Macroeconomics Answers

In a closed economy, where the households save 0.1% of their income and the only tax is 15% tax on income , what will be the result of a rise in government spending of £200000?

The government of a poor developing country fears that a political upheaval will occur unless

the growth rate is at least 6 percent per annum. The ICOR and the saving rate are projected to be

v = 5.0 and s = 15 percent, respectively.

a. Show that 6 percent growth cannot be achieved under these circumstances. (1 Mark)

b. With the saving rate as given, what ICOR would be required to achieve the 6 percent growth

target? (2 Marks)

c. What happens to the question (a) and (b) if population growth and depreciations in Harrod

Model is 𝒏 = 𝜹 = 𝟎. 𝟎𝟐?

At an income of 100,000 a consumer spent 90 000 on consumer goods.when income rose to 200,000 the consumer spent 160 000 on consumer goods what is the MPC

Where

C=300+0.2Y

I=550

G=800

X=400

M=100+0.4Y

T=0.1Y

Use the above information to answer the following questions

1) if C=300+0.2Yinterpret the meaning of the value 300

2)state the values of MPT,MPC and MPS on disposable income and MPM

3)calculate 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 declines by 15% ,what will be the change in National income

“The number of firms in an industry is not always a good indicator of the extent to which that industry is competitive.” Do you agree with this statement? Critically examine.

Explain the utility-maximizing rule of a consumer.

89. Outline and explain two characteristics of indifference curves.

Discuss how the law of diminishing marginal utility occurs.

Cite a real-life example of how you rationally behave as a consumer. 

If the utility function involving commodities X and Y is U= 8x + 22y - x² - 2xy - y² and the budjet constraint is 12= x + 2y, determine the values of x and y that maximize the utility?