Macroeconomics Answers

1.     Assume that velocity is constant, money growth is 5 percent per year, and real GDP is growing at 2 percent per year. 

Y=10,000 

T=2,500 

G=3,000 

C=1000+0.8(Y-T) 

I=2000-2000r 

Given the above information, compute: 

a.     , and S (i.e., private, government, and national saving),

b.     r  (the real interest rate),

c.     (the inflation rate),

d.     i  (the nominal interest rate).

The monetary policy transmission mechanism shows the relationship between

Consider the following problem. Suppose Govt. has reduced its purchase by 50 million USD. (Taxes = constant). If MPS = 0.7, what impact does this fiscal policy have on the followings? (Picture is not needed)

a)         Public Savings      b) Private savings          c) National savings    d) Investment

Explain with help of diagram  how adjustment in interest rate help reach equilibrium in the financial market

macroeconomic indicators that explain the health of the macro economy following the covid 19 pandemic in the South African economy

in the labour market explain how the rate of unemployment is related to the bargaining power and nominal wages

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls

from 10,000 slices to 7,400 slices, using the formula for arc price elasticity (5 marks)

i. What is the percentage change in price?

ii. What is the percentage change in quantity?

iii. What is the level of elasticity?

iv. What is the interpretation the result

Demonstrate using the classical model how a decrease in the money supply, a

decrease in income velocity and a rise in the transactions demand for money

would affect prices, money wages and real variables.