Macroeconomics Answers

Problems with tight fiscal policy

Problems with the Inflation Targeting System

The short-run total cost function of a firm that employs labour (L) and fixed capital is given by c = vKo + wq^1/B × Ko^ -a/B

Where w is the cost of the labour and v is the cost of capital

(I) Derived the marginal cost of the firm

ii. Assuming that the firm is a price taking one that sells its output at p per unit, derive the short-run supply function of the firm

iii. If there are 200 firms in the industry with similar cost conditions, compute the total market supply.

The short-run total cost function of a firm that employs labour (L) and fixed capital is given by c = vKo + wq^1/B × Ko^ -a/B Where w is the cost of the labour and v is the cost of capital (I) Derived the marginal cost of the firm ii. Assuming that the firm is a price taking one that sells its output at p per unit, derive the short-run supply function of the firm iii. If there are 200 firms in the industry with similar cost conditions, compute the total market supply.

What is the group that will eventually have to bear the cost of the government’s expenditure on the subsidy?

Suppose investor A has $20 000 in his account and drives 4 utiles of utility from this amount and would derive 5 utiles if he had $40 000.He is faced with a choice to invest the $20 000 in a project that has 60% of earning a profit of 20 000 and 40% probability of losing $20 000? 1. Is the manager likely to invest in project?

it Is often suggested that the Bank of Canada tries to achieve zero inflation. If we assume that velocity is constant, does this zero inflation goal require that the rate of money growth equal zero? If yes, why? If no, then what should the rate of money growth equal?

A.in the Keynesian model,suppose a depreciation of the South African rand against the US dollar leads to an increase in exports. What will happen to the aggregate spending curve if imports remain unchanged 1.it will stay the same 2.it will shift upwards 3it will shift downwards 4the slope becomes flatter B.which of the following will increase the size of multiplier 1.an increase in government spending 2.an increase in marginal propensity to consume 3.an increase in the marginal propensity to save 4.an increase in autonomous spending

Given 35.9million as working age population, 4.6million are part time workers and 15.71million working full time. 3.2million job search happened in less than 2 weeks ago among non workers, 1.72million most recently looked for work between 2 & 4 weeks ago. An additional 0.86million most recently looked for work 5weeks ago and 9.81m who don't have jobs have not looked for work in the past 6 weeks.

1. Size of the total labour force

2.How many people are unemployed?

3. labour force participation rate?

4. What is the unemployment rate?