Macroeconomics Answers

Given the state of the economy and the causes of that state—think back to our online discussions a few weeks ago—what should be the appropriate mix of fiscal and monetary policy, from a Keynesian perspective? From a neoclassical perspective? Show each policy mix graphically using the AD/AS model. Which makes the most sense to you? Why?

Explain the budgeting process and how it could be improved?

The federal deficit fell from $1,413 billion in 2009 to 1,293 billion in 2010 how much of this deficit change was due to the growing economy?

(Table: Pumpkin Market) Examine the table Pumpkin Market. There are two consumers, Andy and Ben, in the market for pumpkins. Their willingness to pay for each pumpkin is shown in the table. There are two producers of pumpkins, Cindy and Diane, and their costs are shown in the table. The equilibrium price for pumpkins is $8 and the equilibrium quantity is 5. At the equilibrium price and quantity, Ben buys _____ pumpkins and his consumer surplus is _____.

According to the model of optimal cash management, would rich individuals differ from poor ones in their demand for money?

4)Given the state of the economy and the causes of that state—think back to our online discussions a few weeks ago—what should be the appropriate mix of fiscal and monetary policy, from a Keynesian perspective? From a neoclassical perspective? Show each policy mix graphically using the AD/AS model. Which makes the most sense to you? Why?

3)Suppose Congress votes to decrease corporate income tax rates. Use the AD/AS model to analyze the likely impact of the tax cuts on the macroeconomy. Show graphically and explain your reasoning. What exactly causes AD and/or AS to shift? What happens to GDP and the aggregate price level? Why?

2)Thinking back to the business cycle discussion, how would Keynesian economists explain the performance of the economy during the last few years? Show graphically using the AD/AS model, and explain your reasoning.
Next, how would neoclassical economists explain the performance of the economy during the last few years? Show graphically using the AD/AS model, and explain your reasoning.
Which interpretation makes the most sense to you? Why?

1)Thinking back to the discussion on the state of the macroeconomy, would you describe the economy as booming, recovering, or in recession during the last few years? Why? Use the AD/AS model to illustrate this graphically. Which curve do you think caused the change? Explain your reasoning.

Given a hypothetical consumption function of the form:
Y = C + I0 + G0
C = α + β
Where: = Y – T
Y = Income
T = Taxes and that:
Compute the equilibrium level of income and consumption