Learn more about our help with Assignments: Macroeconomics
Search & Filtering
Macroeconomics
You are given the following information about an economy. C=100+0.7Yd, I=100, G=500 and tax rate is 20%.
(i)Find the equilibrium level of income.
(ii) How much increase in income will take place if government expenditure on goods and services increased by k70?
(iii) Suppose the marginal propensity to save is 0.6, the marginal tax rate is 0.5 and the marginal propensity to import is 0.8. What will be the size of multiplier?
(i)Find the equilibrium level of income.
(ii) How much increase in income will take place if government expenditure on goods and services increased by k70?
(iii) Suppose the marginal propensity to save is 0.6, the marginal tax rate is 0.5 and the marginal propensity to import is 0.8. What will be the size of multiplier?
Macroeconomics
Hypothetical economy is given by the following identities, C=2500+0.5Yd, I=1500, G=200, T=0.2Y, X=600, Z=5000+0.2Y.
(i)What is the value of total autonomous expenditure?
(ii) What is the value of the multiplier for this economy?
(iii)What is the value of induced consumption expenditure?
(i)What is the value of total autonomous expenditure?
(ii) What is the value of the multiplier for this economy?
(iii)What is the value of induced consumption expenditure?
Macroeconomics
The neutrality of money refers to the impact of_______________policy, which means that only___________ variables changes in the AS-AD model in the medium to long run
Macroeconomics
Q1: https://www.youtube.com/watch?v=XUBeH7VQaFY
Watch the above YouTube link. The Case Study on “Starbucks”. According to your understanding, explain with diagrams and examples, what are the strategies Starbucks established to grow the business in all over the world. Also what are the challenges and hurdles Starbucks faced geographically and how “You” will make the strategies to solve those problems.
b. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
Watch the above YouTube link. The Case Study on “Starbucks”. According to your understanding, explain with diagrams and examples, what are the strategies Starbucks established to grow the business in all over the world. Also what are the challenges and hurdles Starbucks faced geographically and how “You” will make the strategies to solve those problems.
b. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:
Price (Per Bottle of Perfume) Zimal’s Quantity Demanded Zawaiyar’s Quantity Demanded Market Supply
100 600 650 250
200 500 550 450
300 400 450 850
400 300 350 1050
500 200 250 1250
600 100 150 1450
Given the following information construct market demand curve and find the market equilibrium.
Macroeconomics
Samantha deposits $2,000 in a saving account that pays an annual interest rate of 3 percent. Though the expected inflation was 2%, over the course of the year the inflation rate is 4 percent. Calculate how much money Samantha has at the end of the year and how much her purchasing power has changed.
Macroeconomics
define Gross domestic product
Macroeconomics
Describe how, if at all, each of the following developments
affects the actual investment and the break-even investment (this is the linear line) lines
in the basic diagram for the Solow model:
(a) The rate of depreciation falls
(b) The rate of technological progress falls
(c) The production function is Cobb-Douglas, f(k) = kα, and capital’s share, α falls.
(d) Workers exert more effort, so that output per unit of effective labor for a given level
of capital per unit of effective labor is higher than before.
affects the actual investment and the break-even investment (this is the linear line) lines
in the basic diagram for the Solow model:
(a) The rate of depreciation falls
(b) The rate of technological progress falls
(c) The production function is Cobb-Douglas, f(k) = kα, and capital’s share, α falls.
(d) Workers exert more effort, so that output per unit of effective labor for a given level
of capital per unit of effective labor is higher than before.
Macroeconomics
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?
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?
Macroeconomics
Describe how, if at all, each of the following developments
affects the actual investment and the break-even investment (this is the linear line) lines
in the basic diagram for the Solow model:
(a) The rate of depreciation falls
(b) The rate of technological progress falls
(c) The production function is Cobb-Douglas, f(k) = kα, and capital’s share, α falls.
(d) Workers exert more effort, so that output per unit of effective labor for a given level
of capital per unit of effective labor is higher than before.
affects the actual investment and the break-even investment (this is the linear line) lines
in the basic diagram for the Solow model:
(a) The rate of depreciation falls
(b) The rate of technological progress falls
(c) The production function is Cobb-Douglas, f(k) = kα, and capital’s share, α falls.
(d) Workers exert more effort, so that output per unit of effective labor for a given level
of capital per unit of effective labor is higher than before.
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?
