Macroeconomics Answers

The multiplier effect means that

A. consumption is typically several times as large as saving.

B. a small change in consumption can cause a much bigger increase in investment.

C. a small decline in the MPC can cause equilibrium GDP to rise by several times that amount.

D. a small increase in investment can cause a GDP to change by a larger amount.

5.1 Suppose that the price f whiskey increases from R100 to R150 a bottle and as a result the quantity demanded decreases from 1 100 bottles to 800 bottles. 5.1.1 Use ARC (midpoint) formula to calculate the price elasticity of demand for whiskey. 5.1.2 Based on the calculated elasticity value in 5.1.1 indicate whether the demand in the market for whiskey is elastic and inelastic 5.1.3 Based on your answer in 5.1.2, illustrate the elasticity of demand in the market in the market for whiskey. Clearly indicate the correct percentage in price and quantity on the elasticity graph. 5.1.4 Explain how producers could increase total revenue given the calculated elasticity coefficient.

Suppose last year's consumer price index was 1.20. If the inflation rate is 4%, then find out the consumer price index of the current year. 

• Scarcity, Opportunity Cost, Wants, Entrepreneurship, Markets, Law of Demand, Law of Supply, Market Failure, The Informal Economy, Unemployment Rate, Structural Unemployment, Human Capital, Inflation Rate, Gross Domestic Product, Consumption, Economic Growth, Supply Side Fiscal Policy, Taxation, Public Debt, Fiat Money, Cryptocurrencies, Liquidity, Trade-off between Risk and Return, Monetary Policy, and Saving.

General Instructions:

Choose one concept from the list above, and write a paper a 500 to 550 word paper (500 words is the absolute minimum) in which you state a response to the following prompt;

"Before completing all 5 Graded Discussions I thought about (one of the concepts from the list) in this way ..., now I think ... ".  

1.     The following functions are given:

        C = 100 + 0.8Y

I = 120-5r

M_s = 120

M_d = 0.2y-5r

A.   develop the Investment saving curve and draw the curve

B.    write the LM equation and draw the curve

C.    find the equilibrium income and interest rate

D.   what is the  equilibrium income if the equilibrium interest rate increased by 25%

Q:1 An investor deposits a sum of Rs 100,000 in an investment company with a promise of a rate of return of 18 percent per year. What will the sum amount be at the end of 5 years if the interest is added (i) yearly, (ii) six-monthly, (iii) quarterly, (iv) monthly, and (v) continuously.

From the information given in Question #1, if the investor decides to withdraw the accumulated interest

at the end of each year, what would be his yearly earnings from the investment if added (i) yearly, (ii) six-monthly, (iii) quarterly, (iv) monthly, and (v) continuously?

A bearer bond worth Rs. 50,000 after six years. What will be the present value of the bond if interest is

added yearly at 12 percent.

A defence certificate worth one hundred rupees now would be worth Rs. 425 at the end of 10 years. What is the implied rate of compound interest?

In macroeconomic theory: A. total production is always equal to total income. B. total production is always greater than total income. C. total production is always less than total income. D. total production may be greater than total income. E. total production may be less than total income. 

Politically, we historically defined Republicans as deficit hawks; that is, individuals who preferred small deficits.  Alternatively, we historically associated freer spending with Democrats. What does your graph of the deficits since 1980 suggest about this general statement? Write a paragraph to support your conclusion? What other events might help to explain why deficits rise and fall?

Background:

Party in the White House:

• 1981-1989: Ronald Reagan, Republican
• 1989-1993: George H.W. Bush, Republican
• 1993-2001: William Clinton, Democrat
• 2001-2009: George W. Bush, Republican
• 2009-2017: Barack Obama, Democrat
• 2017-present: Donald Trump, Republican