Macroeconomics Answers

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.

Discuss the impact that the war in russia and ukrain had on economic development of the globe and in South

Africa.

A tax system is progressive if …

The first principle of economics discussed in Chapter 1 of Mankiw’s book is that

people face trade-offs. Use a production possibilities frontier to illustrate society’s trade-

off between two “goods”—a clean environment and the quantity of industrial output.

What do you suppose determines the shape and position of the frontier? Show what

happens to the frontier if engineers develop a new way of producing electricity that emits

fewer pollutants.

1. One of the most difficult tasks in regression analysis is to obtain the data suitable for quan-

titative studies of this kind. Suppose you are trying to estimate the demand for home fur-

niture. Suggest the kinds of variables that could be used to represent the following factors,

which are believed to affect the demand for any product. Be as specific as possible about

how the variables are going to be measured. Do you anticipate any difficulty in securing

such data? Explain.

Find an expression for the equilibrium quantities X and Y

Given U=f(x,y)=Xa Yb and the budget constraint as M=PxXpyY

With the aid of appropriate diagram, illustrate income and substitution effect for an increase in price of goods x

The internet has allowed for an improvement in the dissemination of

information, including in the labour market. In the context of a model with

matching frictions, we can interpret this as an increase in the matching efficiency, A.

If that is the case, what would the model predict? In answering this question, use a

model with matching frictions

The college graduates of 2000 could hardly have asked for better luck. The unemployment rate dropped to 4.1 % in May 2000- roughly, the lowest level in a generation- and employers were literally scrambling for new hires. Starting salaries rose, many graduating seniors had numerous job offers, and some firms even offered $10,000- $20,000 bonuses to students who signed the dotted line.

(i) Briefly explain and justify what prevailing situation was taking place in the year 2000. (2 marks) (ii) 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) (iii) Use a diagram to illustrate the correction measures. (2 marks)