Macroeconomics Answers

Calculate net value added at factor cost of:
Purchase machinery: 100
Sales:200
Intermediate cost:90
Indirect tax:12
Change in stock:10
Excuse duty:6
Stock of raw material:5

Explain psychological law of consumption

Use the IS/LM/PC and Solow models to speculate on the potential short, medium and long
terms impacts of Brexit on the UK economy? Briefly comment on why this analysis should
matter for Ireland.

There are seven producers in a small closed economy: producers of steel, machinery, rubber, tires, glass and cars and car dealers. Manufacturer of steel sells the steel to the producer of machines for 2 000 $ and to the carmaker for 3 000 $. The machine manufacturer sells its products to the producers of: cars (for 4 000 $), tires (for 2 000 $) and glass (for 1 000$). To produce cars, apart from steel, the producer of cars buys: tires (2 000$), glass (1 000$). It sells the cars to the car dealers for 12 000 $. The tire manufacturer buys gum for 1000 $. Car dealer sells the cars to consumers for 16 000$.

Meaning of wages indexation with diagram?

5. Using the relations among accounting categories demonstrated in the tables and identities in the text, use the following information on values (measured in Neverlandian pesos) from the country of Neverland in 2010 to find values for the following categories:
household and institutions spending = 650 household and institutions production =150
net income payments from the rest of the world = 5 nonprofit institutions production = 50
state and local government spending = 30
change in private inventories = 2
depreciation = 60
business spending = 50
exports = 225
imports = 125
government production = 200
statistical discrepancy = 0
GDP = 850

to find values for the following categories:
a. private household production
b. business production
c. fixed investment spending (by business)
d. federal government spending
e. national income

Assume that in a labor market, labor demand is given by LD=60-3W and labor supply is given by LS=25+2W where W is the real wages of workers.
a. Draw labor demand and labor supply curves in the W-L space by clearly labelling each curve.
b. Find the equilibrium wage and equilibrium quantity of labor.

Classical economists assumed that velocity was stable in the short run. But suppose that, because of a change in the payments mechanism, for example, greater use of credit cards, there was an exogenous rise in the velocity of money. What effect would such a change have on output, employment, and the price level within the classical model?

C.O.E= 1000

RENT=250

INTEREST=150

PROFIT=450

GROSS DOMESTIC CAPITAL FORMATION =200

NET DOMESTIC FIXED CAPITAL FORMATIO =100

NET INDIRECT TAX =100

EXPORT =50

FACTOR INCOME FROM ABROAD =30

GROSS NATIONAL PRODUCT AT FACTOR COST =150

CHANCE IN STOCK =50

CALCULATE GDPmp and NET FACTOR INCOME TO ABROAD

Changes in the dollar-peso exchange
B) Suppose the price level in the U.S. is 100 and the price level in Mexico is 50. What is the real exchange rate of the dollar in terms of pesos?
C) Suppose the nominal exchange rate now changes to 1 dollar = 15 pesos. Is this an appreciation or depreciation of the dollar against the peso?
D) Calculate the real exchange rate if the exchange rate is 1 dollar=15 pesos and the price level in the U.S. is still 100 and the price level in Mexico is still 50.
E) Suppose the information in part D is still true (1 dollar=15 pesos), except the price level in Mexico is now 25 (instead of 50). The price level in the U.S. is still 100. Calculate the new real exchange rate given this information.
F) Compare the change in the nominal exchange rate (from 1 dollar = 20 pesos to 1 dollar = 15 pesos) to the change in the real exchange rate between the answers you found in parts D and E. Which change was larger in magnitude?