Explain why recessionary gap and inflationary gap are closed

Price($)          Quantity(‘000 ton)

350                 5

300                 10

250                 20

200                 25

150                 30

100                 40

50                   55

A town has 80 households and two production firms on fast food: Alpha & Beta,

If Alpha reneges on the agreement and produces Q = 30 tones and Beta will produce the remaining tones with market quantity 55 ton and cost $25 per ton.  Calculate Alpha’s and Beta’s profits.(10 marks)

How can monetary policy be used to boost aggregate demand

Research the job search theory and its applicability to daily business life.

There are various market structures, under which each firm in an economy follows into, these market structures range from perfect competition to monopoly. 

a) How do characteristics of a monopoly differ from those of a perfect competition? 

b) .Your company operates in an oligopoly market. You have been told that non price competition strategies can help you increase your sales in the short run. Would you propose and explain any 3 non price competition campaigns that you would employ for this call?