Macroeconomics Answers

marginal propensity to save (MPS)=0.2 , Tax rate (t)=0.2 ,Autonomous savings=-50,Investment spending(I)=100, Government expenditure(G)=150, Exports(X)=200, Autonomous imports =30, Marginal propensity to import(m)=0.15
a)derive the consumption equation from the information given.
b)calculate the equilibrium level of income using the AD=AS approach.
c)calculate the level equilibrium level of income using the injections=withdrawals approach.
d)calculate the fiscal surplus(or deficit)at the equilibrium level of income.
e)calculate the value of net exports at the equilibrium level of income.
f)what would the level of income have to be if net exports are zero?
g)what is the value of the multiplier in an economy:
i)consisting only of households and businesses(no government or foreign sectors).
ii)consisting of households, businesses and the government(but no foreign sector)
iii)consisting of households, businesses and the government and foreign sectors?

Given U.S incomes and Expenditures as follows

wage-------- 100
Social security contributions---- 7
interest income ----- 5
personal taxes------- 20
consumption expenditure by households 60
Government purchases of goods and services 150
tranfer payments 50
coporate profit 100
invetment expenditure by business 100
corporate income tax 30
indirect business taxes 20
undistrubuted corporate profit 50
consumption of fixed capital(depreciation) 90
non income charges 40
rents 65
expenditure by foriegners 25
Net foreign factor income earned domestically 25
answer
a) using expenditure approach, what is GDP?
b)using income approach,what is GDP?
c) what is Net domestic product?
d) NI?
e) PI?
f) DI?

Monetary policy in the context of aggregate supply/ aggregate demand

1- An economy is starting to exhibit signs of an economic boom. The central bank decides to change monetary policy to deal with an economic boom, describe in point form what will occur to the monetary policy, (MP), the real interest rate, and to the aggregate demand curve?

2- Contrast your answer above if the central bank was pursing an inflation control target of between 1 and 3%. Do you think the central bank will step in, why or why not?

In October 2008, Canadian consumer confidence plunged to levels last seen in the 1982 recession. According to some economic analysts, the global credit crunch and major stock market declines appear to have had an effect on Canadian consumer confidence.
a. Explain, and draw a graph to illustrate, how declining consumer confidence can change real GDP and the price level in the short run.
b. If the economy was operating at full-employment equilibrium, what is the state of equilibrium after the fall in consumer confidence? In what way might consumer expectations have a self-fulfilling prophecy?

Global Insight (GI) forecasting firm predicted that the Canadian economy will shrink by 1.4 percent on an annualized basis in the last quarter of 2008 and a further 1.2 percent in the first quarter of 2009. The firm sees substantial job losses as the recession takes hold.
a. What evidence does GI present to support the view that Canada had entered a recession?
b. Use a short-run Phillips curve to explain why the inflation rate may decrease over the course of 2009.
c. Under what circumstances might the inflation rate not decrease during 2009?

Using the real business cycle theory, explain two(2) effects of an adverse technological shock on the labor market and on the output market.

The structural unemployment rate is 1.3 percent, the frictional unemployment rate is 2.1 percent, and the current unemployment rate is 4.9 percent. The economy is in

When writing a research proposal on ebola and its effects on Zambia's economy:
a. what is a good statement of the problem
b. name at least three subproblems
c. what would be the research objectives?

what will stockholders do
-select the managers of a corporation
select the employees of a corporation
select the board of directors of a corporation
all of the above

which of the following statements is false?
exports benefit trading countries because exports create jobs, imports do not benefit trading countries because they result in a loss of jobs

each year the us exports about 50% of its wheat crop and 20 % of its corn crop

most of the leading export countries are large, high-income countries