Macroeconomics Answers

[10:15 am, 27/01/2022] Siyad: a) The average prices and quantities of six hypothetical items offered by a government agency running a social protection program for a marginalized community are shown in the following table:

2020

2021

Items

Price (Kshs/Kg)

Quantity (Kg,000)

Price (Kshs/Kg)

Quantity (Kg,000)

Maize Flour (A)

10

4

12

5

Vegetables (B)

15

6

18

10

Peas (C)

10

6

10

10

Beans (D)

20

10

22

20

Wheat (E)

30

12

40

18

Millet (F)

40

10

50

12

Tessy, the programs manager has hired you as a consultant to advice if she needs to ask the government for additional budgetary support. Using 2020 as base year, compute Kelly’s and Fisher’s Price index numbers for 2021 and in each case comment on the result

Suppose the government raises govt. expenditure by 20% in order to increase aggregate demand. Show how this policy results in the crowding out effect.

Since quantitative credit control instruments are more targeted and more objective it is always advisable that they be applied at all times over the selective instruments .true or false . explain

Given Demand Function Qd=40-2p And Supply Function 2p-Qs=20 Assume The Gov.T Increase Atax Of T Per Unit On Quantitiy Supplied And The Producer Adjust The Supply Function To Include The Tax

A) Find The Tax Rate At Which Tax Revenu Is Maximum?

B) Find The Maximum Revenu Which Can Be Obtained From A Function?

Given Demand Function Qd=40-2p And Supply Function 2p-Qs=20 Assume The Gov.T Increase Atax Of T Per Unit On Quantitiy Supplied And The Producer Adjust The Supply Function To Include The Tax

A) Find The Tax Rate At Which Tax Revenu Is Maximum?

B) Find The Maximum Revenu Which Can Be Obtained From A Function?

Answer True or False, then justify your response with practical economic examples:

a. The introduction of mobile money transfers and ATMs has reduced the demand for money tending to lower interest rates. (5 marks)

b. Open Market Operations are more effective in a developing country like Kenya when compared with the Bank Rate Policy. (5 marks)

c. Since Quantitative credit control instruments are more targeted and more objective, it is always advisable that they be applied at all times over the Selective instruments. (5 marks)

d. Inflation is always associated with more money chasing few goods. (5 marks)

Do you think producers enjoy flexibility in raising the car prices? Explain it with the help of graph.

Do you think the producer enjoy flexibility to raise car prices??

Cathy​, a married​ taxpayer, makes the following gifts during the current year ​(2021​): $18,000 to her​ church, $66,000 to her​ daughter, and $21,000 to her husband.

What is the amount of Cathy's taxable gifts for the current year​ (assuming she does not elect to split the gifts with her​ spouse)? ​(To arrive at taxable​ gifts, a $15,000 annual exclusion is allowed per done for 2021. Complete all input fields. Enter a​ "0" for any zero​ amounts.)

Total gift given Taxable gift

Gift to daughter

Gift to husband

Contribution to church

Total

Empirical economics growth contribution of Solow growth model, model strength and weakness and main conclusion