Macroeconomics Answers

If the economy had a greater share of women economists, could the economy benefit more than women economists?

One of the main macroeconomic objectives of any country in the World is economic growth as measured by the gross domestic product (GDP) per capita from one year to the other. However, the fast growth rate of the Latvia economy created significant macroeconomic imbalances.
1.1 Discuss the costs and benefits for Latvia following the transitioning from a planned to a market economy.

CPI and Inflation
There are three goods in the consumer basket. The fixed quantities are these goods, which the consumer buys, are as follows: ​Food=60 units, Movies=40 units, and Clothing=90 units. Over a four-year period, the prices of these goods, P​F,​ P​M​ and P​C​ (in dollars) are given below:
​​​Year
Price of Food (P​F)
Price of Movies (P​M)
Price of Clothing (P​C)
1991 15 14 25
1992 16 15 26
1993 17 16 30
1994 20 17 32
Assume that 1992 is the base year.
(i) Calculate the Consumer Price Index for each of the four years
(ii) Calculate the annual inflation rate over the period, starting with 1992, compared to the year before
(iii) If a person were paid 100 000 in 1991, how would she be paid in order to achieve the same level of purchasing power in 1993?

Which one of the following statements about the demand for money is incorrect?

[1] As the income level increases, the amount of money that individuals hold, decreases.
[2] The quantity of money that people hold is negatively related to the interest rate level.
[3] The income level and the interest rate level affect the quantity of money.
[4] An increase in the interest rate leads to a decrease in the quantity of money created

Draw the graph facing an oligopoly market and briefly explain why it's shape is like that.

A. Which of the following is likely to shift the consumption schedule downwards?

1. Expectations of a fall in interest rates
2. Consumer prices are expected to fall
3. Currently less stock of durable goods in the possession of consumers
4. The expectation of a future rise in the consumer price index

B. Which of the following statement is correct about the introduction of taxation in the Keynesian model?

1. It increases the value of the multiplier
2. It shift the aggregate expenditure curve upwards
3. It increases net exports
4. It swivels the aggregate expenditure curve downwards

A. An increase in government spending in the Keynesian model leads to...

1. Demand that is greater than supply
2. Demand that is lesser than supply
3. Demand that equals supply
4. Decrease in production

B. 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
3. It will shift downwards
4. The slope becomes flatter

A. Equilibrium level of income is that at which

1. The budget is balanced
2. The balance of payment is in equilibrium
3. The economy is at full employment level of income
4. There is no tendency of national income to change

B. In the simple Keynesian model with no government and external sector, if an increase in investment expenditure of 150 results in a final increase in income of 600, it follows that the marginal propensity to consume must be

1. 0,2
2. 0,75
3. 0,25
4. 0,8

What are the major objectives of macroeconomics

Initially, suppose Arcadia uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce rye, while Felicidad uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce rye. Consequently, Arcadia produces 8 million pairs of jeans and 48 million bushels of rye, and Felicidad produces 15 million pairs of jeans and 20 million bushels of rye. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye it produces.
Arcadia's opportunity cost of producing 1 pair of jeans is of rye, and Felicidad's opportunity cost of producing 1 pair of jeans is of rye. Therefore, has a comparative advantage in the production of jeans, and has a comparative advantage in the production of rye.