Macroeconomics Answers

 Considering a three sector economy, i.e., Y = C + I + G, derive the expression for output (Y) 
 
and aggregate demand (AD).                        

Consider an economy having following values of Consumption, Investment, Government

Spending, and Taxes, 

C = 300 + 0.7Yd ​I = 200 – 200i​G = 600​T = 100  

Derive the aggregate demand equation. Also, calculate the output in an economy

MRTSlk for Q = 10K^0.5 L^0.5

Consider an economy having following values of Consumption, Investment, Government

Spending, and Taxes, 

C = 300 + 0.7Y_d         I = 200 – 200i G = 600          T = 100   

Derive the aggregate demand equation. Also, calculate the output in an economy.  

Use diagrams to illustrate the consumption function (20)

1. Use a production possibilities curve to distinguish between maximum attainable combinations, attainable but inefficient combinations and unattainable combinations of the production of two goods. (20)

Dedication of macroeconomic

Assume the economy is in a recession. Explain how each of the following policies would affect consumption, investment and national income (GDP). In each case, indicate any direct effects, any effects resulting from changes in the macroeconomic variables and the overall effect in the economy. If there are conflicting effects making the answer ambiguous, say so.

a)    How fiscal policy influences aggregate demand and how these can be used to expand the economy?

b)    How monetary policy influences aggregate demand and how these can be used to expand the economy?

Explain why flexible labour markets are such an important element in supply side policies? 

As a business economist, critically analyse how changes in the world price of oil affect the amount of frictional unemployment in a country