Macroeconomics Answers

1.     Show using the IS-LM graph the impact of an expansionary fiscal policy if the LM curve is vertical. If you were the Economic Planner in this country, how would you implement the fiscal policy without causing any crowding out of private investment? (You may insert a snapshot of the graph if drawn manually).

(a) Describe five economic effects of continuous, moderate inflation.

(b) How might governments use monetary policy to reduce the rate of inflation?

• Describe what has happened since 2008 to the number of people that are:Employed
• Unemployed according to the formal definition of unemployment
• Unemployed according to the expanded definition of unemployment
• Explain whether it is possible for the amount of employed people to decrease while the unemployment rate decreases.
• Analyse the differences in unemployment rates by race and gender.
• Propose how you think unemployment can be reduced in South Africa?

• Describe what has happened since 2008 to the number of people that are:Employed
• Unemployed according to the formal definition of unemployment
• Unemployed according to the expanded definition of unemployment
• Explain whether it is possible for the amount of employed people to decrease while the unemployment rate decreases.
• Analyse the differences in unemployment rates by race and gender.
• Propose how you think unemployment can be reduced in South Africa?

AN APPROPRIATE GOVERNMENT INTERVENTION IN THE ECONOMY

Taxmania is a closed economy with government. Aggregate demand is described by , where denotes aggregate consumption,  denotes investment and  denotes government expenditure. Disposable income is denoted by ; income in Taxmania is taxed at a rate , while the government can also deduct taxes as a lump sum .

In 2017-18, the Pakistan Bureau of Statistics announced that of all adult Pakistanis, 59,786,200 were employed, 3,613,800 were unemployed, and 58,800,000 were not in the labor force. Use this information to calculate the unemployment rate

What is the difference between intermediate and final goods? Why is the distinction between intermediate and final goods important for measuring GDP?

In 2017-18, the Pakistan Bureau of Statistics announced that of all adult Pakistanis, 59,786,200 were employed, 3,613,800 were unemployed, and 58,800,000 were not in the labor force. Use this information to calculate the unemployment rate

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In 2019, 200 KGs of oranges are produced at Rs.40/kg, 500 KGs of apples are produced at 120/kg, and 200 Glasses of orange juice are produced at Rs.150/glass.

In 2020, 220 KGs of oranges are produced at Rs.50/kg, 450 KGs of apples are produced at 140/kg, and 230 glasses of orange juice are produced at Rs.135/glass.

Assuming 2019 is the base year; calculate the nominal GDP in 2019