Macroeconomics Answers

Whats the macroeconomic logic for the existence of a Laffer curve for seignorage and the limits it imposes on monetary and fiscal policy?

Bases on the IS-LM model, analyse the impact of a positive shock to government expenditure, focusing on the response of GDP, consumption, private savings, investment, government budget balance, public debt;

If more Canadians adopted a “live for today” approach to life, how would this affect saving, investment, and the interest rate? /2

Whats the main advantage of optimal solution approach (in which its given more utility to consumption today than tomorrow) over the golden rule (in which the utility from consumption its assumed to be equal among the periods) in the maximization consumption problem?

Trace through with the assistance of diagrams, the effect of a fall in the money supply on investment demand and aggregate demand. What will happen to real GDP, unemployment and inflation? What factor(s) will determine the effectiveness of this policy

Draw an aggregate demand/aggregate supply diagram where equilibrium occurs below full employment level of output. Now show the impact of a leftward shift in the aggregate supply curve. What developments might cause such a shift

an early frost destroys a large percentage of the grape crop in British Columbia, how would this be expected to affect the market for Canadian wine, the market for beer, a substitute good, and the market for cheese, a complementary good?

Adam Smith remarked in “The Wealth of Nations’ concerning the balancing of the government budget. “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom” What problems might there be if the government decided to follow a balanced budget approach to its spending.

Draw an aggregate demand/aggregate supply diagram where equilibrium occurs below full employment level of output. Now show the impact of a leftward shift in the aggregate supply curve. What developments might cause such a shift?

Trace through with the assistance of diagrams, the effect of a fall in the money supply on investment demand and aggregate demand. What will happen to real GDP, unemployment and inflation? What factor(s) will determine the effectiveness of this policy.