Macroeconomics Answers

Description of te type of fiscal policy required to recover from the negative effects of this covid-19 pandemic

Q.3.2
Explain, using 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.

How to calculate the tax revenue to the government of this country when the economy
remains in equilibrium

Explain with an aid of a symbols the monetary transmission mechanism when interest rates increases

C = 450 + 0.4Y
I = 350

G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550




)

Q.2.3 Calculate the equilibrium level of income
(Hint: use the multiplier

C = 450 + 0.4Y
I = 350

G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550





Q.2.2 Calculate the size of the multiplier
(Note: Round your answer to two decimal places)
(4)

C = 450 + 0.4Y
I = 350

G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550




Q.2.1 Calculate the level of autonomous spending in this economy. (2)

C = 450 + 0.4Y
I = 350

G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550




Q.2.5 Calculate what the new equilibrium income should be if the government of this
country decides to cancel all taxes, implying the tax rate would now be 0%.

C = 450 + 0.4Y
I = 350

G = 150
X = 70
Z = 35 + 0.1Y
T = 0.15Y
Yf = 1550



Q.2.6 Before the government decreased the tax rate, how much of government
spending was required to bring the economy to full employment?