Macroeconomics Answers

Recently government of Turkey is willing to increase the demand for labor in the country. Write a
policy the government can use for this aim. Explain how according to neoclassical labor market
model, this policy will increase the demand. (Or alternatively, explain in which way neoclassical
model fail to capture the effect of the policy you mention.)

1-Use the model of the foreign exchange market to explain the relatively high value of the Australian dollar
2- Describe the adjustment to long run equilibrium if an economy experiences a
negative aggregate demand shock and the short run equilibrium output is below
potential output.

Suggest any two ways to reduce surplus

2. Use the graph below to answer the questions that follows














i. What is the equilibrium quantity?
ii. Suppose a minimum price control PM is impose on the commodity, calculate the surplus that will occur as a result of the policy.
iii. Suggest any two ways to reduce the surplus

Recently government of Turkey is willing to increase the demand for labor in the country. Write a
policy the government can use for this aim. Explain how according to neoclassical labor market
model, this policy will increase the demand. (Or alternatively, explain in which way neoclassical
model fail to capture the effect of the policy you mention.)

In which case, by replacing capital with labor is likely to increase the profits of a company?

You are the general manager of a firm that manufactures personal computers. Due to
a tough economy, demand for PCs has dropped 50 percent from the previous year. The
sales manager of your company has identified only one potential client, who has
received several quotes for 10,000 new PCs. According to the sales manager, the client
is willing to pay $800 each for 10,000 new PCs. Your production line is currently idle,
so you can easily produce the 10,000 units. The accounting department has provided
you with the following information about the unit (or average) cost of producing three
potential quantities of PCs:
10,000 PCs 15,000 PCs 20,000 PCs
Materials (PC component) $600 $600 $600
Depreciation 300 225 150
Labor 150 150 150
Total unit cost $1,050 $975 $900
Based on this information, should you accept the offer to produce 10,000 PCs at $800
each? Explain.

: The United Kingdom (UK) held a national referendum (vote) on whether the UK should remain in the European Union (EU) or should exit the EU. Exiting the EU is likely to have several consequences: (1) increased barriers to trade between the UK and the remaining EU countries; (2) Reduced refugee flows.
Use the AS/AD model to describe the short run and long run effect of the UK exit from the EU.

Given a hypothetical consumption function of the form:
Y = C + I0 + G0
C = α + βY^d
Where: Y^d = Y – T
Y = Income
T = Taxes
Compute the equilibrium level of income and consumption

suppose the demand curve for a product is given as Qdx =300-2p+4 i, where i is income.
The supply curve is Qs =3p-50
(a) if i =25, fine the market-clearing price
(b) if i =50, fine the market-clearing price
(c) present your results in a graphical diagram