Macroeconomics Answers

Use the information provided below to construct equations relating consumption and saving to disposable income:

income consumption saving tax
25 million 5 million 15 million 5 million

Why do general tax revenues pay for so much personal health care? Who will pay if the Medicare trust fund runs out of money?

How do I get the Total Cost, Total Variable Cost given the Price, Quantity Demanded, Total Revenue?

treasuries yields fell sharply on weak economic data, what is the mechanism behind? Does the lower yields mean a higher treasuries price which in turn means a higher demand? Why a higher demand of US dominated treasuries while the economy is weak?
raymondtin

An economy with $55000000000 annual GDP grow 10% a year for 10 years continuously ,how much value it is going to have after 10 years of growth?

In economy, the consumer expenditure is represented by the following equation:

C = 50 + 0.75 Yd

Assume that investors spend RM500 at every level of income ( I = RM500), net exports are zero
(X – M) = 0, goverment purchases are RM300 and taxes are RM200.

a) Determine the equilibrium level of GDP.
(4)

b) If potential GDP is RM3,000, is there a recessionary or inflationary gap? If so, how much?
(2)

c) What will happen to the equilibrium level of GDP if investors become optimistic about the country’s future and raise their investment to RM600?
(4)

d) After investment has increased to RM600, is there a recessionary or inflationary gap? How much?
(2)

Select a (domestic) public limited company of your choice which has some degree of market power. In an essay of 2400 words or fewer, evaluate the pricing strategies it employs for one of its core products.
Task B must be written as an essay. You will need to build up a case study of your chosen company. You must first demonstrate that the company has some power to set its own price (that is, it has some degree of market power) – e.g. what is the structure of the industry it operates in? What is its market share for the product? How concentrated is the industry? To make the task a simple as possible restrict your attention to a single product in a single country (the firm can sell more than one product in many countries but you should focus on one).

Suppose the Jamaica biscuit producing company, located in Kingston, has 100 ovens and the life of each oven is 5 years, and 20 ovens must be replaced each year.
If demand for the biscuits is constant, how many ovens will be replaced each year?

Following a rise in uncertainty leading to a fall in investment, what would be the FEDs appropriate monetary policy response assuming they want to hold interest rates constant? Demonstrate this using the IS LM model.

Does this mean interest rates must increase to previous levels using contraction policy?

Suppose you are the manager of a chain of computer stores. For obvious reasons you have been closely following developments in the computer industry, you have just learned that the government has passed a two-prong program designed to further enhance the computer industry position in a global economy. The legislation provides increased funding for computer education in primary and secondary schools, as well as tax breaks for firms that develop computer software. As result of this legislation, what do you predict will happen to the equilibrium price and quantity of software? ( show graphically)