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Q1. Covid-19 pandemic has caused a reduction in aggregate demand in Ghana, with the aid of a diagram/diagrams discuss any four fiscal policies and four monetary policies that can boost aggregate demand.
2.Real GDP per person has been growing in the world and SA
mechanism? Why does it fail to deliver economic growth in the long run? What is the solution of
the Solow model for consumption per person in the steady-state?
A firm in a perfectly competitive market in the short run, faces a price of $20 per unit of its output. It is producing 200 units per week and employing 40 workers. The last unit of output takes 32 percent of one worker's week to produce. The wage rate is $50 per week and fixed costs (per week) are $1000.
i) Calculate MC, AC and profit at the present level of output.
ii) Is the firm maximizing its profit?
iii) Suppose that the price falls to $16 and fixed costs rise to $1,500, should the firm close down?
Explain the relationship between the effectiveness of monetary policy and the interest elasticity of money demand. Will monetary policy be more or less effective the higher the interest elasticity of money demand? Now explain the relationship between fiscal policy and the interest elasticity of money demand. Why do the two relationships differ?
Requirement
a) Assuming that the predictions of the experts listed above are accurate, when in the future will Country Z’s GDP double compared to the GDP level of 2019? [10 marks]
b) What would Country Z’s GDP growth rate be from 2025 and so on at 1%? Explain your reasoning carefully. [5 marks]
c) Consider now the more optimistic scenario in which the economy does not slow down and the current growth rate of 5% remains constant in the coming years. How long will it take for the GDP level to double in this scenario? Express your answer in two forms:
i) In number of years
ii) As a fraction of your answer in part a
Explain how aggregate demand is determined within the classical model. What would be
the effects on output and the price level of a drop in money supply?
#339914 on Dec 2023