Macroeconomics Answers

2.3. Explain why monetarists believe that monetary policy affects output and employment in the shortrun but not in the long run. What is the crucial difference between the short run and the long run?​​​​​​​​​​​​(4)

Implications of IMF policies for the economy of the present pakistan?

Domestic financial sources available in a modern economy?

The role played by capital markets in mobilizing domestic resources for raising national productivity ?

By using the IS-LM model, if the money demand is sensitive to interest rate and the investment is not sensitive at all to interest rate, monetary policy is more effective compared to fiscal policy. Right or wrong? Prove it

Economy is facing inflation. By using the IS-LM model, show that the inflation can be overcome by implementing contractionary monetary policy. Is it possible? Prove it

What do you understand about national income? How would you like to summarize about approaches for the monetary analysis?

the AD‐AS model, how the South African Government can use

fiscal policy as a tool to recover from the negative effects of this COVID‐19

pandemic.

Given the following demand function for good X;

  Qdx=50-0.4Px+0.5Py-0.25B

Where Px is price of good X;

      Py is price of good Y;

   B is cosumer’s income.

Suppose Px=20; Py=30; and B=52

Find the value of:

Price elasticity of demand 

Cross elasticity of demand

Income elasticity of demand

What is the relationship between good X and good Y?

What would you advise the producer of good Y when the price of good X goes up? 

C=450+0.4Y

I=350

G=150

X=70

Z=35+0.1Y

T=0.15Y

Yf=1550

1.calculate the autonomous spending in the economy

2. Calculate the size of the multiplier

3.calculate the equilibrium level of income ( HINT: use the multiplier method)

4.Calculate the tax revenue to the government of this country when the economy remains in equilibrium

5.Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would be 0%

6.Before the government decreased the tax rate ,how much of government spending was required to bring the economy to full employment?