Macroeconomics Answers

in a certain economy the marginal propensity to save is 0.2 and the autonomous consumption is 400
a) formulate the consumption functions
b)if the government expenditures were to be increased by 50% what would be the resultant change in national income

Think global and act local for sustainable development . How is this practically possible in urban spaces like Delhi and explain this with suitable example

Question 80 is based on the table below which shows the GDP at current prices of country A for the years 1 and 2.

Year. GDP at current prices
1 100
2 110

80. Which of the following statements are correct?
a. The increase in GDP from year 1 to year 2 can be the result of an increase in the general price level.
b. The increase in GDP from year 1 to year 2 can be the result of an increase in production.
c. From the given information it is impossible to tell whether the 10% increase in GDP from year 1 to year 2 represents economic growth.

[1] All the statements are correct.
[2] a and b
[3] a and c
[4] b and c
[5] a

The following information represents the National Income Model of an 'Utopian' economy


Y = C+I+G

C= a+b(Y-T)

T= d+tY

I=Io

G=Go


where a>O; O<b<1

d>O; O<t<1


T=Taxes

I=Investment

G=Government Expenditure


i) Explain the economic interpretation of the parameters a,b,d and t

ii) Find the equilibrium values of income, consumption and taxes.

When Monica first entered the workforce in 2000 her annual salary was $41,500. Since that time Monica has been promoted. Now Monica wants to compare her income progression in real terms with her current salary in of $115,000. If CPI was 136 in 2000 and 156 in 2016, what is the difference between her starting salary and her current salary in 2016 price equivalents?

Fixed capital at the end of the year 2013 was Rs.50 crore and at the end of the year 2014 Rs.55 crore.Closing stock at the end of the year 2013 and 2014 was respectively Rs.10 crore and Rs.5 crore respectively.Calculate the gross investment during 2014 is:-

capital at the end of year 2012 was Rs.100 crore and at the end of the year 2013 Rs.110 crore.Depreciation during the year 2013 was Rs.5 crore.calculate Gross investment during 2013
is:-

1. Neoclassical economics defines Economics as the study of how best to allocate a finite amount of resources among an infinite number of (potential) uses. Show that the concepts of Scarcity, Choice, and Opportunity Cost arise logically from this definition.

72. Which of the following statements regarding taxes are correct?
a. A tax is neutral if it has minimum distortion effects on prices.
b. Tax avoidance occurs when people do not pay the taxes they are supposed to pay.
c. A gate fee at a private park is an example of user charges.

[1] a
[2] b
[3] c
[4] a and b
[5] All the statements are correct.

11. Which of the following statements regarding financing of government expenditure are correct?
a. The budget deficit is positively related to the interest on public debt.
b. The government can finance its deficit by buying bonds from the public.
c. Inflationary financing occurs when government borrows from the central bank.
[1] All the statements are correct.
[2] a and b
[3] a and c
[4] a
[5] c