Macroeconomics Answers

Which of the following is likely to shift the consumption schedule downwards?
1. Expectations of a fall in interest rates
2. Consumer prices are expected to fall
3. Currently less stock of durable goods in the possession of consumers
4. The expectation of a future rise in the consumer price index

What would happen to multiplier and output if propensity to consume is greater than one

The table below shows the GDP and population figures for a country.
Year Real GDP (R million) Population (million persons)
2018 490 26
2019 480 28
What is the economic growth rate and real GDP per capita for 2019?
[1] -2,04%; R17,14
[2] 2,04%; R18,85
[3] 2,08%; R17,96
[4] -2,08; R17,96
4.20. To boost economic growth the government is most likely to…
[1] reduce personal income tax.
[2] increase taxes.
[3] provide incentives to save (e.g., tax-free investment)
[4] increase minimum wages in the private sector.

Question :A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. Analyze the effects on the country’s current account balance, national saving, and investment, and on domestic and world real interest rates. Assume that, before the capital controls were imposed, the large country was running a capital and financial account surplus.

Assuming that the government decides to lower the level of production and employment caused by the covid 19 by cutting down taxes (personal income and corporate taxes) explain by the use of graph, the impact of such fiscal policy on aggregate output. In your explanation, describe the interaction between the money market is-lm and ad-as model

C=100+0.80Y,what is the savings function in the simple Keynesian model?
1. S=-100+0.20Y
2. S= 100+0.20Y
3. 0.20
4.5

Assuming that the central government decides to cut taxes by R100 billion to
stimulate the economy. The relevant marginal propensity to consume is 0.6 (60
percent). What will be the impact of such fiscal policy on equilibrium GDP?

Suppose that the real GDP increase by R5,000 billion when government
expenditure on the construction of new roads increase by R1,500 billion. What is
the value of the marginal propensity to consume?

Assuming a private closed economy whereby the marginal propensity to
consume is 0.9 and investment spending decreases by R1000 billion. What will
be the change on equilibrium GDP?

f a R200 billion increases in investment spending creates R200 billion of new
income in the first round of the multiplier process and R160 billion in the second
round. Calculate:
a. the marginal propensity to consume (MPC).
b. the value of the expenditure multiplier in this closed economy.