Macroeconomics Answers

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If the working age population is 250 million, 170 million are employed and 9 million are unemployed, the unemployment rate is

a) 3.6%


b) 5.0%


c) 6.8%


d) 7.0%

Which of these is an indicator of increased economic growth in a nation?

a) increased job satisfaction


b) increased aggregate demand


c) increased welfare applications


d) increased transfer payments by the government

“I cannot believe the demand for Snoopy gear. Ever since Uno the Beagle, won Best in Show at the Westminster Dog show, we can’t keep the merchandise on the shelves. I think we can raise prices on this merchandise”. Please explain this statement.

In the economy of Keynesian Island, autonomous consumption expenditure is $50 million, and the marginal propensity to consume is 0.8. Investment is $160 million, government expenditure is $190 million, and net taxes are $250 million. Investment, government purchases, and taxes are constant−they do not vary with income. The island does not trade with the rest of the world.

a. Draw the aggregate expenditure curve. (7 marks)

b. What is equilibrium real GDP for Keynesian Island? (3 marks)

c. What is the size of the multiplier in Keynesian Island's economy? (2 marks)

d. If the government increases its purchases by $200 million, what will be the change in the economy's equilibrium real GDP? (3 marks)

under a free market in which the self-adjusting mechanism operates efficiently aggregate demand shocks generate real effects in the short and long run, why is this false

True or false & explain: Under a free market, in which the self-adjusting mechanism operates efficiently, aggregate demand shocks generate real effects in the short-and long-run.

How can fiscal policy counter a recession? Are budget deficits a problem? Is fiscal policy a reliable means for controlling the economy?

Expalin in simple words Nash equilibrium