Search & Filtering
1.
a) If the level of government spending were to decrease by 100 units in the IS – LM schedule
model, how would this affect the position of the IS schedule?
b) In which direction would the
schedule shift, and by how many units? ( 1+3=4 marks)
How can an oligopoly cause market failure
a) Consider a small open classical economy. Use an appropriate model and graph to
explain in detail what happens to the real exchange rate if the Government:
i. Engaged in expansionary fiscal policy
ii. Engaged in contractionary fiscal policy
Consider a Neoclassical model of an economy affected by the COVID-19 Pandemic. Use the
information given below to answer the following questions:
Production function Y = 10√𝐾𝐿
K = 100 , L = 25 (capital and labour)
r = 5% (domestic interest rate)
P = 100 (Domestic price level), P* = 110 (foreign price level)
M = 1000 (supply of money)
C = 75 + 0.5(Y-T)
I = 150 – 4r
G = 50, T = 50
Nx = 50 – 2E
Where E represents real exchange rate and e represents nominal exchange rate.
i) Calculate this economy’s trade balance and show it on a savings-investment diagram
ii) Calculate the net capital outflow, real and nominal exchange rate
iii) Due to the global pandemic of COVID-19, many workers die and the labour force
reduces to 16. Calculate the new trade balance and real exchange rate.
iv) Assuming a constant velocity of money, by how much should this economy’s central
bank adjust money supply to achieve its target of 0% inflation given the COVID-19
pandemic?
200 people are currently unemployed to structural changes in the Zawa Province but the economy is currently producing at their full potential of $45 billion. Then the economy in context is producing at full employment
Consider a hypothesis economy described by the following equation
C=100
I=1200
X-1110
M=200+0.25Y
T=250+0.3Y
Required
1.Compute the equilibrium level of the national income
2.The level of consumption income after tax and net exports that corresponds to the equilibrium level
national income
Discuss in an essay (150 words) form the key macroeconomic effects of COVID19 (ignore health effects) on New Zealand. Identify how this economy can promote economic growth given the pandemic. Identify three macroeconomic policy interventions to support the livelihood of people in such an economy.
Starting from the initial equilibrium position again, suppose that the capital stock increases by 170. What
will be the impact of this expansion on labour market equilibrium and aggregate supply of output?
Calculate values of all endogenous variables and give intuitive explanation of the results.
A. Please create a digital graph of the economy at macroequilibrium. You may use the digital tool of your choice for this (Draw io, Google, PowerPoint, Word, whatever). Save it as an image and put the picture in the answer box.
B. Tell me the most fun thing you've done this summer.
C. Draw a doodle (or a graph if you want.. i'm not picky), take a picture of it, and insert the picture into your answer.
D. What's been the most interesting thing we've studied in this class so far?
Why is rent seeking bad for the economy
