Macroeconomics Answers

B.    Now, assuming the economy is open with government (G) participation and  external trade which is summarized as follows; export(X)= 100-0.10Y, import(M)=50, G=100, Taxes(T)= 100 and C, I, M_S, M_t, and M_z the same as defined in (a) above. Calcula  i. The equilibrium income and interest rate in this new econom ii The level of C, I, M_t, and M_z when the economy is in equilibrium ii Assuming capital is perfectly mobile in this economy, graphically sketch the IS-LM-BOP frame work of this economy. Comment on the balance of payment situation in this economy.

What exchange rate policy should government implement in (iii) to enhance income and why?                                                

A.   Given that in an economy, , I , M_S =300, M_t = 0.4Y, and M_z=125-200r where, Y= income, C= consumption, I= investment, M_S= money supply, M_t= transactional-precautionary money demand, M_z= speculative money demand and r= interest rate. Calculate;   i. The equilibrium level of income and interest rate in this economy

   ii. The level of C, I, M_t, and M_z when the economy is in equilibrium     

Given that in an economy, , I , M_S =300, M_t = 0.4Y, and M_z=125-200r where, Y= income, C= consumption, I= investment, M_S= money supply, M_t= transactional-precautionary money demand, M_z= speculative money demand and r= interest rate

What is the effect on the markets when supplies under invest in their businesses

As a policy consultant, use the AD-AS framework to explain how the health of the South African economy can be improved given that a diagnosis of the health of the South African economy following changes in its macroeconomic indicators in the past 5 years. Make use of diagrams to aid your explanation