Macroeconomics Answers

International agreements require that states sometimes sacrifices their domestic needs to honor their international responsibilities, discuss these using appropriate examples  

Why are savings important in an economy

1You are given the following information about the commodity and money markets of a closed economy without government intervention.

The commodity market

Consumption function;

C = 50 + 2/5Y

Investment function:

I = 790 – 21r

The Money Market

Precautions and Transactions demand for money

MDT = 1/6 Y

Speculative demand for money

MDS = 1200 – 18r

Money supply

MS = 1250

Required:

i.Determine the equilibrium levels of income and interest rate for this economy.

ii.Using a well labelled diagram, illustrate the equilibrium condition in part (i) above.

True/False:

1. The Achaemenid Empire was defeated by Pharaoh Rameses the Great: ___________

2. The Chavin of Andes carried out long-distance trade in dyes and precious stones such as

obsidian. _____________

Multiple Choice:

1. Which of the following was a way in which the Zhou asserted political power?

(a) The Zhou ruler’s power was transmitted through clan networks;

(b) The Zhou copied the Shang patrimonial state, centered on ancestor veneration;

(c) The Zhou paid tribute to the nomadic tribes to keep them from invading;

(d) The Zhou ruler was selected by the most powerful regional lords;

(e) They claimed descent from Yu the Great.

Write briefly, the type of system/solution you are proposing, indicate from which category of the NDP2030 plan is the problem you identified and why you chose that area. Provide a list of your proposed system objectives (i.e. the requirements of the proposed solution) . Prepare a word document proposal containing detailed description of the problem, the current structure (algorithm) or what is currently happening, one or two paragraphs explaining the algorithm, and how you to intent to solve the defined problem (problem solution).

Consider the Economy of Rwanda. The consumption function is given by 𝐶=200+0.75[𝑌−𝑇] while the

investment function is 𝐼=200−25𝑟. Government purchases and taxes are both 100.

The money demand function of Rwanda is [𝑀𝑃⁄]𝑑=𝑌−100𝑟. The nominal money supply is 100 and the

price level P is 2.

i

i) Derive the IS curve equation.

ii

ii) Draw a well labeled diagram of the IS Curve.

iii

iii) Derive the LM curve equation.

iv

iv) Draw a well labeled diagram of the LM Curve.

v

v) Determine the equilibrium level of income and equilibrium interest rate

Suppose that instead of cooking dinner for an hour, you decide to work an extra hour, earning an additional $15.

You then purchase some (takeout) Chinese food, which costs you $10.

a. By how much does measured GDP increase?

1. If a commercial bank holds 20% as required reserves, the initial deposit is ksh 10,000, what was the money created by the bank from this initial deposit?

If

Consumption function C= 100+ 0.5Yd

TaxT= 100

InvestmentI= 200

ExportX= 120

Government Expenditure G= 150

ImportM= 0.03Y

Find the following:

1. The equilibrium level of income.
2. The next exports.

Consider the following data on U.S. GDP:

a. What was the growth rate of nominal GDP between 1994 and 2014? (Hint: The growth rate of a variable X over an N-year period is calculated as 100 ].)

b. What was the growth rate of the GDP deflator between 1994 and 2014?

c. What was real GDP in 1994 measured in 2009 prices?

d. What was real GDP in 2014 measured in 2009 prices?

e. What was the growth rate of real GDP between 1994 and 2014?

f. Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain.