Macroeconomics Answers

The economy of Uganda has a budget deficit of USH 500B. This deficit is likely to be funded through domestic borrowing and taxation. Using an appropriate model, explain the macroeconomic implications of such a move.

You are given the following information about the commodity and Money markets of a closed economy without government intervention.

The commodity market
Consumption function: C = 50 + 2/5Y
Investment function: I = 790 – 21r
The Money Market
Precautionary and Transactions demand for money: MDT = 1/6 Y
Speculative demand for money: MDS = 1200 -18r
Money supply: MS = 1250
Required:
(i) Determine the equilibrium levels of income and interest rate for this economy.
(ii) Using a well labelled diagram, illustrate the equilibrium condition in part (i) above.

If actual GDP is $18T, full employment or potential GDP is $20T and the marginal propensity to consume is .7 then what kind of fiscal policy is necessary under these conditions?

Hello,

I have a question about production possibilities and outward shifts regarding the Production Possibilities Frontier (PPF). Does an investment in infrastructure increase a country's production possibilities? For example, I am looking at a railway that has been built by China in Ethiopia as a part of their foreign aid program
(http://www.france24.com/en/20161005-chinese-built-railway-opens-linking-ethiopia-djibouti)
Since improved transportation infrastructure only opens up new markets and speeds up delivery times, I am not sure if it counts towards creating more production possibilities, since it has nothing to do with the process of extracting the raw materials in the first place, just transporting them. Could i show the effects of the railway on a PPF or not?

Thank you for your time.

A simplified economy is specified as follows:

A. Goods market, all values C, I, G and NX values are in billions of C$:

Consumption Expenditure: C = 130 + 0.7(Y-T)Investment Expenditure: I = 1,300 - 530iGovernment Expenditure: G = 320Lump-sum Constant Taxes: T = 320Exports: 70Imports: 10


B. Money market, all Md values are in billions of C$:

Interest Rate: i = 0.07 or 7%Money Demand: Md = 710 - 2,000i


Note: Please keep your answers accurate to two decimal places.

a) Given the above information, solve for the following: the equilibrium Y, the money supply M, the consumption expenditure C, and the investment expenditure I.

Find Y, M,C, and I

Please help

Consider an economy that produces only three types of fruit: apples, oranges & bananas. In
the base year the production & price data are as follows:
FRUIT QUANTITY PRICE
APPLES 3000 Unit Rs. 2 per unit
BANANAS 6000 Rs. 3
ORANGES 8000 Rs. 4
In the current year the production & price data are as follows:
FRUIT QUANTITY PRICE
APPLES 4000 Unit Rs. 3 per unit
BANANAS 14,000 Rs. 2
ORANGES 32,000 Rs. 5
a. Find nominal GDP in the current year & in the base year. What is the percentage
increase since base year?
b. Find real GDP in the current year & in the base year. By what percentage does a real
GDP increase from the base year to current year?
c. Find the GDP deflator for the current year & the base year. By what percentage does
the price level change from the base year to current year?

You are given the following information about an economy:
Gross Investment $40
Govt. purchases of goods & service 30
GNP 200
X – M - 20
Personal Tax 60
Govt. transfer 25
Interest payments from the Govt.
to domestic Pvt. Sector 15
Factor income received from the rest of the would 7
Factor payment made to rest of would 9
Calculate:
a. Consumption b) GDP c) Net factor payment from abroad
b. Pvt. Saving e) Public Saving.

How distribution relate to poverty

Which of the following is NOT a reason for liquidity preference?

A a transactions demand for money

B a precautionary demand for money

C an equilibrium demand for money

D a speculative demand for money

10. Global Insight (GI) forecasting firm predicted that the Canadian economy will bounce back by a stronger than expected 1.0% on annualized basis in the third quarter of 2012 and with a further 0.1% in the fourth quarter of 2012. The firm also expects moderate growth overall in 2013. (10 marks)

a. What evidence does GI present to support the view that Canada had entered a recovery