Macroeconomics Answers

Use the information in the table below to answer Q.3.1 to Q.3.3:
GDP at market prices R397bn
Net primary income payments to the rest of the world R37bn
Indirect taxes R23bn
Subsidies R11bn
Consumption of fixed capital R32bn
Q.3.1 Calculate the value of gross national income (GNI) at market prices

You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow:
Q.4.5 Identify any three non‐income determinants of consumption

You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow:
Q.4.3 Calculate the equilibrium level of income

You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow:
Q.4.2 Calculate the value of the multiplier

A municipal government has a yearly budget of $50 million. The municipality must spend $1 million a year to hire and equip a police officer; it must spend $250 thousand a year on a schoolteacher. Assume the municipality does not spend its budget on anything else. Just cops & teachers. The police officer’s job is to arrest the criminals, and a single police officer makes 2 arrests per year. The teacher’s job is to teach, and a single teacher instructs 40 students a year.


Draw the municipality’s production possibilities boundary, placing the number of arrests on the vertical axis & the number of the students on the horizontal axis. Make sure to show the axis intercept points


What is the opportunity cost of arresting a criminal? Give the number & explain

Find the arrow Pratt risk coefficient for the utility functions of wealth U(W)= In W and draw the diagram of the utility with respect to the wealth and state whether this person is risk averse, risk neutral or risk lover.

A monopolist can produce at a constant average (and marginal) cost of AC = MC = $5.
It faces a market demand curve given by Q = 53 – P.
a. Calculate the profit-maximizing price and quantity for this monopolist. Also
calculate its profits.

Which of the following is likely to shift the consumption schedule upwards?
1.A currently large stock of durable goods in the possession of consumers.
2.consumer prices are expected to rise.
3. Expectations of a fall in interest rates.
4. The expectation of a future rise in the consumer price.

Please expain why this answercis correct: that a country's balance of payments can afford a deficit on the current account if there is a positive balance on the financial accounts.