Macroeconomics Answers

Suppose milk and honey are the only products produced in Ghana. Use the data belowfrom the
ii.real GDP, (3marks)
a.Computefor each year the
economy of Ghana to answer the questions that follow:
iii.the GDP deflator.(3marks)
YearPrice of MilkQuantity of MilkPrice of HoneyQuantity of Honey
i.nominal GDP, (3marks)
2012Ghc1200Ghc2100
2013Ghc2200Ghc4100
2011Ghc1100Ghc250
Base year: 2011
b.Compute for 2012 and 2013 from the respective preceding years the percentage change in
Required:
i.nominal GDP, (2marks)
ii.real GDP, (2marks)
iii.the GDP deflator (2marks)

Discuss the extent to which the traditional approach is an adequate model of exchange rate determination.

Effects of the exchange rate on the balance of payments

Discuss the extent to which the traditional approach is an adequate model of exchange rate determination.

Assume that the demand for real money balance is:

M/P-Y[0.6-(r+x)]

Income, Y= 1000. Real Interest Rate, r=0.05(5%)

Expected Inflation Rate is constant at 0.05% (5%)

calculate the seignorage if the rate of growth of nominal money rate is 7%

Compute the first and second order derivatives of the following:
1. Y = lnx + 3x – 2
2. Y = x

Discuss the to which the traditional approach is an adequate model of exchange rate determination.

Which of the following are wholesale and which are retail?
A. Large scale deposit made by firms at negotiated rates of interest______ wholesale/ retail
B. Loans made by high street banks at published rates of interest______ wholesale/retail
C. Deposit in saving account in high street banks_____wholesale/retail
D. Large scale loans to industry syndicated through several banks_____ wholesale/retail
3. Rank the following assets of a commercial banks in order of decreasing liquidity.
1. Market loans
2. Reserve with bank of Ghana
3. Cash
4. Personal loans
5. Sale and purchase agreement
6. Mortgages
7. Government bonds

The demand and supply functions of a commodity are given as follows:
Qd = 40 – lnp Qs = lnp – 20.
1.Find the equilibrium price and quantity

The demand and supply functions of a commodity are given as follows:
Qd = 40 – lnp Qs = lnp – 20.
Find the equilibrium price and quantity
Sketch the graphs of supply and demand on a well labeled diagram and shade the regions representing producer’s and consumer’s surplus.
Compute the consumer surplus