Macroeconomics Answers

In about 1000-1500 words, write a well-researched ess

For any developing country, analyze its exchange rate system and all recent developments in its exchange rate policies. Use these to answer the following questions in your writing:

1. What are monetary and fiscal policy implications of the exchange rate system adapted by the selected country?
2. What is the devaluation history (dates) of the selected country? Have past devaluations achieved the targeted economic objectives?
3. How trade has performed in the selected country post-devaluation?
4. What are your views on ensuring better BOP-NIIP outcomes of this country?

After searching the history of exchange rate regime in your selected country, you explain conceptually about efficacy of each exchange rate system (fixed, floating and pegged) and its implication on monetary policy and fiscal policy. Next discussion should be on devaluation, its objectives and situation analysis post devaluation. Answer all questions above.

Discuss in the context of any one of the South Pacific Island countries the following: Use data analysis and or graphs where applicable.

1. What are three major categories of transactions in the current account (CA)?
2. Analyze CA data for the country over the last 5 years (2015-2019) – what are the trends and their macroeconomic implications?
3. What is the link between current account balance (CA) and Net International Investment Position (NIIP)?
4. Calculate Net International Investment Position (NIIP) as percentage of GDP for the Country - what does it indicate?

Obtain data on Balance of Payments, Current Account and Net International Investment Position. Data can be obtained from many sources – country’s government statistical department or data.imf.org > data sets> International Financial Statistics. Quarterly review of Reserve Banks/Central Banks can also be used. For better analysis, get quarterly data if possible. 

characteristics of denel as a monopoly

The following equations describe an economy (think of C, I, G, etc as being measured in billions and i as a percentage; a 5 percent interest rate implies i = 5)

C = 0.8 (1 – t) Y

           t = 0.25

           I = 900 – 50i

           G = 800

           L = 0.25Y – 62.5.i

           M / P = 500

Show that a given change in the money stock has a larger effect on output the less interest sensitive is the demand for money.

The following equations describe an economy (think of C, I, G, etc as being measured in billions and i as a percentage; a 5 percent interest rate implies i = 5)

C = 0.8 (1 – t) Y

           t = 0.25

           I = 900 – 50i

           G = 800

           L = 0.25Y – 62.5.i

           M / P = 500

How does the increase in tax rate  affect the equilibrium level of income?

The following equations describe an economy (think of C, I, G, etc as being measured in billions and i as a percentage; a 5 percent interest rate implies i = 5)

C = 0.8 (1 – t) Y

           t = 0.25

           I = 900 – 50i

           G = 800

           L = 0.25Y – 62.5.i

           M / P = 500

Show that a given change in the money stock has a larger effect on output the less interest sensitive is the demand for money.

Review the last year’s COVID19 supplementary budget of Fiji (available online) and discuss if the initiatives are adequate to mitigate the pandemic. Discuss the drawbacks, and explain how they may be improved. 

Q1.One day, Barry the Barber collects $400 for haircuts. Over this day, his equipment deteriorates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes. Based on this information, compute Barry’s contribution to the following measures of income:

(i) Gross domestic product

(ii) Net national product

(iii) National income

(iv) Personal income

(v) Disposable personal income

Q1.Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 3 bars and the price is Ghc4. In year 2, the quantity produced is 4 bars and the price is Ghc5. In year 3, the quantity produced is 5 bars and the price is Ghc6. Year 1 is the base year.

(i) What is the nominal GDP for each of these years

(ii) What is the real GDP for each of these years?

iii) Calculate the GDP deflator for each period

(iv) What is the % growth rate of real GDP from year 1 to year 2?

(v) What is the % growth rate of nominal GDP from year 1 to year 3

Q1.What contributes more to GDP- production of an economy car or a luxury car? Why?

Q2.Explain why an economy’s income must equal its expenditure

Q3.A farmer sells cocoa to a beverage producer for Ghc2. The producer uses the cocoa to make Milo and sells it for Ghc3. What is the total contribution of these transactions to GDP?

Q4.GDP does not include the value of used goods that are resold. Why would including such transactions make GDP a less informative measure of economic well-being?

Q5.G does not include spending on transfer payments. Why are transfer payments excluded?

Q6.A few years ago, John paid Ghc500 to put together a record collection. Today, she sold her albums at a garage sale for Ghc100. How does this sale affect GDP?