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Macroeconomics
Do you think tradeoff between inflation and unemployment exist? Explain in detail. Also explain it's relevance for policy use.
Macroeconomics
Discuss importance of government intervention in a market economy?
Macroeconomics
Is subsidy always beneficial?
Macroeconomics
Given a is a non income tax b is income tax & is marginal propensity to consume y is autonomous consumption t tax y national income i0 investment and g0 government spending
Formulate the equilibrium to find the reduced form of equilibrium income Ye
Formulate the equilibrium to find the reduced form of equilibrium income Ye
Macroeconomics
An economy's aggregate demand curve (the relationship between short-run equilibrium output and inflation) is described by the equation:
Y = 11,000 - 17,000π, where π is the inflation rate.
Initially, the inflation rate is 3 percent or π = 0.03. Potential output Yp equals 10,660.
Note: Keep as much precision as possible during your calculations. Your final answer for inflation should be accurate to at least two decimal places and output should be accurate to the nearest whole number.
a) Find inflation and output in short-run equilibrium.
b) Find inflation and output in long-run equilibrium
Y = 11,000 - 17,000π, where π is the inflation rate.
Initially, the inflation rate is 3 percent or π = 0.03. Potential output Yp equals 10,660.
Note: Keep as much precision as possible during your calculations. Your final answer for inflation should be accurate to at least two decimal places and output should be accurate to the nearest whole number.
a) Find inflation and output in short-run equilibrium.
b) Find inflation and output in long-run equilibrium
Macroeconomics
1. Consider two firms that produce a single output good, y, using two inputs: Capital, K, and labor, L. the prices of each unit of capital and labor are r and w, respectively. The output good y sells for $p per unit.
Firm A’s production function is y = fA(K,L) = K1/4 L1/4. The profit function is thus:
A(K,L) = K1/4 L1/4 – rK -wL
a. Find the profit maximizing levels of K and L as functions of r, w, and p
b. Suppose that r = w = $1 and p = $4. What is the profit maximizing level of output, y?
Firm A’s production function is y = fA(K,L) = K1/4 L1/4. The profit function is thus:
A(K,L) = K1/4 L1/4 – rK -wL
a. Find the profit maximizing levels of K and L as functions of r, w, and p
b. Suppose that r = w = $1 and p = $4. What is the profit maximizing level of output, y?
Macroeconomics
The Qd represents the amount consumed of good X. Px is the price of good X, Py, is the price of good Y, M is the level of income, and A is the level of expenditure in the advertisement. Assuming good X sells for P40 per unit and Y sells at P30/unit, the firm uses 4,000 units of advertising and the target buyer average income is P10,000. How much of good X will consumers buy? Is good Y a substitute to X or a complements? Is good X a normal or inferior good?
Macroeconomics
In 1980, Denmark had a GDP of $70 billion (measured in U.S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of $160 billion (measured in U.S. dollars) and a population of 5.3 million. By what percentage did Denmark’s GDP per capita rise between 1980 and 2000?
Macroeconomics
Consider an economy described by the equations of the
Solow-model (without technological or population growth), except that all labor income
is consumed and all other income is saved. The production function is Cobb-Douglas,
so f(k(t)) = k(t)α.
1. Write down the equation that governs capital accumulation!
2. Does this economy converge to a steady-state? If so, what is the steady state level
of k. How does that compare to the level derived in the lecture notes?
3. Is the saving rate in the economy constant? Increasing? Decreasing? What is the
intuition for that?
Solow-model (without technological or population growth), except that all labor income
is consumed and all other income is saved. The production function is Cobb-Douglas,
so f(k(t)) = k(t)α.
1. Write down the equation that governs capital accumulation!
2. Does this economy converge to a steady-state? If so, what is the steady state level
of k. How does that compare to the level derived in the lecture notes?
3. Is the saving rate in the economy constant? Increasing? Decreasing? What is the
intuition for that?
Macroeconomics
The Cobb–Douglas production function is
y=Z1^aZ2^b a>0, b>0
show that the MP1 = ay/z1, MP2 = by/z2
What is the MRTS21? How does it vary with: (a) y; (b) z2 /z1?
y=Z1^aZ2^b a>0, b>0
show that the MP1 = ay/z1, MP2 = by/z2
What is the MRTS21? How does it vary with: (a) y; (b) z2 /z1?
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#332078 on Oct 2022
#332078 on Oct 2022