Macroeconomics Answers

Suppose the government wants to double the steady state value of output per effective worker by using policies to change the saving rate. Determine the new saving rate and use the Solow growth diagram to show the effect of the policy change on the growth rate of capital per effective labour in both the short- and long run.

1. Explain the three categories of returns to scale relating to the long-run average cost curve

May i have more detailed answer, my question is (15 marks)

The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same.

1. Compute the doubling time for France’s per capita real GDP.
2. Compute the doubling time for Korea’s per capita real GDP.
3. What will France’s per capita real GDP be in 2045?
4. What will Korea’s per capita real GDP be in 2045?

the money mulplier of a an economy with 600 billion and 60 reserves and 120 in the circulation?

Real interest rate (percent per year) Supply of loanable funds (2005 dollars) Demand for loanable funds (2005 dollars) 5 2,000 5,000 7 3,000 4,000 9 4,000 3,000 11 5,000 2,000 a) Draw the demand and supply curves. b) What is the equilibrium real interest rate? c) What is equilibrium investment? Equilibrium saving? d) Describe the situation in Dream Island's loanable funds market when the real interest rate is 10 percent. Is there a shortage of loanable funds? A surplus of loanable funds? e) Describe the situation in Dream Island's capital market when the real interest rate is 6 percent. Is there a shortage of loanable funds? A surplus of loanable funds? 

Nigeria and South Africa are the two largest economies in Africa. Examine how these two economies have dealt with the international monetary trilemma in the last one year.

Which one of the following is correct about government spending in the Keynesian model?

[1] Government spending affect the size of the multiplier.

[2] Government spending decreases aggregate spending in the economy.

[3] A decrease in repo rate discourage social spending by government.

[4] Government spending has an effect on the income level in the economy.