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a) Graph the supply and demand for real money balances
b) What is equilibrium interest rate?
c) Assume the price level is fixed
d) what happens to equilibrium interest rate if the supply of money is raised from 100 to 1200
e) If the central bank was to raise the interest rate to 7% what money supply should it set?
The Humphrey–Hawkins Act of 1978 required that the federal
government maintain an unemployment rate of 4% and hold the
inflation rate to less than 3%. What does the inflation-unemployment
relationship tell you about achieving such goals?
Q1. Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation
C=100+0.8Y
S=-100+0.2Y
I=120-5i
M^(S)=120
M^(D)=0.2Y-5i
Calculate
IS equation
LM equation
Equilibrium level of income and interest rate
Suppose a perfectly competitive industry can produce Roman candles at a constant marginal cost of R12 per unit. Once industry is monopolized, marginal cost rise to R16 per unit because R4 per unit must be paid to lobbyists to ensure that only this firm receives a Roman candle license. Suppose the market demand for Roman candles is given by Qd=1500-25P and marginal revenue curve by MR=20-Q/25 .Calculate the perfectly conpetitive and monopoly outputs and prices .
operating in the market for tertiary education. Over the past 18 months the following
simultaneous changes have been noticed in the market for tertiary education:
and equilibrium is at E. Now the market wage rate paid to truck drivers
increases from R250 to R300. Identify the type of disequilibrium that
will result from such a wage increase.
Q2. The per capita income in Ghana and Nigeria for the year 2019 are 4605 and 5927 dollars respectively. Discuss the flaws of using these figures to suggests that the welfare of people living in Nigeria is better than those living in Ghana.
Q1. Critically analyse how an increase in wages can lead to cost-push inflation as well as demand-pull inflation
Q2.
The per capita income in Ghana and Nigeria for the year 2019 are 4605 and 5927 dollars respectively. Discuss the flaws of using these figures to suggests that the welfare of people living in Nigeria is better than
those living in Ghana.
