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Analyse, using a production possibility curve diagram, the effect net immigration would most likely have on an economy.
analyse,using a production possibility curve diagram, what effect net immigration is likely to have on an economy.
With current technology, suppose a firm is producing 500 shirts daily. Also assume that the least-cost combination of resources in producing those shirts is 10 units of labor, 8 units of land, 3 units of capital, and 4 units of entrepreneurial ability, selling at prices of $50, $40, $60, and $30, respectively. If the firm can sell these 500 shirts at $2 per unit, what is its total revenue? Its total cost? Its profit or loss? Will it continue to produce shirts? If this firm’s situation is typical for the other makers of shirts, will resources flow toward or away from this apparel?
When company executives buy and sell stock based
on private information they obtain as part of their
jobs, they are engaged in insider trading.
a. Give an example of inside information that might
be useful for buying or selling stock.
b. Those who trade stocks based on inside
information usually earn very high rates of
return. Does this fact violate the efficient markets
hypothesis?
c. Insider trading is illegal. Why do you suppose
that is?
A company faces two kinds of risk. A firm-specific
risk is that a competitor might enter its market and
take some of its customers. A market risk is that the
economy might enter a recession, reducing sales.
Which of these two risks would more likely cause the
company’s shareholders to demand a higher return?
Why?
The income expected to be received next year rises from $50,000 to $54,200. What will be consumption and saving if they were previously $21200 each
Multiple Choice
Given: C = 100 + 0.75Yd; I = 120 - 0.1Y – 200i; G= 40; T = 40
What is the marginal propensity to consume?
Answer:
50
-0.2
100
-200
What is the autonomous spending multiplier?
Answer:
4
40
100
50
What is the value of Y in the goods market equilibrium if interest rate is equal to 5%?
Answer:
350
489
629
556
Given your value of Y in 33, what is the value of disposable income?
Answer:
449
678
437
589
What is the value of consumption?
Answer:
542
393
437
616
What is the value of investment?
Answer:
47
39
72
88
How much will Y change when government spending increase by 20?
Answer:
90
120
100
80
How much will Y change when taxes increase by 20?
Answer:
-80
-70
-60
-50
How much will Y change when government spending and taxes increase by 20?
Answer:
20
40
10
50
Given: Money Supply = 900; Mt = 0.7Y; Ms = 250 – 800i, and P = 1
If Y is equal to 1000, what is the value of the interest rate?
Answer:
15%
20%
16%
6.25%
Given the interest rate in 40, how much money will be used for speculative purposes?
Answer:
210
233
200
616
What will be the amount of money that will be used for transactions?
Answer:
789
393
700
667
If Money supply decreases to 800, what will be the new interest rate?
Answer:
18.75%
34.6%
19.66%
44.5%
What will be the new amount for speculative purposes?
Answer:
150
100
250
300
What will be the new amount of money that will be used for transactions?
Answer:
789
393
700
667
Given: IS ~ Y = 657 – 571i
LM ~ Y = 357 + 1143i
What is the equilibrium value of the interest rate in the economy?
Answer:
17.5%
32%
16%
57%
What is the equilibrium value of income in the economy?
Answer:
557
887
667
678
If Fiscal Policy was done to expand aggregate expenditure and made the government spending increase, what will happen to the IS curve?
Answer:
Shift to the left
Shift to the right
If Fiscal Policy was done to contract and made the level of taxation to increase, what will happen to the IS curve?
Answer:
Shift to the left
Shift to the right
If Monetary Policy was done to expand the economy and made the money supply to increase, what will happen to the LM curve?
Answer:
Shift downward
Shift upward
Explain how the interest rate works in the classical system to stabilize aggregate demand in the face of autonomous changes in components of aggregate demand such as investment or government spending.
If the consumption function is given as C= 20 + 0.8Yd, complete the
Following table:
Disposable
Income (Yd)
200 500
Consumption
(C)
300 700
Savings (S) 100
a. What happens to the debt-GDP ratio? b. Does the relative level of the initial values affect your answer?
