Macroeconomics Answers

To sustain in a perfectly competitive market, a firm should:

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand to verify your answers.

a. Supply decreases and demand is constant.

b. Demand decreases and supply is constant.

c. Supply increases and demand is constant.

d. Demand increases and supply increases.

e. Demand increases and supply is constant.

f. Supply increases and demand decreases.

g. Demand increases and supply decreases.

h. Demand decreases and supply decreases.

explain why the long-run macroeconomic equilibrium will always return to full employment according to new classical

What are some of the factors that cause wages to be inflexible (not change very easily and rapidly)?

Describe the four categories of economic resources. Which category of resources you and your family owned?

Define scarcity, choice and opportunity cost. Can you link them in your day to day lives?

Comparing the impact of a decrease in government spending in the goods market model with the impact of a decrease in government spending in the IS-LM model:

In an intertemporal optimizing model consumption, a consumer living from time zero (0) to time t has a longer utility: U (C)= ln C. The market interest rate is r and the consumer is assuming no inheritance.

Derive the consumption relationship and the marginal utilities between two adjacent periods.

Using a diagram, explain the time profiles of paths based on (i) above.

Show that consumption is proportional to the present value of future income at time zero (0) at a given interest rate.

Define Macroeconomics and shortly explain main issues of Macroeconomics?

Suppose a nation's 2003 nominal GDP was $972 billion and the general price index was 90. To make the 2003 GDP comparable with the base year GDP, calculate the 2003 GDP.