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Macroeconomics
what is a U.S. weak dollar?
Macroeconomics
What is the difference between gross domestic (GDP) and gross national product (GNP) and which is likely to be lower in developing countries? Why?
Macroeconomics
You are given the following data in billions of dollars on your country’s economy:
Investment – 140, Government spending = 120, Exports = 80, Imports = 60, Autonomous consumption = 100, marginal propensity to save = 0.30.
a) Compute the consumption and saving functions for this economy and indicate the assumptions used. (4 Marks)
b) Compute the equilibrium level of income. (4 Marks)
c) Determine the equilibrium level of consumption and savings. (2 Marks)
d) Define and compute the multiplier. (2 Marks)
e) You are given that the full employment level of national income is 733 billion. Would this economy be experiencing deflationary of inflationary gap? Why? What is the magnitude of the gap and what could the government do to remove it? (4 Marks)
f) The government decided to increase its spending by 50 billion. Compute the equilibrium level of income and explain why income has or has not changed from the original level. (4 Marks)
Investment – 140, Government spending = 120, Exports = 80, Imports = 60, Autonomous consumption = 100, marginal propensity to save = 0.30.
a) Compute the consumption and saving functions for this economy and indicate the assumptions used. (4 Marks)
b) Compute the equilibrium level of income. (4 Marks)
c) Determine the equilibrium level of consumption and savings. (2 Marks)
d) Define and compute the multiplier. (2 Marks)
e) You are given that the full employment level of national income is 733 billion. Would this economy be experiencing deflationary of inflationary gap? Why? What is the magnitude of the gap and what could the government do to remove it? (4 Marks)
f) The government decided to increase its spending by 50 billion. Compute the equilibrium level of income and explain why income has or has not changed from the original level. (4 Marks)
Macroeconomics
The following data relates to the market value of economic transactions for the three main sectors of your country’s economy.
SECTOR VALUE OF OUTPUT PURCHASES FROM OTHER FIRMS
Agriculture 300 160
Manufacturing 200 150
Services 150 120
Required:
(i) Compute the gross domestic product (GDP) and explain the method used and why. (2 Marks)
(ii) Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40.
Compute:
1) Gross national product (GNP) at market prices. (1 Mark)
2) Net national product (NNP) at market prices. (1 Mark)
3) Net national product (NNP) at factor cost. (1 Mark)
4) Net domestic product (NDP) at factor cost (1 Mark)
SECTOR VALUE OF OUTPUT PURCHASES FROM OTHER FIRMS
Agriculture 300 160
Manufacturing 200 150
Services 150 120
Required:
(i) Compute the gross domestic product (GDP) and explain the method used and why. (2 Marks)
(ii) Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40.
Compute:
1) Gross national product (GNP) at market prices. (1 Mark)
2) Net national product (NNP) at market prices. (1 Mark)
3) Net national product (NNP) at factor cost. (1 Mark)
4) Net domestic product (NDP) at factor cost (1 Mark)
Macroeconomics
In 1994, Canada signed a treaty known as NAFTA, the North American Free Trade Agreement. Which of these actions would MOST likely be addressed by NAFTA?
a) establishing an embargo on sugar cane imported from Cuba
b) eliminating tariffs placed on cars imported from the United States
c) creating quotas on all agricultural products made in Mexico
d) ending any trade barriers between Canada and the European Union
a) establishing an embargo on sugar cane imported from Cuba
b) eliminating tariffs placed on cars imported from the United States
c) creating quotas on all agricultural products made in Mexico
d) ending any trade barriers between Canada and the European Union
Macroeconomics
What is the difference between gross domestic (GDP) and gross national product (GNP) and which is likely to be lower in developing countries? Why? (4 Marks)
c) The following data relates to the market value of economic transactions for the three main sectors of your country’s economy.
SECTOR
VALUE OF OUTPUT
PURCHASES FROM OTHER FIRMS
Agriculture
300
160
Manufacturing
200
150
Services
150
120
Required:
(i) Compute the gross domestic product (GDP) and explain the method used and why. (2 Marks)
(ii) Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40.
Compute:
1) Gross national product (GNP) at market prices. (1 Mark)
2) Net national product (NNP) at market prices. (1 Mark)
3) Net national product (NNP) at factor cost. (1 Mark)
4) Net domestic product (NDP) at factor cost (1 Mark)
c) The following data relates to the market value of economic transactions for the three main sectors of your country’s economy.
SECTOR
VALUE OF OUTPUT
PURCHASES FROM OTHER FIRMS
Agriculture
300
160
Manufacturing
200
150
Services
150
120
Required:
(i) Compute the gross domestic product (GDP) and explain the method used and why. (2 Marks)
(ii) Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40.
Compute:
1) Gross national product (GNP) at market prices. (1 Mark)
2) Net national product (NNP) at market prices. (1 Mark)
3) Net national product (NNP) at factor cost. (1 Mark)
4) Net domestic product (NDP) at factor cost (1 Mark)
Macroeconomics
1. How is the Real exchange rate of seven years calculated?
2. How is the nominal and real effective exchange rate index calculated?
3. how is the nominal exchange rate of seven years calculated?
2. How is the nominal and real effective exchange rate index calculated?
3. how is the nominal exchange rate of seven years calculated?
Macroeconomics
Explain the effectiveness of credit channel of monetary policy transmission by comparing the reaction of non financial companies in India.
Macroeconomics
finding MPs from saving function
Macroeconomics
1. Why did housing prices rise rapidly during 2002-2005? Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the current recession began?
2. What happened to the credit standards (e.g. minimum down payment, mortgage loan relative to the value of the house, credit worthiness of the borrower) between 1995 and 2005? Why did the credit standards change? How did this influence the housing price bubble and later the default and foreclosure rates?
3. If owners have little or no equity in their houses, how will this influence the likelihood they will default on their mortgage? Why
4. When did mortgage default and housing foreclosure rates begin to rise rapidly? When did the economy go into the current recession? Was there a causal relationship between the two? Discuss.
2. What happened to the credit standards (e.g. minimum down payment, mortgage loan relative to the value of the house, credit worthiness of the borrower) between 1995 and 2005? Why did the credit standards change? How did this influence the housing price bubble and later the default and foreclosure rates?
3. If owners have little or no equity in their houses, how will this influence the likelihood they will default on their mortgage? Why
4. When did mortgage default and housing foreclosure rates begin to rise rapidly? When did the economy go into the current recession? Was there a causal relationship between the two? Discuss.
