Macroeconomics Answers

15. Which industry was the largest contributor to the decline in GDP for first quarter of 2017?
A) Transport, storage and communication
B) Agriculture, forestry and fishing
C) Trade, catering and accommodation
D) Electricity, gas and water

16. Which industry recorded an increase towards GDP contribution for first quarter of 2017?
A) Trade, catering and accommodation
B) Transport, storage and communication
C) Mining and quarrying
D) General government services

17. Which two divisions contributed to the growth of the manufacturing industry in the first quarter of 2016 for GDP?
A) Electricity, gas and water & Food and beverages
B) Construction & Food and beverages
C) Wood and wood products, paper, publishing and printing; & Basic iron and steel, non-ferrous metal products
D) Civil construction works; & Wood and wood products, paper, publishing and printing.

Explain how the intrest rate in detirmined in the classical theory

Describe in detail the externality that arises from a plastic bag

Do you think it is the right thing to do to charge industries that pollute the air?
Explain.

(a) Explain Friedman’s money demand function, and discuss its policy implications. (8 marks)
(b) If inflation is a monetary phenomenon, why do most governments keep feeding the inflation with an ever increasing money supply? Use the AD-SRAS-LRAS framework to explain your answer. (9 marks)
(c) Use Friedman’s Expectation Augmented Phillips Curve to analyze the short-run and long-run impacts of each of the following change on inflation and the unemployment rate: (look at gallery, got take photo)
(i) an once-and-for-all permanent rise in money supply; and
(ii) a permanent increase in monetary growth. (8 marks)

Consider the following relationship between money supply M2, money multiplier (m) and monetary base (MB): M2 = m  MB During the latest financial tsunami in the US, financial de-leveraging and other changes in economic behaviors have caused a significant reduction of the money multiplier (m) from around 8.5 to around 5. If the Federal Reserve chooses to do nothing, what will be the effect of the reduction in m to the US economy? Which variable the Federal Reserve has chosen to work on, and to what extent this has helped the US economy? Some people were worrying that the US could go into another Great Depression. How does the above discussion help your prediction on such possibility?

suppose c=150+0.8(Y-t), T=100+0.1Y, G=300 and I= 210-100r derive the equation of IS curve and find out its slope. Suppose G changes by 5 units how much will the IS shift.

Suppose the demand equation for computers by teetan ltd for the year 2017 is given by Qd=1200-P and the supply equation is given by Q=120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to rs 400 and rs 120