Macroeconomics Answers

Features of Ramsey model for decentralized households

Suppose the US imposes prohibitive tariffs on all Australian exports , and in exchange, Australia retaliates on all imports from the US. Assuming that this trade war lasts for at least one year, discuss policy implications. Focus on variables such as exchange rates, balance of payments, output, inflation, interest rates, etc. May discuss from a single country’s point of view (either Australia or US). Address briefly social and/or cultural factors and their implications.

the consumer price index was 225 in 2006 and 234 in 2007. The nominal interest rate during this period was 6.5%. what is the real interest rate during this period?

Explain the impact of the following situations on the value of the exchange rate of a country under a floating exchange rate system :
An increase in local demand for imported goods
An increase in international demand for the country's local product

.A consumer splits their income equally between two goods. If the price of one good increases by 10% and their income increases by 5%, show that the consumer’s optimal consumption bundle will change despite them being able to afford their original bundle

When estimating a demand function, explain why fitting a line of best fit through observed price and quantity combinations over time is not likely to yield good estimates.

A perfect competitive firm has a total revenue and total cost curves given as.TC=100Q and TC =5000+2Q+0.2Q^2 find the profit maximising out of.the firm. What profit does the.firm make?

Other things remaining​ equal, the law of demand says that higher prices will lead to a
A.
larger quantity demanded and lower prices to a smaller quantity demanded.
B.
smaller quantity demanded and lower prices to a larger quantity demanded.
C.
larger quantity demanded and lower prices to a larger quantity demanded.
D.
smaller quantity demanded and lower prices to a smaller quantity demanded.

1.A bus company operates two routes. On route 1, research suggests tht the price elasticity is -0.5 and on the other route -2.5. The company has decided to revise fares upwards on both routes by 1% this year. Comment on the decision.


2.The owners of an oil filling station read an article in a trade publication stating that the own-price elasticity of demand for diesel is -0.3. because of this highly inelastic demand, they are thinking about raising prices at their stations to increase revenue and profits. Do you recommend this strategy based on the information they have obtained. Explain.

How did the Financial Industry, Transportation Industry and the Energy Industry benefit form freer trade with Iran