Macroeconomics Answers

An increase in money supply could result if there is
[1] a decrease in import payments
[2] an increase in capital outflows
[3] a decrease in export earnings
[4] an increase in government’s deposits with the reserve bank

Do you agree with the following statement: “The price of electricity is going up; therefore we are experiencing inflation”?

Identify and define the macroeconomic variables that can be used to measure whether
the strategy was successful or not.

The core elements of the Growth Employment and Redistribution (GEAR) strategy of the South
African government in 1996, under the leadership of the then finance minister Trevor Manuel were
amongst other things:
 budget reform to strengthen the redistributive thrust of expenditure
 monetary policy to prevent a resurgence of inflation
 a reduction in tariffs to contain input prices and facilitate industrial restructuring,
compensating partially for the exchange rate depreciation
1.1 With reference to the above, identify the macroeconomic objectives in these elements.

If C=1000+3/5y
S=4000+0.1y
G=2400+0.15y
X=2600x0.15y
M=1000+0.1y

1. determine the equilibrium income level of the given letter
2. What are the actual value at G, I GxM

Peanut crops have been destroyed by a fungus. Consumers are substituting almond butter for peanut butter because they perceive it to be a healthier option. The prices of both peanut butter and almond butter are rising. Why?

The core elements of the Growth Employment and Redistribution (GEAR) strategy of the South
African government in 1996, under the leadership of the then finance minister Trevor Manuel were
amongst other things:
 budget reform to strengthen the redistributive thrust of expenditure
 monetary policy to prevent a resurgence of inflation
 a reduction in tariffs to contain input prices and facilitate industrial restructuring,
compensating partially for the exchange rate depreciation
1.1 With reference to the above, identify the macroeconomic objectives in these elements.
(3 marks)
1.2 Identify and define the macroeconomic variables that can be used to measure whether
the strategy was successful or not. (6 marks)

1.3 With each tool in 1.2, provide a detailed explanation on how it can be measured.
(11 marks)

Suppose that the public taste changes in such a way that leisure comes to more desirable than commodities How do you expect such a change to affect output, employment and real wages in the classical model?

Due to higher inflation why cannot we measure growth in the income levels of the population living below poverty line accurately?

Basically, inflation has been a challenging aspect
of policymaking in India because of its level (i.e.,
range in which it dwindles) and stability (how
stable it has been). In such situations growth in
the income levels of the population living below
the poverty level (BPL) can never be measured
accurately (due to higher infation the section will
show higher income) and the government will
never be able to measure the real impact of its
poverty alleviation programmes.
Here 1) how the range of inflation dwindles and what is the meaning of dwindles?
2) how and why higher inflation of the poor show higher income?
3) what is the relation of measuring national income in current prices with below
the poverty level (BPL) and poverty alleviation programmes?
4) How and why national income in current prices during inflation not measured in poor sections and poverty alleviation programs?