Macroeconomics Answers

1.Which one of the following statements is correct?

a. a decrease in net exports will decrease the equilibrium level of income

b. an increase in the tax rate will increase the size of the multiplier

c. a change in the tax rate has no impact on the size of the multiplier

d. an increase in net exports will decrease the equilibrium level of income

2.Which one of the following statements is correct regarding the Keynesian model with the government sector and the foreign sector?

a. government expenditure is autonomous

b. exports and imports are a function of the interest rate

c. an increase in government expenditure will decrease the equilibrium level of income

d. a decrease in net exports will increase the equilibrium level of income

In the Keynesian model, tax revenue…

a. does not appear in the aggregate expenditure function because it is always equal to government expenditure.

b. is taken into account through its effect on consumption.

c. reduces equilibrium income because it reduces autonomous spending.

d. increases aggregate expenditure because government invariably increases its spending when taxes rise.

e. is taken to be fixed because government expenditure is taken to be fixed.

In a Keynesian model with a foreign sector, an increase in the domestic income level will_____.

a. increase both exports and imports.

b. increase exports and decrease imports.

c. leave exports unchanged and increase imports.

d. decrease both exports and imports.

In the full Keynesian model,a decrease in exports would result in what?

Explain how the fundamental economic problem is addressed in a planned economy and in a

market economy

 Under what circumstances may the demand for the commodity be inelastic?     

 Discuss the view that a market economy is always preferable to a planned economy.                                       

Consider how the economy has performed throughout your life. Identify a time you believed the economy was in a peak or a trough. When was the economy expanding? When was it contracting? Describe the overall trajectory of the economy throughout your life.

Explain the relationship between inflation and unemployment through the Phillips Curve.

What are the effects of minimum wage on labor market (both labor demand and labor supply)?