Macroeconomics Answers

Explain the following carefully: “A change in the price level shifts the aggregate expenditures curve, but not the aggregate demand curve.” Include graphs as part of the analysis

With the aid of well labeled diagrams, explain cost push and demand pull inflation

C=0.9yd
I=1000
G=1000
T=2000
Tr=500

. During 2002, real GDP in Japan rose about 1.3 percent. During the same period, retail sales in Japan fell 1.8 percent in real terms. What are some possible explanations for retail sales to consumers falling when GDP rises?

May I ask how does a low unemployment affect the other macroeconomic objectives?
Also, may I ask what are the demand and supply-side suggestions for a low inflation rate?

Many African countries are struggling with the level of unemployment especially youth unemployment. In Zambia the government has come up with various initiatives to combat youth unemployment such as the youth fund.
a) Define and calculate the unemployment rate for Zambia given the information below:
Number of inhabitants: 10 million
Labour-force participation: 62 %
Unemployed persons: 455'000
b) Using the information in (a) calculate the participation rate and define it.
c) List and briefly explain any four types of unemployment.

There are various methods in literature that countries use in calculating national income. Assume a simple economy that produces only two goods; maize and fish. Using 2015 as the base year.

Goods 2015 2016 2017 2018
Maize Quantities 700 900 1000 950
Fish Quantities 500 1000 900 750
Price of Maize K65 K70 K80 K90
Price of Fish K50 K70 K90 K120
Nominal GDP
Real GDP


a) Fill in the missing cells in the above table. Clearly show your work.

b) Find the growth rate of nominal GDP for 2016, 2017 and 2018.
c) Find the growth rate of real GDP (using 2015 K) for 2016, 2017 and 2018.

d) Compute inflation using GDP deflator (using 2015 K) for 2016, 2017, and 2018.
e) What are the major differences between the GDP deflator and the CPI?

Briefly explain the difference between an Australian Government budget deficit and a budget surplus

“A change in the price level shifts the aggregate expenditures curve, but not the aggregate demand curve.”

In 2012 the U.S. exchange rate with the European Union was reported as 1.2859 ($/Euro). The rate in 2013 was reported as 1.3281 ($/Euro) (sources: Economic Indicators and FRED). Briefly assess the implications of this exchange rate change for U.S. exports and imports with the European Union.