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Where
C=250+0.75Yd
I=350
G=800
X=500
M=200+0.4Y
T=0.15Y
Use the above information to answer the following questions
1) if C=250+0.75Yd interpret the meaning of the value 250
2)state the values of MPT,MPC and MPS on disposable income and MPM
3)find MPC and MPS on national income
4)find the level of national income in the economy
5) calculate net exports and interpret
6) if investment rises by 15% ,what will be the change in National income
Where
C=250+0.75Yd
I=350
G=800
X=500
M=200+0.4Y
T=0.15Y
Use the above information to answer the following questions
1) if C=250+0.75Yd interpret the meaning of the value 250
2)state the values of MPT,MPC and MPS on disposable income and MPM
#2
Suppose you have a supply curve for Corn. Show the impact graphically (draw the
graph) to illustrate the impact of each of the following events on the supply curve.
(hint: should be a movement along the existing supply curve, a shift the supply
curve left, or a shift the supply curve right)
The weather is great for producing corn
b. The weather is terrible for producing corn
The price of corn increases
d.
There is an increase in the technology for producing corn
e
There is an increase in fuel costs for producing corn
The government of a poor developing country fears that a political upheaval will occur unless
the growth rate is at least 4 percent per annum. The ICOR and the saving rate are projected to be
v = 5.0 and s = 14 percent, respectively.
a. Show that 4 percent growth cannot be achieved under these circumstances.
b. With the saving rate as given, what ICOR would be required to achieve the 4 percent growth
target?
c. What happens to the question (a) and (b) if population growth and depreciations in Harrod
Model is = δ = 0. 02 ?
In India during the 1980s the incremental capital-output ratio (ICOR) averaged 2.50 and
population growth rate and depreciation respectively, n=0.02, δ=0.01.
a. Using the Harrod growth equation, what saving rate would have been required for India to
achieve an aggregate growth rate of 8 percent per annum?
b. With the same ICOR, what growth target could be achieved with a saving rate of 27 percent?
c. If there is a large increase in the saving rate, and therefore a large increase in the amount of
new capital formation, is the ICOR likely to rise, fall, or remain the same? Explain.
Consider a central bank that has an inflation target, π*. The Phillips curve is given by,
πt- πt-1 = -α(ut-un).
a) Is the central bank likely to be able to hit its inflation target every period? Explain
b) Suppose the natural rate of unemployment, Un, changes frequently. How will these changes
affect the central bank’s ability to hit its inflation target? Explain.
What are the macro prudential tools? Explain by giving three appropriate examples.
The Mundell - Fleming assuming imperfect capital mobility, analyze the effects of an expansionary fiscal policy. Consider the effect of the policy on the income when the exchange rate is fixed and when the exchange rate is flexible. Explain by using the appropriate graph. Give your conclusion regarding the effectiveness of policy.
The price will change automatically over time when the output equilibrium below the natural output. Discuss three (3) views related to the price movement. Support your answer with appropriate equation and graph.
(a) The existing debt would reduce the flexibility of budget arrangement, derive the evolution of the debt to GDP ratio (debt ratio) and explain the change in the debt ratio over time. (8 marks)
(b) Based on the answer in question (a), what is the determinant factors of change in the debt ratio and explain its implication briefly. (8 marks)
(c) Budget 2020 indicate a little bit changes on tax structure of Malaysia through the increasing tax rate of high income group from 28 percent to 30 percent; and reducing tax rate on small medium enterprise. Based on the economic growth equation, discuss the impact of debt restructuring to the target of being a developed nation by the year 2020. (9 marks)
#340153 on Dec 2023