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Macroeconomics
Which of the following factors will increase the size of the multiplier?
1. An increase I'm government spending.
2. An increase in the marginal propensity to consume.
3. An increase in the marginal propensity to save.
4. An increase in autonomous spending.
1. An increase I'm government spending.
2. An increase in the marginal propensity to consume.
3. An increase in the marginal propensity to save.
4. An increase in autonomous spending.
Macroeconomics
The equilibrium level is R17 000m. The full employment income is R22 000m and the marginal propensity to consume is 0,8. By how much should the investment expenditure change to bring nations income to full employment equilibrium?
Macroeconomics
Which of the following statements are correct about the 45-degree line?
1. A negative relationship exists between aggregate spending and aggregate income.
2. At any point above the 45-degree line, there is excess supply of goods and services.
3. When aggregate spending is greater than total production, firms experience an unplanned increase in their inventories and respond by lowering their production.
4. The 45-degree lime shows the equality between the variable measured on the vertical axis and the variable measured on the horizontal axis.
1. A negative relationship exists between aggregate spending and aggregate income.
2. At any point above the 45-degree line, there is excess supply of goods and services.
3. When aggregate spending is greater than total production, firms experience an unplanned increase in their inventories and respond by lowering their production.
4. The 45-degree lime shows the equality between the variable measured on the vertical axis and the variable measured on the horizontal axis.
Macroeconomics
According to the Department of Labour’s new rates, domestic workers working in Area A (bigger metropolitan areas) who work more than 27 ordinary hours per week, must be paid a minimum of R13,69 per hour.
Workers who work fewer than 27 hours per week, must be paid a minimum of R16,03 per hour.
This will mean that a domestic worker who works 45 hours per week will now earn a minimum of R2 669,24 a month.
Gardeners, drivers or people who look after children, the aged, sick, frail or disabled in a private household, all qualify as domestic workers.With the aid of a diagram, discuss the welfare effect of this new legislation if the new minimum wage is (1) below the equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable.
Workers who work fewer than 27 hours per week, must be paid a minimum of R16,03 per hour.
This will mean that a domestic worker who works 45 hours per week will now earn a minimum of R2 669,24 a month.
Gardeners, drivers or people who look after children, the aged, sick, frail or disabled in a private household, all qualify as domestic workers.With the aid of a diagram, discuss the welfare effect of this new legislation if the new minimum wage is (1) below the equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable.
Macroeconomics
The cost of production in the South African economy accelerated, due to rising prices of electricity and petrol in the country, which led to an increase in the prices pf domestic goods and services related to foreign goods and services. This is likely to lead to a... 1. increase in the net export and aggregate spending in the SA economy. 2. increase in the demand of SA goods by foreign countries. 3. increase in the quantity of goods and services demanded in the SA economy. 4. decrease in the quantity of goods and services demanded in the SA economy.
Macroeconomics
A. Which of the following best describes the relationship illustrated between the aggregate demand (AD) curve? 1. the inverse relationship between price and quantity demanded for any product. 2. the negative relationship between the price level and levels of total production. 3. it shows no relationship between the price level and real GDP demanded. 4. the inverse relationship between the price level and real output demanded.
B. Aggregate spending will increase if... 1. real wealth falls. 2. interest rate falls. 3. consumption falls. 4. investment falls.
B. Aggregate spending will increase if... 1. real wealth falls. 2. interest rate falls. 3. consumption falls. 4. investment falls.
Macroeconomics
Suppose the government increases the expenditure . Use the IS - LM model to show the impact of the increase in government expenditure under two assumptions :
i. The government keeps interest rates constant through an accomodating monetary policy.
ii. The money stock remains unchanged.
Use suitable diagram
i. The government keeps interest rates constant through an accomodating monetary policy.
ii. The money stock remains unchanged.
Use suitable diagram
Macroeconomics
1) Suppose a perfectly competitive labour market has a demand curve of LD = 120 − 2w and a supply curve of LS = 8w, where w is the wage rate is dollars and L is the quantity of labour in person-hours
a) What are the equilibrium values of the wage and employment?
b) Suppose the government imposed a minimum wage of $14 per hour. Now what are the equilibrium values of the wage and employment?
c) Repeat part (a), assuming now that the market is a monopsony.
d) Repeat part (b), assuming now that the market is a monopsony.
e) Does the imposition of the minimum wage decrease employment here under perfect competition? What about under monopsony? Give a brief intuitive explanation for your answer and why it may be different under the two different market structures.
a) What are the equilibrium values of the wage and employment?
b) Suppose the government imposed a minimum wage of $14 per hour. Now what are the equilibrium values of the wage and employment?
c) Repeat part (a), assuming now that the market is a monopsony.
d) Repeat part (b), assuming now that the market is a monopsony.
e) Does the imposition of the minimum wage decrease employment here under perfect competition? What about under monopsony? Give a brief intuitive explanation for your answer and why it may be different under the two different market structures.
Macroeconomics
With the help of Lucas' model, show how supply and demand shocks are mitigated in the presence of rational expectations and Lucas' supply curve.
Macroeconomics
How does the 'efficiency wage' prevent the economy from achieving full-employment?
