Macroeconomics Answers

Where would an REA diagram for the production cycle depict the list of ingredients for making a product?

A. In the bill of materials table

B. In the raw materials table

C. In the work in process table

D. In the finished goods table

Three years later, the job market for the Class of 2003 was rather different. U.S. economic growth had slowed to a crawl, and then to a halt. Companies that had stocked up on recent college grads in the tighter labour markets of 1998-2000 found themselves with more than they knew what to do with in 2002 and 2003. They were not eager to hire more. Bonuses and other “perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May and June of 2003, the job market was far from the worst ever. But it was nothing like the glory days of 2000.

(v) Identify and explain two (2) fiscal policies and two (2) monetary policies that the US government may have used to correct this situation. (6 marks) 

(vi) Use a diagram to illustrate the correction measures. (2 marks)

What can be done to combat unemployment?

What is the impact of unemployment in the country economy?

What are the 5 main main macroeconomics objectives?

 In the endogenous growth model of Romer (1990), workers can, without costs,

shift between the production of inputs and R&D. Imagine instead that the fraction

of researchers in the economy is a fixed parameter that cannot be changed. Then,

conjecture what happens to the responsiveness of the growth rate in the economy to

the degree of substitutability among the varieties of ideas, φ.

Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - Q. However, during weekend nights, or peak hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that marginal cost is zero.

a. Determine the profit-maximizing price during weekdays and during peak hours. [4]

b. Determine the profit-maximizing price during weekdays and during peak hours if MC = 10 instead of zero. [4]   

c. Draw a graph showing the demand, marginal revenue, and marginal cost curves during peak hours from part (b), indicating the profit-maximizing price and quantity. Determine Uber’s profit and the deadweight loss during peak hours, and show them on the graph. [8]

According to supply side theorists, the aggregate supply curve will shift to the right when?

Use the saving-investment diagram to analyze the effects of the following on national saving, investment, and the real interest rate. Explain your reasoning.

a. Consumers become more future-oriented and thus decide to save more The government introduces an investment tax credit (offset by other types of taxes, so total tax collections remain unchanged).

b. A large number of accessible oil deposits are discovered, which increases the expected future marginal product of oil rigs and pipelines. It also causes an increase in expected future income.

The recent global development of Russia invading Ukraine has led to USA and European countries imposing sanctions on Russia. Given that Russia is a major player in OPEC, discuss the implication of this in South African economy.