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The main focus of macroeconomic study
Assume a hypothetical economy with the following information. (Show all the necessary working to obtain full marks).
Y=E
Autonomous expenditure = 3500
Equilibrium income = 9800
Full employment level of income is = 14000
i. Illustrate the above using a well labelled diagram.
ii. What is the value of the multiplier in this economy?
iii. Give the equation of the aggregate expenditure line.
iv. What level of autonomous expenditure is required to get this economy to its full employment level?
The chart below illustrates the cumulative confirmed deaths by COVID-19 just before what looks to be a potential third wave of the pandemic in South Africa. There have been 56 363 confirmed deaths in South Africa alone from COVID-19 as of 30 May 2021. Use specifically the Solow growth model to discuss the implications of this pandemic on the prospects of long-run economic growth for South Africa
Assume you are managing a food processing plant in Ethiopia. The demand function for one of your product is given as Qd=50-2p.
a) Find the point price elasticity if price is 15 ETB? Is it elastic or inelastic?
b) How do you interpret the elasticity result?
c) In order to get more revenue what will be your recommendation. Is it to increase price or decrease price? Why?
d) Describe at least four determinants of the price elasticity demand for the food product?
If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price and quantity?
If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%. Calculate her income elasticity of demand for the ice cream and interpret the result.
What is the relation between productivity and cost? Describe the association using equation for MC & MP and AP & AC
Use specifically the Solow growth model to discuss the implications of this pandemic on the prospects of long-run economic growth for South Africa.
Do monopoly firms get a normal profit or supernormal profit in the shortrun? Why?
a hypothetical economy gets hit by an adverse shock that reduces the marginal productivity of capital furthermore the economists have estimated that this will affect the goods market more as compared to the labour market and aggregate supply.
analyze and explain the effects of these shocks on all broad macroeconomics variables both in the short run and the long run using the IS LM LAS framework.
