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In a period of high unemployment and in order to stimulate the economy a central bank would probably:
a raise the discount rate
b raise the required reserve ratio
c buy bonds through open market operations
d increase government spending and cut taxes
If the central bank decreases reserve requirements to stimulate the economy, which of the following is most likely to happen to interest rates and gross domestic product all things equal?
Interest Rates GDP
a. Increase Decrease
b. Increase Increase
c. Decrease Decrease
d. Decrease Increase
If the required reserve ratio is 5% and the central bank buys $200 worth of securities, the maximum increase in the money supply will be
a. $ 2,000 b. $ 4,000 c. $ 600 c. $ 1,000
Which one of the following statements is correct about the creation of money?
a.
Money is created by printing notes only.
b.
The quantity of money is dependent on demand for money and interest rate only.
c.
The SARB regulates the amount of money in circulation by controlling the interest rate.
d.
The SARB regulates the amount of money in circulation by controlling the inflation targeting range only and not the interest rate.
Why a nation’s overall balance of payment must equal zero? Explain.
Why should the income approach and the product approach to computing GDP both yield the same value? Explain.
Acme Tobacco is currently selling 5,000 pounds of pipe tobacco per year. Due to competitive pressures, the average price of a pipe declines from $15 to $12. As a result , the demand for Acme pipe tobacco increases to 6,000 pounds per year.
a) what is the cross elasticity of demand for pipes and pipe tobacco?
b) Assuming that the cross elasticity does not change, at what price of pipes would the demand for pipe tobacco be 3,000 pounds per year? Use $15 as the initial price of a pipe.
The inhabitants of the small country Zumenia mainly uses potatoes to make chips.Therefore they need oil to fry chips.Explain with the aid of diagrams how the equilibrium price and quantity oil will be affected when price of potatoes decrease
2.1 Consider a closed economy that is described by the following model:
C = 280m + 0.72Y
Where:
C = Consumption Y = Income
I = 150m I = Investment
G = 300m G = Government spending
T = 22% t = Tax rate.
2.1.1 Calculate the multiplier. (3)
2.1.2 Calculate the total autonomous spending. (2)
2.1.3 Calculate equilibrium Income(2)
2.1.4 Calculate the Level of savings at equilibrium(3)
2.1.5 Calculate the amount of tax collected at equilibrium(3)
Employment equity is notion that
When an employer lists a job opening, they receive hundreds of applications. Eightfold is a new product that uses artificial intelligence (AI) to scan resumes and quickly and accurately identify the applicants who are the best fit for the job. An economist who studied the use of AI in hiring said, “You get the more nontraditional, equally qualified, equally high-performing people, but the employer doesn’t seem to have to compete for them as much.” What effect might the use of AI have on the slope of the Phillips curve and why?
How can policy makers (government) use the neoclassical model of production and consumption to inform policy decisions in the economy?
