Macroeconomics Answers

Write a magazine article called ‘Understanding the micro-economic business environment’

1) You are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost schedule:

Quantity Average          Total Cost

600 players                          $300

601                                301

Your current level of production is 600 devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $550 for it. Should you accept the offer? Why or why not?

Malaysia adopts a fixed exchange rate system in its trade with Pakistan. Assume that the Pakistani government decides to reduce import of palm oil from Malaysia. Explain and show the effect on equilibrium level of exchange rate between Malaysian Ringgit-Pakistan Rupee (MYR / RP), the values of the Malaysian Ringgit and Pakistan Rupee as well as the supply of Malaysian money.

The balance of payments curve shift to the right if import prices rise. True or false? Explain your answer.

Malaysia adopts a fixed exchange rate system in its trade with Pakistan. Assume that the Pakistani government decides to reduce import of palm oil from Malaysia. Explain and show the effect on equilibrium level of exchange rate between Malaysian Ringgit-Pakistan Rupee (MYR / RP), the values of the Malaysian Ringgit and Pakistan Rupee as well as the supply of Malaysian money.

(4 markah/marks)

A country adopts a flexible exchange rate system with imperfect capital mobility and capital flows are sensitive to changes in interest rates. Following the Covid-19 pandemic, the balance of payments was in a deficit position. Thus, the country intends to stimulate economic growth by reducing the required reserves ratio. Using IS-LM-BP analysis, show and explain the effectiveness of this policy in influencing the aggregate output level.

(7 markah/marks)

Malaysia adopts a fixed exchange rate system in its trade with Pakistan. Assume that the Pakistani government decides to reduce import of palm oil from Malaysia. Explain and show the effect on equilibrium level of exchange rate between Malaysian Ringgit-Pakistan Rupee (MYR / RP), the values of the Malaysian Ringgit and Pakistan Rupee as well as the supply of Malaysian money. 

A country adopts a flexible exchange rate system with imperfect capital mobility and capital flows are sensitive to changes in interest rates. Following the Covid-19 pandemic, the balance of payments was in a deficit position. Thus, the country intends to stimulate economic growth by reducing the required reserves ratio. Using IS-LM-BP analysis, show and explain the effectiveness of this policy in influencing the aggregate output level. 

1.Evaluate the impact of covid 19 on world economies and particularly on financial markets zeroing on Zambia since the pandemic started .

2 outline the structure and size of the zambian financial system .it's structure ,size and composition as at end 2020 .

Domestic financial sources available in a modern economy?

Striking a balance between Corona expenditure and fiscal deficit.