Macroeconomics Answers

Suppose C=50+0.80Y, Y=Disposable income,Investment(I)=70,Government expenditure(G)=70,Tax(Tx)=0.10Y.
a.Find equilibrium output.
b.What are tax revenues at equilibrium output?Does the government have a balanced budget?
c.Find equilibrium output when investment increases from 70 to 90.

What is business cycle? Mention the phases of a business cycle with graphs."An economy may not go through all the phases of a business cycle if there is any government intervention in the economy"-Do you agree with the statement? Justify your answer.

What is unemployment? Do you think in a full employment situation there may remain 2-3% unemployment in economy?Why or Why not?

"MPC of poor people is higher than that of the rich people"-Explain the statement.

Suppose household consumption is C=100+0.90Y, where Y=income, and investment is 150. Find the equilibrium output and consumption.

If the price of a luxury car is increased,will it have any influence on the inflation rate of the country? Recently,the price of the necessary commodities has been rocketed high. What are the factors you think liable for this price increase? How this price increase can be brought into control?

Suppose,the saving function of a society is as follows:
S=-100+0.25Y ,where S=Total saving and Y=Disposable income,Answer the following questions:
a.What is the amount of dissaving?
b.What is the total saving when disposable income is 4000?
c.What is induced consumption when disposable income is 2000?
d.Find MPS

Make a critical analysis of the effect of technology on export output in Nigeria.

To Control inflation by limiting bank loans, the peoples bank announced that it would raise the required reserve ratio for commercial banks from 21% to 21.5%. -china morning post 2011 Q: compare the required reserve ratio in china 2011 and the required reserve ration on checkable deposits in the united states today.
Q: if the currency drain ratio in china and the united states is 10% of deposits, compare the money multipliers in the two countries.

“There is a mismatch between man’s ability to produce and social incapacity to utilize”.
Explain the meaning of this statement.