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Macroeconomics
Imagine that the government starts with a balanced budget and then because of the increase in taxes start running a budget surplus.Graphically analyze the effects of budget surplus on interest rate,saving and investment.if loanable funds means the flow of resources available from private saving
Macroeconomics
uppose the level of output that creates full employment in the economy is 1 800. Using the multiplier, determine the level of investment spending that would create full employment in this economy
Macroeconomics
Consider an economy described by the following equations:
Y = C + I + G
Y = 5,000 G = 1,000 T = 1,000
C = 250 + 0.75(Y − T) I = 1,000 − 50 r.
a. In this economy, compute private saving, public saving, and national saving.
b. Find the equilibrium interest rate.
c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
d. Find the new equilibrium interest rate.
Y = C + I + G
Y = 5,000 G = 1,000 T = 1,000
C = 250 + 0.75(Y − T) I = 1,000 − 50 r.
a. In this economy, compute private saving, public saving, and national saving.
b. Find the equilibrium interest rate.
c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
d. Find the new equilibrium interest rate.
Macroeconomics
Consider an economy described by the following equations:
Y = C + I + G
Y = 5,000 G = 1,000 T = 1,000
C = 250 + 0.75(Y − T) I = 1,000 − 50 r.
a. In this economy, compute private saving, public saving, and national saving.
b. Find the equilibrium interest rate.
c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
d. Find the new equilibrium interest rate.
Y = C + I + G
Y = 5,000 G = 1,000 T = 1,000
C = 250 + 0.75(Y − T) I = 1,000 − 50 r.
a. In this economy, compute private saving, public saving, and national saving.
b. Find the equilibrium interest rate.
c. Now suppose that G rises to 1,250. Compute private saving, public saving, and national saving.
d. Find the new equilibrium interest rate.
Macroeconomics
Discuss the working of the adjustment mechanism if, Aggregate Demand (AD) is greater than Aggregate Supply (AS).
OR
If in an economy :
Change in initial investment (ΔI) = ₹ 1,000 crores,
Marginal propensity to save (MPS) = 0•2.
Find the value of the following :
(a) Investment multiplier (K)
(b) Change in final income (ΔY)
OR
If in an economy :
Change in initial investment (ΔI) = ₹ 1,000 crores,
Marginal propensity to save (MPS) = 0•2.
Find the value of the following :
(a) Investment multiplier (K)
(b) Change in final income (ΔY)
Macroeconomics
US dollar has recorded a jump of 5.50 paise per dollar (p/$) in the last one month; this situation might bring smiles and sorrows to different types of traders (exporters and importers).’’ Justify the given statement.
Macroeconomics
Discuss the likely consequences for an economy of an increase in the money supply.
Macroeconomics
State whether the following statement is true or false and support your answer with facts and figure:
‘‘In the past few decades, primary sector has created maximum jobs in Pakistan.’’
‘‘In the past few decades, primary sector has created maximum jobs in Pakistan.’’
Macroeconomics
What makes the LAS curve different from the SAS curve? What are the assumptions made here?
Macroeconomics
What are the assumptions of the possible shape of the aggregate supply curve?
