Macroeconomics Answers

Assume “Skill India” policy implemented by Ministry of Skill Development and Entrepreneurship (MSDE) in 2014 is doing well and has been successful in helping many workers learn new skills. Further, the program has reduced the structural (or, natural) rate of unemployment in India, un.
a) Using the concept of Phillips curve, comment on how the reduction in un is beneficial for the economy?
b) The opposition claimed that government program is expensive. Instead, the expansionary monetary policy could have been a cheaper way to cut the unemployment. Comment.

the introduction of atm, credit cards and e-wallets have reduced the demand for money at any given level of income and interest rate. using as-ad and is-lm framework: a) Show if this evolution will have any impact on the output, prices and interest rate in the medium-run. Illustrate using a diagram.

explain how changes in one varibles can lead to a shift in the money demand curve in the classical model

how graphically, that if the money demand is unstable, pegging the interest rate is better than pegging the money supply. now suppose these fluctuations were in the is curve, will you still recommend pegging the interest rates? why?

Assume that an economy is initially operating at the natural rate of output (full employment output). Use the AD-AS model to illustrate graphically the effects on price and output of a reduction in government spending. Explain your assumptions with respect to the range of aggregate supply of your analysis

Manish buys a second hand car from a car broker for Rs. 3,25,000.The broker receives Rs. 16,500 as commission for his services from manish. How will this transaction affect the national income of the country?

Net national product at factor cost of a particular country in a year is Rs. 1900 crores. There are no interest payments made by the households to the firm/government Or by the firms/government to the household. The personal disposable income of the household is Rs. 1200 crores. The personal income takes paid by them are Rs. 600 crores and the value retained earnings of the firms and government is valued at Rs. 200 crores. What is the value of transfer payments made by the government and firms to the households.

What is an opportunity cost? How does the idea relate to the definition of economics? Which of the following decisions would entail the greatest opportunity cost? Example allocating a square block in the heart of the Toronto for surface parking lot or allocating a block at the edge of typical subrub for a lot? Explain.

In Country B, assume that banks have no excess reserves to start with and cash drain is 50%. Assume a required reserve ratio of 10%. The Central Bank of Country B decreases the monetary base (i.e. high-powered money) by 100,000 Liras. a) Explain how this policy will affect the money supply. Calculate the change in money supply and explain how the change comes about. b) How can the Central Bank decrease the monetary base by 100,000 Liras? c) Suggest an alternative tool that the Central Bank can employ to bring about the same change in the money supply as calculated in (a). d) What policy objectives could the Central Bank be pursuing so as to want to decrease the monetary base? e) What are some limitations of the Central Bank in achieving the objectives you mention in (d)?

A change in money supply affect the demand of goods and services or not. give logical reason?