Macroeconomics Answers

an increase in the tax rate in the Keynesian model will
(1) shift the aggregate spending curve upwards in a parallel way
(2) shift the consumption curve upwards in a parallel way
(3) not affect the aggregate spending curve
(4) swivel the aggregate demand curve downwards

5. Suppose there is an increase in the population growth rate.
a. Show graphically how this affects the growth rate of both output per capita and total output in the short and the long run. Briefly explain your answer (Hint: Use a diagram like Figure 3-5.)
b. Chart the time paths of per capita income and the per capita capital stock following this change. Briefly explain your answer (Hint: Use a diagram like Figure 3-6.)

Discuss and critically evaluate three (3) determinants of price elasticity of demand with reference to the manufacturing and service industry

Calculate nva at fc
Sales =1000
Output used for self cons.by owner =100
Decrease in stock =1500
Purchase of material=500
Electricity charges=30
Depreciation=60
Ecxise duty=20
Income =10

By referring to a minimum of three factors, comprehensively discuss how firms in the service industry can achieve economies of scale. Include in your discussion the potential disadvantages of the mentioned factors.

The number of hours you decide to study each week for your biology class is an economic decision.


True

False

You are the curator of a butterfly sanctuary. The sanctuary is running low on funds, so you decide to increase revenue. What options should you consider? Should you raise or lower the price of admissions? Explain your reasoning in terms of demand and elasticity.

Assume that a five percent (5%) increase in the price of a product leads to a ten percent (10%) drop in the quantity demanded for the product. Describe in full what type of good this will be defined as, according to the theory of price elasticity of demand. Motivate your answer.

(a)Explain four factors that cause a shift in the LM curve.
(b) Using a clearly labelled diagram, discuss the effects of a contractionary monetary policy.

Assume the following information is given about an economy:
Marginal propensity to consume (mpc) = 0.50
Marginal propensity to tax (mpt) = 0.10
Marginal propensity to import (mpm) = 0.30
Investment injection = $100 million

(i) Calculate the value of the multiplier. (5)
(ii) Calculate the change in equilibrium level of national income. (5)