Macroeconomics Answers

A. If the government decides to increase personal income tax to raise its tax revenue, what will be the impact on the economy?

1. Both the price level and the equilibrium level of real output will decrease
2. Both aggregate demand and aggregate supply will increase
3. Price level will increase, and total production will decrease
4. Price level will decrease, and total production will increase

B. If the AS curve shifts to the left as productivity decreases, it will result in a combination of....

1. Lower output, higher unemployment, and higher inflation
2. Lower output, lower unemployment, and lower inflation
3. Higher output, lower unemployment and lower inflation
4. Higher output, higher unemployment, and higher inflation

the equilibrium level of income is R17000m. The full-employment income is R22000m and the marginal propensity to consume is 0,8. By how much should the investment expenditure change to bring national income to full-employment equilibrium

How can a country stop the devaluation of their currency during exogenous macroeconomic shock (COVID-19)?

Assume that the real exchange rate is equal 4 US goods/CAN goods. Also, assume that P
US = 1 and P CAN = 2
as well as that there are no transportation costs and all goods are tradable. Suppose that there is a Canadian investor looking to invest C$1, 000 by buying goods in one market and selling them in the other. What is the maximum profit the investor can make if she takes advantage of the arbitrage opportunity (express profits in C$)?

Assuming a consumer consumes commodity X1 to the power of one and half quantities and 1 quantity commodity X2 after spending $3 on X1 and $4 X2.
i.Compute the optimum quantities of X1 and X2 that gives the consumer highest level of satisfaction.

ii.Algebraicaly verify if the suficient condition is met using relevant Hessian Bordered Matrix.

Suppose that: C = 200 + 0.8 Y find:

1) MPC will equal

1) which of the following is incorrect about imports in Keynesian model?
• they not always taken as independent of the level of income
•increase when the level of income increases
•decrease when the level of income increases
•

WXYZ is a nation run by an elected government. WXYZ is also having trade relation with many other states. Explain a hyoothetical circular flow of income for WXYZ with the help of a diagram.

Suppose you currently live and work in​ Cleveland, earning a salary of ​$70 comma 000 per year and spending ​$20 comma 000 for housing. You just heard that you will be transferred to a city in California where housing is 50 percent more expensive. In negotiating a new​ salary, your objective is to keep your real income constant.  
Your new target salary is ​$
nothing. ​(Enter your response rounded to the nearest dollar.​)