Macroeconomics Answers

Describe the main instruments of fiscal policy that are available to government.

How might the official employment statistic of STATIN be a misleading picture of the overall health economy?

The CEO claimed he could that he can set any price he wishes and sel as many of his product he wants at that price. is this correct? motivate your anser.

Lonewolf Ltd is the sole manufacturer and supplier of solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price he wishes and sell as many units of his products as he wants at that price. Is this correct? Motivate your answer.

Explain who would benefit and who would lose in the local economy as a result of the duty free importation of chicken.

Three managers of the Unilever Pakistan are discussing a possible increase in production. Each suggests a way to make this decision.
Kashif: We should examine whether our company’s productivity—gallons of potion per worker—would rise or fall.
Jamal: We should examine whether our average cost—cost per worker— would rise or fall.
Ahmad: We should examine whether the extra revenue from selling the additional potion would be greater or smaller than the extra costs.
Who do you think is right? Why?

Suppose I borrowed $100 of principal that must be repaid at the end of two years, along with interest of 4% a year. If the annual inflation rate turns out to be 8%
What is the real rate of interest on the loan?

2.1 Discuss the three key functions of money in an economy.
2.2 Explain how inflation affects the ability of money to perform the functions in 2.1 above.
2.3 Explain any 2 of the motives for holding money

1.1 The South African Government after protracted negotiations has recently allowed the tariff free importation of some poultry into the country.
1.1.1 Explain who would benefit and who would lose in the local economy as a result of the duty free importation of chicken.
1.1.2 Local poultry farmers are not happy with this new development and are canvassing for tariffs to be imposed on these imports. Discuss 5 arguments which the local poultry farmers can use to support their position.
1.2 Distinguish between currency appreciation and currency depreciation.
1.3 Discuss any 4 factors that could lead to the appreciation of the currency of your country in terms of the US Dollar.

Consolidated government expenditure is expected to grow 7.1 per cent over the medium term, reaching R1.69 trillion in 2018/19. At this rate, spending growth will outpace inflation by 0.8 per cent. (Source: www.treasury.gov.za)
1.Describe the main instruments of fiscal policy that are available to government.
2.Drawing from the statement above, how can government finance increased expenditure?
3.What are the possible negative effects of 2 above?