Macroeconomics Answers

When banks have positive excess reserves, this indicates that

a) banks can expand their loans

b) banks must contract their deposits

c) nothing will happen since banks will always try to keep large amounts of excess reserves

d) a run on the bank is impossible

State any two(2)ways that firms operating under perfect competition can use to increase their profit since they cannot temper with price and quantity.

ompare the evolution of Saudi's nominal GDP against real GDP between 1970 and 2019.

Given are the following information for the three sector economy,

C = 600 + 0.8Yd

I = 400

G = 200

T = 300

All values are in RM million.

A) Derive the:

i) consumption function after the tax. [2 marks]

ii) saving function after the tax. [2 marks]

B) Calculate the equilibrium income level for the above economy.

C) If the full employment level of income is RM6, 400 million, calculate the:

i) inflationary gap or deflationary gap.

ii) required tax changes to achieve a full employment level of national income.

D) If the government increases the government spending of RM80 million and reduces the tax by RM80 million at the same time, calculate the new equilibrium level for the above economy.

Distinguish between GDP deflator and Consumer Price Index (CPI). (7)

(b) The CPI of Namibia was 101 in December 2018. It then rose to 133 in December 2019,

(i) Determine the annual rate of inflation over the period. (4)

(ii) Explain any shortcoming of real GDP from a welfare perspective (7)

(iii) Distinguish between nominal GDP and real GDP, and explain why nominal GDP growth of

an economy is usually higher than real growth.

IF GNP=500 CAPITAL COSNUMPTION ALLOWANCE=50 INDIRECT TAXES =60 SUBSIDIES=10 CORPORATE PROFITS= 70 DIVIDENDS= 15 GOVERMENT TRANSFER PAYMENTS=25 PERSONAL DIRECT TAXES=70 PERSONAL CONSUMPTION EXPENDITURE= 275 WHAT IS NNP

NATIONAL INCOME , PERSONAL INCOME, PEROSNAL DISPOSABLE INCOME PEROSNAL SAVINGS

Triniland is recognized as a high-income economy by the World Bank. Assume that households in Triniland decide to increase their savings for retirement. (a) Using a correctly labelled diagram of the loanable funds market, show how the increase in savings will affect the equilibrium real interest rate

With the aid of appropriate diagrams, show and explain why classical economists viewed money as a veil

You are given the following demand and supply equations of a product.

Q_d=100-5p

Q_s= 10+5p

Where, Q_d=Quantity demanded

                   Q_s=Quantity Supplied

                   P= Price per unit

(a) Draw the figures for demand and supply on the basis of the above equations

(b)

What will be the equilibrium price and quantity     demonstrate graphically

(c) Graphically show what sort of adjustment would take place to bring about equilibrium if the price happens to be 5 per unit

As a newly appointed Product Manager by Balaji wafers, you are asked to develop New Product Planning for new flavor of potato wafer. How would you develop new product planning process?