Macroeconomics Answers

In which way does laundered money affect the current account and the capital accounts of the drug exporting or drug-importing nation? [think capital inflows and capital outflows] What is the impact on prices of other goods? Living standards? The value of the US dollar? Legitimate businesses?

5. What is Money?
A. What is value of Money?
B. Explain

Many economists pointed out that in the ...
dramatically.
A. Why would V fall?
B. What would this do to Q or P (= MV, or V=PQ/M)?
C. Is your answer consistent with what actually happened?
D. Explain

According to the equations PQ=MV and Q; ...
wants to stimulate the economy [increas...
A. Increase (Decrease) M by selling (buying...
i. Gold
ii. Stocks
iii. Bonds
iv. Dollars
v. All (none) of the above
B. What can go wrong?
C. Explain how this works.

1. Consider this equation for M2 GDP = PQ = MV
A. What is P?
i. List some of the things that make it change
B. What is V?
i. How does it change?

According to the equations PQ=MV and Q; If the Central Bank of a country
wants to stimulate the economy [increase Q] during a recession it must:
A. Increase (Decrease) M by selling (buying)
i. Gold
ii. Stocks
iii. Bonds
iv. Dollars
v. All (none) of the above
B. What can go wrong?
C. Explain how this works.

1. Consider this equation for M2 GDP = PQ = MV
A. What is P?
i. List some of the things that make it change
B. What is V?
i. How does it change?

QUESTION. AD-AS Consider a theoretical framework where the short-run AS describes, as usual, a positive relationship between the price and output levels. The AD is obtained by combining the following equations:

C = c0 + c1(Y − T)
I = d0 − d2i
T = t0 + t1Y
L = f1Y − f2i
with G = G0 and M = M0.
Starting from a long run equilibrium allocation, assume that autonomous consumption
decreases, ∆c0 = x < 0

a) Represent graphically (AD-AS plot) the short run effect indicating if and how output
and price change

b) Moving from the starting long-run equilibrium to the short-run equilibrium, indicate if
and in which direction the following variables have changed: i interest rate, I invest-
ment, C consumption, T taxation, G public expenditure, w nominal wage

Suppose you are advising a small country like Bermuda on whether to print it's own money or to use money of its large neighbour such as U.S.A?
What are cost and benefits of national money ??
Does the relative political stability of 2 countries have any role in this decision ???

The consumer price index (CPI) can be used to measure inflation. There are potential problems with this process though that can result in inflation being overstated or understated. Sort each item below according to whether it would cause inflation to be overstated, understated, or would give an accurate representation of inflation.

Five hundred identical almond growers in region A have (long-run) total cost T CA =
q
2
100
where q is the number of crates a grower produces. Three hundred growers in region B have
(long-run) total cost T CB =
q
2
50 .
(a) nd the individual supply function for each type of almond grower
(b) \add up" all individual supplies to nd the almond industry supply function
(c) if the market demand for almonds is q
D(p) = 105; 000
2; 500p what will be the equilibrium
price of almonds? The equilibrium quantity? How much does each type of grower
produce? How much prot/loss they make?