Macroeconomics Answers

C=50+0.80 (Y-T)
I=200
G=100
Find out the equilibrium level of income
Suppose G increase to 125 what is the new equilibrium level of income?
What level of G is needed to achieve a target income of 200?

Explain money multiplier (M) and reserve ratio (R) will increase or decrease during the financial crisis.

According to the quantity theory of money, if Madibaz Island produces 200 units
of output and has a money supply equal to R1000, then if the money supply
doubles while velocity remains unchanged, the new price level will?

What will happen to the GDP deflator and CPI of America if the price of steel produced in India and sold to America goes up?

The government has an easier job of dealing with the macroeconomics impacts of consumers and inventors being pessimistic about the future of the company than the period of stagnation. Do you agree? Explain

Which of the following is the best example of a monopolistically competitive market? *
A) The wheat market.
B) The electricity market.
C) The restaurant market.
D) The market for automobiles

we consider the view that the demand for money is a constraint on
the demand for credit since credit cannot create money unless the resulting
deposits are willingly held. We dismiss this as only an equilibrium argument.
How does the role for the demand for money envisaged here by Laidler compare
with that argument?

You are the manager of a medium-sized company that assembles personal computers in Ghana. You purchased most components such as RAM in a competitive market. Based on your marketing research, consumers earning over $10000 per month purchase 1.5 times more RAM than consumers with lower incomes. One morning you picked up a copy of the dailies and read an article indicating that input components for RAM are expected to rise, forcing manufacturers to produce RAM at a higher unit cost. Based on this information, what can you expect to happen to the price you pay for RAM? Would your answer change if, in addition to this change in input prices of RAM, the article indicated that consumer incomes are expected to fall over the next two years as the company dips into recession? Explain your answer with appropriate diagrams

Was the government shutdown justified? Why or why not?

The accompanying table gives part of the supply schedule for personal computers in the United States.

Price of computer

Quantity of computers supplied

$1,100

12,000

$900

8,000



a. Calculate the price elasticity of supply when the price increases from $900 to $1,100 using the

midpoint method.

b. Suppose firms produce 1,000 more computers at any given price due to improved technology. As

price increases from $900 to $1,100, is the price elasticity of supply now greater than, less than, or the

same as it was in part a?

c. Suppose a longer time period under consideration means that the quantity supplied at any given

price is 20% higher than the figures given in the table. As price increases from $900 to $1,100, is the

price elasticity of supply now greater than, less than, or the same as it was in part a?