Macroeconomics Answers

On monday last week, XYZ corporation stock traded for $55 per share with 21,300 shares exchanged. Two days later, XYZ corporation stock traded at a price of $70 per share with 24,000 shares exchanged. If only one curve shifted, demand or supply, which curve must have shifted and in which direction? How do you know? draw a demand and supply graph to illustrate this. Identify any abbreviations used, e.g. P=price, Q=quantity, D=demand, S=supply

What factors contribute to high rates of economic growth for a nation? List four factors that contribute to economic growth and explain how each of these factors contributes to economic growth. Show economic growth using a production possibilities graph. Identify any abbreviations used.

In order to meet new Homeland Security guidelines, the Eagles install new facial recognition technology that can instantly identify all patrons entering Lincoln Financial Field. Installing the new security system costs the team $150 million. Once installed, it is essentially costless to operate. Use the appropriate economic framework to derive the impact of installing this system on ticket prices to Eagles games.

Given that monopolies are bad, how is it possible that a monopoly baseball team taking over the monopoly broadcaster actually benefits the fans who watch the game on TV? Use an appropriate economic model.

Suppose the Phillies decide to charge 25 percent more per ticket for every home game against the New York Mets (who always attract a lot of fans from New York). Assume initially that the cost of “providing” a game against the Mets is no different than for any other team.

a. Is this price discrimination? If so, what form of price discrimination is it, and why is it that form of discrimination. If it not, why isn’t it price discrimination?
b. Suppose Mets fans are particularly rowdy, so the Phillies have to hire extra security for a Mets game. Assuming that the Phillies must pay $250,000 in extra security costs regardless of attendance, does your answer to (a) change? Why or why not?
c. Suppose the security costs rise by $10 for every fan admitted to a Mets game but by only $5 for every fan admitted to any other game. Does your answer to (a) change? Why or why not?

Why is the multiplier effect of the Los Angeles Kings likely to be greater than the multiplier effect of the Winnipeg Jets?

A California politician claims that the state must subsidize the construction of a new stadium for the Oakland Raiders because of the “positive externalities” that the team generates. Use the appropriate economic model to explain his reasoning.

Tokyo has won the right to host the 2020 Summer Olympics, but it might have made itself worse off by doing so. Use the appropriate model to explain why this is so.

Suppose Mr. Y deposits AED 100,000 into a one-year Certificate of Deposit at 5% interest. The Central Bank sets the reserve ratio for the banks at 10%.

a) Illustrate how the banks create money with the help of given information.
(Show first 5 steps)
b) Calculate the total money creation in the economy with the help of formula.

Commercial banks in United Economy have total deposits of AED 300 billion. Their reserves are AED 15 billion, two- thirds of which are with the Central Bank as deposits. There are AED 30 billion notes outside the banks. There are no coins!

Calculate-
a) The monetary base.
b) The banks’ reserve ratio.
c) Currency drain as a % of deposits.