Macroeconomics Answers

31. Ethiopia has a GDP of $8 billion (measured in U.S. dollars) and a population of 55 million. Costa Rica has a GDP of 59 billion (measured in U.S. dollars) and a population of 4 million. Calculate the per capita GDP for each country and identify which one is higher.

During the Covid-19 pandemic, Saudi government came up with various spending by giving various stimulus packages to both businesses and households to support them. However, in July 2020, the government also increased VAT from 5% to 15%.

i.                What fiscal policy action would you have expected from the government based on your knowledge of macroeconomics?

In a hypothetical economy Compensation of employees = $8874; Rents = 70; Interest = 605; Proprietors’ income = 1048; Corporate profits = 1627; Taxes on production and imports = 1009; Consumption of fixed capital = 1690; Net foreign factor income = 98; Statistical discrepancy = 26. Calculate, NI, GDP, NDP, PI and DI by using income approach. All figures are in Billions ($).

2. Given two equations of the IS curve for a 3 sector economy:

IS₁ where Y = 2000 - 5000r

IS₂ where Y = 3000 - 5000r

a. Draw the curves IS₁ and IS₂ in a diagram using r = 5% and 10%.

b. Describe how the following factors shift the IS curve to the left.

i. Tax at once

ii. Use of autonomus

c. i. Calculate the gradients of the curves IS₁ and IS₂.

ii. Are these two curves parallel?

C = 200 + 0.75 Yd, (dengan Yd = Y – T)

I = 400 – 600r

G = 100

T = 20 

a. i. Derive the equation for the curve IS.

ii. Calculate the slope of the IS curve above.

b. i. Calculate the equilibrium value of income if the interest rates are 10 percent and 20 percent.

 ii. Based on the answer to question b (i), draw the IS curve.

discuss principles of keynesian ant-cyclical fiscal policy

Find GNP gap point if the natural rate of unemployment is 9% and actual rate of unemployment is 5%.