Macroeconomics Answers

Use AD-SAS-LRAS graphs to show the effects of each event on Fiji's real GDP and the price level, starting from a position of long run(full employment) equilibrium

When we need money in Nigeria, why do we borrow money from other countries when we are going to pay interest rather than printing the money through Central Bank of Nigeria.

If reducing debt means spending cuts, will aggregate expenditure fall by more than, less than or exactly the same as the spending cuts? Explain

If the money market is in short-run equilibrium, explain the adjustments that will take place for:
i) an increase the in money supply (2 marks)

ii) increase in the demand for money (2 marks)

The table below gives contains hypothetical international balance of payment data for Australia.
All figures are in billions. Calculate the missing elements (i) – (vi), with the appropriate sign
(+ or -) and enter the values in the table.

Suppose that because of a recession, the real wage increases to (W/P) = 8 units. As a result the cyclical rate of unemployment will equal

percent and the real GDP will equal

units.

Use diagrams/graphs of the money market and also AD-AS to support your discussion.

Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.

If the money market is in short-run equilibrium, explain the adjustments that will take place for: i) an increase the in money supply (2 marks)
ii) increase in the demand for money (2 marks)

Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.