Macroeconomics Answers

Uncertainty about future income does not affect consumption. Does this mean that the uncertainty does not effect expected lifetime utility?

If monthly inflation rate was 3% in January 2017, in January 2018 it was 2%. What was the annual in January 2018, if December 2017 has annualy 2%?

1. Suppose that a seller decreases price for his good by 5 percent show how total revenue changes when elasticity of demand =0.5
2. Assume that good A and good B are related goods and QB=1691-400PB+6PA-6Y. Suppose that PB=0.1 dollar, PA=0.3 Dollar and Y(income)=10 dollar then compute.
A. Price elasticity of demand for good B
B. Income elasticity of demand for good
B and explain nature of the good
C. Cross price elasticity of demand for
good B and explain nature of the good
whether they are substitute,
complementary, or unrelated.

If i took loan from a local bank in my country suddenly there is a decrease in inflation rate will i gain or lose money

How might the domestic transmission mechanism of monetary policy to inflation be weakened if long-term interest rates depend only on the balance between saving and investment at the global rather than domestic level?

If i took loan from a local bank in my country suddenly there is a decrease in inflation rate will i gain or lose money

Assume that the real exchange rate is equal 4(US goods/CAN goods). Also, assume that P
US = 1 and P
C AN = 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$1, 000 by buying goods in one market and selling them in
the other. What is the maximum profit the investor can make if she takes advantage of the arbitrage
opportunity (express profits in C$)?

b. The Phillips curve relates inflation and unemployment.
(i) Using the AD/AS model, discuss the changes to the economy that the Phillips curve explains well, and describe under what conditions the Phillips curve fails to explain economic behavior. Include graphs of the Phillips curve and the AD/AS model in your answer.
Answer:

(ii) In the late 1990s, the U.S. economy experienced a period of extremely low inflation and extremely low unemployment. Use the AD/AS model to explain what sort of change in the economy would cause this. Include a graphical analysis in your answer, and provide two examples of what might bring about this event.

(ii) Find the following macroeconomics data on yearly basis covers the period from 2008 to
2018. Arrange these data in the same table and state the source of the data in Switzerland.
 Nominal GDP
 Real GDP
 Inflation rate
 Population
 Unemployment rate
Question
1. Draw a graph base on your data, discuss
(a) The performance of the inflation rate for the period of 2008-2018.
(b) The theoretical model of the inflation.

1. Using a certain quantity of resources, workers in the fictitious country of Iguania can produce four bottles of penicillin or 12 loaves of bread. Using the same resources, workers in another fictitious country, Chamelia, can produce six bottles of penicillin or eight loaves of bread.
c. Complaints about "unfair trade practices" lead to a mutual embargo between these two countries. Who will gain and who will suffer because of this embargo?
Answer:

d. After a long embargo, if trade is resumed between these two countries, who would benefit the most from it?
Answer: