Macroeconomics Answers

Classify the following examples as either an export of a good or service, import of a good or service, primary income payment, primary income receipt, or unilateral transfer, all from the perspective of the United States.
A) A U.S. investor earns a dividend from his investment in a British stock
B) A Canadian national living in the U.S. sends some money home to her family
C) A Japanese airline company purchases a new airplane from an American company D) An American construction company purchases lumber from a Canadian firm

Using a Currency Supply-and-Demand diagram, show the effect of the following scenarios on the equilibrium exchange rate and explaining whether the exchange rate has depreciated or appreciated. Explain in 1-2 sentences how you arrived at your answers.
A) The interest rate in the U.S. increases relative to the British interest rate (market: U.S. dollars) B) The price level in Mexico declines relative to the U.S. price level (market: pesos)
C) The price level in Canada increases relative to the U.S. price level (market: dollars)
D) The demand for Japanese imports into the U.S. increases (market: Yen)

nominal gdp when real gdp is 2,500 and gdp deflator is 140

Suppose that the public’s taste changes in such a way that leisure comes to be more desirable than commodities. How would you expect such a change to affect output, employment, and the real wage in the classical model?

Suppose there are two groups, Group W and Group P:
 Group W: people in group W like to take financial risks, and therefore have a high tolerance for holding foreign assets
 Group P: people in group P do not like to take financial risks, and therefore do not hold any foreign assets
Now suppose there is an increase in inequality: Wealth shifts away from Group P and toward Group W, so that a larger share of wealth is held by Group W.
What effect would this increase in inequality have on the real exchange rate? On gross exports? Defend your answers.

a.A small business owner is deciding whether to purchase new machinery for her business. She would charge the cost of the machine to her credit card, which charges 22.9 percent interest. It is a “pass- through” business; what she earns in her business is her personal income. Money she spends on the business is money she doesn’t have available to spend on herself and her family. Which inflation rate is relevant in estimating her real rate of interest? Why?
b. The investment equation is

What is the effect of rising uncertainty on stock prices? Use a derivative to show the effect.
What is the effect of rising earnings on stock prices? Use a derivative to show the effect.

With regards to deriving the IS curve mathematically. ( in a closed economy with a govt)

The answer is Y= Ac - er + c( Y -T ) + Ai -dr + G

I am trying to fully understand this can you assist, am i correct in saying:-

The Consumption part is Ac - er +c
The Investment part is Ai - dr

Ac and Ai i assume are aggregate consumption and Aggregate investment
But what is er ? and what is dr ? ( r being the interest rate) , but what exactly is e and d ?

I am taking a guess , but is dr the interest accrued on inventories ? Not sure on er

Thanks for assistance

What goods and services count towards GDP

How would you adjust the price of the 1962 TV to allow for the difference in quality from the 2012 model? Was it half good? A tenth as good? Is something you can even start to put a number on?