Macroeconomics Answers

The market for ride-hailing services before and after the imposition of a $2.75-per-ride tax shows that the tax shifts the supply curve up by $2.75, increasing the price paid by the consumer from $20 to $21.75 and decreasing the price received by ride-hailing companies from $20 to $19. The quantity of rides provided also falls from 500,000 to 425,000.

Thinking Critically

1. The figure shows the market for rides before and after the imposition of a $2.75-per-ride tax. How can we use the figure to measure the effect the tax has on consumers and on Uber and Lyft? Redraw the graph and show the areas representing the losses to consumers and to firms resulting from the implementation of the tax.
2. In New York City, drivers for ride-hailing services are now guaranteed a minimum wage. Draw a graph to show the economic effect of this price floor in the market for these drivers. On the graph, identify the minimum wage, the deadweight loss, and the number of surplus drivers that result from the minimum wage.

How monetary and fiscal policy shift aggregate demand curve?

write down the formula to compute growth rate in consumer price index. how the cpi differ from GDP deflator?

Consider the loanable funds market in a closed economy. Suppose that, in addition to the risk-free rate, r, firms are required to pay a risk premium, m, that reflects the economy- wide (i.e. systemic) risk of default, when they borrow so that the demand for loanable funds is described by I(r+m) while the supply is S(r) as usual. Analyze the effects on the quantity of saving and investment, on GDP, and on the risk-free interest rate, of a permanent rise in systemic risk modeled as a rise in m. What happens to the borrowing cost, r + m, that firms pay in this circumstance?

Mudbug College in Louisiana is trying to convince Louisiana taxpayers that the tax dollars spent at Mudbug College are well spent. One of the college’s arguments is that for every $10 spent by Mudbug College, an additional $6 of expenditures are generated within Louisiana. Mudbug College is arguing that the multiplier for their expenditures is

Given the utility function, U = x²y², with the budget constraint , M = P₁ x + P₂ y , where U is the utility, x is the quantity of commodity one and Y is the quantity of commodity two and M is income of the consumer .

a. find the utility maximizing quantities of both commodities

b. if the P₁= 2 and P₂ and M =50, determine the specific quantities of both commodities

c determine whether utility is maximized or minimized

in an economy where the conditions of the sticky wage model of the aggregate supply hold the production function is given by Y=L0.6, where is L is quantity of labor employed and the target wage is 1.calculate the natural rate of output (potential GDP)

1. Use the AD-AS model to illustrate the impact of strikes on the general price level and the level of real production and income in the economy.

2. Using the Phillips curve, illustrate how cost-push inflation affects the relationship between unemployment and the inflation rate.

3. Use the AD-AS model to illustrate what the impact of an expansionary monetary policy instrument will be on the general price level and the level of real production and income in the economy.

View the following 2 TED Talks (video presentations). As you watch the videos, take notes of any relevant information.

• The Future of Money | Neha Narula
• How the blockchain is changing money and business | Don Tapscott

3. Decide which of the 2 TED Talks best responds to this question;

• Should we trust electronic currencies, like bitcoin they way we trust government issued money?  

4. Produce in at least 200 words a Post in which you explain your position. Your post must contain at least the following elements:

• It must state the title and the author of the chosen TED talk.
• It must state the reason why believe that TED talk best answers the question.
• It must explicitly explain the relationship, connection, or link between the ideas provided in the TED Talk and the concept of Fiat Money. 

Explain the difference between monetary loosening and monetary tightening. According to the statement, the MPC reduced the monetary policy rate by 100 basis points. Does this constitute a monetary loosening or monetary tightening? Explain.