Macroeconomics Answers

Within the classical model, analyze the effects of an increase in the marginal income tax
rate. Explain how output, employment, and the price level are affected. Consider cases in
which the increased revenue produced by the tax increase results in a decline in bond sales
to the public and in which it results in lower money creation.

What is the effect of backward bending supply curve on output employment and real wages

Are following C(consumption); I investment; G( Government); Net imports or not a component of national account from expenditure side. Brief explanation why.
A) Vancouver stock exchange sales in January are $2 billion:
B) Norbert buys “as is” a used Harley Davidson motorcycle from his cousin Ella.
C) Toyota Camry increase is inventory holdin Toyota Canada increases its inventory holding off instrumentation panels, ( IPs) produced in Kitchener

Suppose that the economy of Stormwind has the following​ features:
The level of private saving is ​$150.
The level of investment expenditure is ​$150.
The level of exports is ​$100.
The level of imports is ​$150.
If​ Stormwind's economy is in​ equilibrium, the level of public saving would be equal to ​$
nothing. ​(Round your response to the nearest​ dollar.)
The level of public saving shows that the government in Stormwind has a budget
▼
deficit
surplus
.
If the level of government purchases is ​$150 in​ Stormwind, the level of taxes must be ​$
nothing. ​(Round your response to the nearest​ dollar.)

The population of the world in 2003 was 6.314 billion. It grew between 1975 and 2003 at an annual rate of 1.6%. Assume that it continues to grow at this rate.
a. Compute the doubling time.
b. Estimate the world population in 2048 and 2093 (assuming all other things remain unchanged).

PS Note: Am in particular after the solutions to part e and f


The following equations describe a small open economy.
[Figures are in millions of dollars; interest rate (i) is in percent]. Assume that the price level is fixed.

Goods Market Money Market
C = 250 + 0.8YD L = 0.25Y – 62.5i
YD = Y + TR – T Ms/P = 250
T = 100 + 0.25Y
I = 300 – 50i
G = 350; TR = 150

Goods market equilibrium condition: Y = C + I + G + X-M
Money market equilibrium condition: L = Ms/P

a) If you were your Reserve Bank advisor, what would you recommend the Reserve Bank to do to keep the interest rate constant?
b) Show the impact of the above d) and e) on the IS-LM framework. Would the IS curve now relatively flatter or steeper and why?

30. Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.

An increase of the marginal propensity to spend out of national income will cause a parallel shift of AE curve”. Is this statement true or false? Please explain if it is false.

Which of the following is not a source of economic growth
1)capital widening
2)imports
3)government spending
4)natural resources