Macroeconomics Answers

Consider an economy with technological progress but
without population growth that is in steady-state. Now suppose there is a one-time
jump in the number of workers.
(a) At the time of the jump, does output per unit of effective labor rise, fall or stay
constant.
(b) After the initial change (if any) in output per unit of effective labor when the new
workers appear, is there any further change in output per unit of effective labor? If
so, does it rise or fall? Why?
(c) Once the economy reaches its new steady-state, is output per unit of effective labor
higher, lower or the same as it was before the new workers appeared? Why?

Team Justice economy has exports of K6000 and marginal propensity to import of 0.2. Its
autonomous imports are K5000 while the tax rate is 20% of income. Investment spending is
K1500, autonomous savings is negative (–) K2500 and the marginal propensity to save is 0.5.
a. Write down:
i. The import function for the economy
ii. The consumption function for the economy
b. What is the value of total autonomous expenditure?
c. What is the value of the multiplier for this economy?
i) When closed without government .
ii) When closed with government
iii) When the economy is open
d. What is the value of induced consumption expenditure at the equilibrium level of
income?
e. What is the value of the budget deficit or surplus at the equilibrium level of income?
f. What is the value of Net exports or trade balance at the equilibrium level of income?
g. Given that full employment is reached at a level of 14, 300, by how much should we
change investment so as to achieve full employment income?

Explain the factors that influence imports of a country?

As consumer reduce their spending inventories are rising. Thr commerce department reported that sales of durable goods fell 0.6 percent , while sales of durable goods decresed 1.5 percent in August.Inventories of durable goods increased 1.4 percent . which components of GDP changes when sales of non durable goods fell

Given the following information about an open economy with government draw the AD function and find the equilibrium level of income?
C=100+0.7YD, I=200, G =150, t=A0.2, X=100, Z=0.2

Given α is non-income tax, β is income tax, δ is marginal propensity to consume, γ is autonomous consumption, T (tax), Y (national income), I0 (investment) and G0 (government expenditure).


a) Formulate the equations needed to find the reduced form of equilibrium income (Ye).