Macroeconomics Answers

The rate of interest is a price:
a. Of what is it the price? (1 mark)
b. What determines this price? (Sketch a relevant graph of the money market). (2 marks)
c. What factors influence the demand for money? (2 marks)
d. What factors influence the supply of money? (2 marks)
e. 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 rate of interest is a price:
a. Of what is it the price? (1 mark)
b. What determines this price? (Sketch a relevant graph of the money market). (2 marks)
c. What factors influence the demand for money? (2 marks)
d. What factors influence the supply of money? (2 marks)
e. 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 rate of interest is a price:
a. Of what is it the price? (1 mark)
b. What determines this price? (Sketch a relevant graph of the money market). (2 marks)
c. What factors influence the demand for money? (2 marks)
d. What factors influence the supply of money? (2 marks)
e. 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)

a. Work through the problem below and show working for all variables (1-10) in addition to
totals of columns and rows in the matrix. (10 marks)
C = 300 + 0.8YD (Private consumption)
YD = Y + TR – T (Private Disposable income)
T = 80 + 0.1Y (Total taxes)
G = 300, TR = 100 (Gov. expenditure and transfer payments respectively)
I = 450 (Private investment)
X = 200 (Total exports)
IM = 120 + 0.2Y (Total imports)
Y = C + I + G + X – M (Goods Market Equilibrium condition)
Policy variables: Fiscal policy (G, t and TR), Monetary Policy: (N/A)

Suppose you are recommending monetary policy. The economy is experiencing a sharp and prolonged inflationary trend.
a. What change in open market operations would you recommend? (1 mark)
b. Explain how the change you advocate would affect the cash rate. (2 marks)
c. Explain how the change you advocate would affect the cost and availability of credit.
(2 marks)
d. Use diagrams/graphs of the money market and also AD-AS to support your discussion

The rate of interest is a price:
a. Of what is it the price? (1 mark)
b. What determines this price? (Sketch a relevant graph of the money market). (2 marks)
c. What factors influence the demand for money? (2 marks)
d. What factors influence the supply of money? (2 marks)
e. 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)

What determines this price? (Sketch a relevant graph of the money market.
What factors influence the demand for money?
d. What factors influence the supply of money?
e. If the money market is in short-run equilibrium, explain the adjustments that will take place for: i) an increase the in money supply.

ii) increase in the demand for money
this are my questions.

The rate of interest is a price:
a. Of what is it the price?
b. What determines this price? (Sketch a relevant graph of the money market).
c. What factors influence the demand for money?
d. What factors influence the supply of money?
e. If the money market is in short-run equilibrium, explain the adjustments that will take place for:
i) an increase the in money supply
ii) increase in the demand for money

Suppose you are "recommending" monetary policy. The economy is experiencing a sharp and prolonged inflationary trend, What change in open market operations would you recommend?

Is there an apparent relationship between low savings ratios and the ratio of foreign debt
to GDP? Explain.