Macroeconomics Answers

Is a $2 billion increase in business inventories counted in that years GDP?

After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions:
Assume that we have the following data:
C=100+0.50Y
Ip=100-20r
Mt=0.10Y
Ms=100-10r
M=80

a. Build the IS-LM function.
b. If we assume an increase in Investments by 100 units, calculate again the IS-LM functions.
c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.

After graduating from college in 2010, Art Major\'s starting salary is $40757.00. Suppose Art Major has a cost of living adjustment (COLA) clause, i.e. an escalator clause in his labor contract so that he will be able to maintain this same level of purchasing power in real terms in 2011 and 2012. Using the information in the table below, how much will Art Major be earning in 2011 and 2012 if his salary keeps up with inflation? Round your answers to the nearest dollar.

Suppose that a Starbuck’s venti latte currently sells for $4.50 in the U.S. and SF4.00
in Switzerland. Make up a value for the exchange rate between the dollar and the
Swiss franc (expressed as francs per dollar) that leaves the dollar undervalued on
a Starbuck’s purchasing power parity basis. Then use your numbers to show that, at
this exchange rate, it would be cheaper to purchase coffee in the U.S. than in
Switzerland. (10 pts)

While deriving output multiplier for an econonomy, what is the condition under which the output multuplier can be negative

If the Central Bank keeps nominal interest rates close to zero, and uses Quantitive Easing, how may output fail to expand?

Consider a closed economy with no government. The production function is given by

Consider the following IS/LM model for a closed economy without government.

In each of the following cases, specify whether the change is an injection or leakage/withdrawal in
Jamaica’s circular flow of income? In each case also specify whether the change is an increase or
a decrease assuming ceteris paribus condition.
a. The government raises tax allowance - circular flow of income will decrease.
b. The government cuts spending on roads - circular flow of income will decrease.ase.

what is meant by golden role steady state? in what respect it is different from the steady state of solow? is the golden rule steady state a stable condition? expalin with help of diagram?