Macroeconomics Answers

Y=A(0.025k-0.5N)N

A=2\3

K=2000

N=-18+(18/5)w

5-c=200+(2/3)(y-T)-300r

6-T=-75+(1/4)Y

I=100-100r

G=100

L=0.5Y-200i

M=6300

π=0.10

What are the values of Cyd, I, r ,Ly and N, s, w

Should we include residential construction, such as apartment buildings and houses in Gross Investment when we calculate GDP?

Beginning from the initial classical equilibrium suppose that the central bank increases the money supply by 420 while price remains fixed as it's initial long run equilibrium level. What will be the impact of this policy on all endogenous variables in short run and long run

State and explain critically the life cycle hypothesis?

A Indian publisher sells 2000 rupees

worth of books to a resident of Brazil.By

itself this item is a credit item in the India

current account. Describe some offsetting

transaction that could ensure that the India

current accounts and the capital and

financial account balances would continue

to sum zero.

The GDP deflator in India is 200 january

1 2019. The deflator rises to 242 by january

1 2020 and to 266 january 1 2021. 6

a)What is the annual rate of inflation over

the two year period between january 1

2019 and 2020

b) what is the annual rate of inflation over

the year period from january 2020 to 2021

This diagram from the economist argues that investment (spending by firms) is influenced more by how the firm is doing  rather than the central interest rate. It also shows that  shareholders (consumers) are earning good returns from their  money as a result of this business success. 

Explain why monetary policy may be less effective as a  result of this information.

a.   (i) Distinguish between balance of trade and balance of payment.             

(ii) Why do most developing countries experience balance of payment deficit?

(iii) Explain the main factors that influence investment in Kenya                 

Illustrate the usefulness of Phillips Curve in Macroeconomic management

a.   You are given the following information about a hypothetical economy;

C = 800 + 0.75Y

I = 500

G = 900

Where

C = Consumption

I = Investment

G = Government spending

(i) Compute the equilibrium level of national output and consumption.        

(ii) What is the size of government expenditure multiplier (1mk)

(iii) Interpret the government expenditure multiplier in (ii) above                

(iv) Differentiate between accelerator and multiplier effects.                       

(v) Explain the limitations to the application of multiplier in economic management.       

Discuss in an essay the advantages of a mixed economy