Macroeconomics Answers

example percentage change in real gdp using current year as the base year for calculation

An increase in criminal activity in South Africa acts as a deterrent to foreign tourists
considering visiting South Africa, and as a result, there is a decline in the number of
American tourists to South Africa.

Explain, with the aid of a graph, the effect of this on the rand/dollar exchange rate
and the equilibrium quantity of dollars.
(8)

Out of 20 million people in the population, 9 million people are in the Labour force and 3 million are unemployed, therefore the unemployment rate is:

Consider an economy described by the following: AD: Y = 2250−10P, AS: P = 125+0.1Y.
What are the short-run equilibrium values for real GDP and the price level?
Hint: In equilibrium: AD = AS
(AD is aggregate demand and AS is aggregate supply

Consider the following information to answer questions 3.8 to 3.12:

Government spending = R450
Exports = R250
Autonomous consumption = R300
Autonomous imports = R150
Investment expenditure = R100
Marginal propensity to consume = 0,6
Full employment level of income = R2 800

3.8 Autonomous expenditure (Ᾱ) is equal to
[1] R1000.
[2] R950.
[3] R1 150.
[4] R800.58

3.9 What is the marginal propensity to save?
[1] 1
[2] 1.60
[3] 0.60
[4] 0.40

3.10 What is the value of the multiplier?
[1] 2
[2] 2.50
[3] 1.50
[4] 1.80

3.11 What is the equilibrium level of income Y*?
[1] R1 600
[2] R2 375
[3] R1 800
[4] R2 000

3.12 By how much must investment spending increase to bring about full employment?
[1] R300
[2] R200
[3] R150
[4] R170

3.13 Which of the following factors may have caused the upward shift of the aggregate spending curve?
[1] An increase in interest rates.
[2] An increase in taxation.
[3] A decrease in government spending.
[4] An increase in net exports.

In the Keynesian model with a government, the tax rate indirectly determines?
[1] The level of consumption.
[2] The level of investment.
[3] The level of government expenditure.
[4] The equilibrium level of income.

In the simple Keynesian model without a government or foreign trade, assuming the MPC is 0.70. The multiplier is
[1] 1-0.7/1
[2] 1/0.7
[3] 1/1-0.7
[4] 1-0.3/1

Construct a discussion on the different ways that government intervenes in your country. Support your discussion by citing real life examples of such intervention from reliable sources.

Consider the following information to answer questions 3.8 to 3.12
Government spending = R450
Exports = R250
Autonomous consumption = R300
Autonomous imports = R150
Investment expenditure = R100
Marginal propensity to consume = 0,6
Full employment level of income = R2 800
3.8 Autonomous expenditure (Ᾱ) is equal to
[1] R1000.
[2] R950.
[3] R1 150.
[4] R800.
58
3.4 What is the marginal propensity to save?
[1] 1
[2] 1.60
[3] 0.60
[4] 0.40
3.9 What is the value of the multiplier?
[1] 2
[2] 2.50
[3] 1.50
[4] 1.80
3.10 What is the equilibrium level of income Y*?
[1] R1 600
[2] R2 375
[3] R1 800
[4] R2 000
3.12 By how much must investment spending increase to bring about full employment?
[1] R300
[2] R200
[3] R150
[4] R170