Macroeconomics Answers

Explain why employers pay a lower efficiency wage when unemployment is high. How would the efficiency wage change in an economy if it became easier to monitor the work that employees did? Other than to incentivise workers to put in effort, can you think of any other reasons why wages might be higher when unemployment is low (i.e. an upward-sloping wage-setting curve)?

What is the role of the financial system?

Suppose in a simple economy with no foreign sector, the marginal propensity to save (MPS) is 0.25. Planned investment spending has suddenly fallen, reducing AE and output to a level that is $500 million below full employment level of income(Y*).
a) If the government decided to try to get the economy back to full employment by cutting taxes, how big of a tax cut would be needed? [5 points]
b) Using production, income and expenditure chain [graph your answer] explain adjustment process to full employment equilibrium. [10 points]

With reference to a country of your choice, discuss one macroeconomic policy (either fiscal or monetary) that the government of this country has used within the last 3 years. Explain the Policy measure in detail and state the macroeconomic objectives of the policy measure. Please provide source of your information as evidence that you are the using a real policy and that it has been researched.

Analyse the effect of the policy using the AD/AS model. Discuss thoroughly the effect/result that is being desired through this policy and how will this benefit the economy.

Critically evaluate the policy measure and provide 2 strengths and 2 weaknesses of it. Explain why you think the policy might or might not work.

Which of the following statements is true, which statement is false? Explain for each statement whether it is true or false.
21) The income of U.S. citizens working abroad counts in U.S. GDP.
22) Double counting can be avoided by using the value-added approach when calculating GDP.
24) As long as an item has never been sold, its value is counted in GDP for the year in which it is finally sold.

Which of the following statements is true, which statement is false? Explain for each statement whether it is true or false.
11) The only source of economic growth is growth in the number of workers in the economy.
12) Labor productivity is total output divided by the total number of worker hours.
13) Workers who take a job related training course are enhancing their human capital.
14) If the population is growing as fast the economy, then per-capita output is growing.
15) If more workers have more capital to work with, then production will increase.
16) Productivity is output per worker hour.
17) The only source of economic growth is technological advancement.
18) Per capita output is a measure of economic welfare of a country.
19) GDP measures the total income of everyone and the total spending by everyone in the economy.
20) Total income in the economy can sometimes be greater than total spending.

Which of the following statements is true, which statement is false? Explain for each statement whether it is true or false.
1) When more people who are not working start looking for jobs, the labor-force participation rate increases.
2) An increase in search costs will decrease structural unemployment.
3) The natural rate of unemployment is the unemployment rate during a period of full employment.
4) Anyone 16 years of age or older who is not classified as employed is classified as unemployed.
6) An unemployment rate of 10% means that the average worker has been unemployed for 10% of the year.
7) If labor markets were perfectly efficient, the unemployment rate would fall to zero.
8) The natural rate of unemployment in the economy is determined by the Congress and the president of the country.
9) The natural rate of unemployment varies based on inflation rates.
10) The Consumer Price Index is a fixed-weight index.

New e-commerce businesses,including companies like eBay, focus on voluntary exchange. which generalization Best describes this type of commerce?

Assume the interest rate fall. Under what circumstance will it lead to a)A large rise in business investment
B) little or no change in business investment

Under what circumstance would you expert a rise in national income to cause a large accelerator effect