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?

Question
1. The classical economist assumed that in order to attain full employment in an economy,w
what should be done?
2. The bursting of the asset-price "bubble" in countries with fixed exchange rates and unrestricted capital flows caused?

There is an excellent crop this year due to unexpected weather conditions. Illustrate the changes that occur to the level of real GDP and the market equilibrium?

Discuss two main differences between the money market and capital market

Graphically illustrate the Loanable Funds Theory of interest rate determination

during a discussion several years ago on building a pipeline to alaska to carry natural gas the us senate passed a bill stipulating that there should be a guranteed minimum price for the natural gas that would be carried through the pipeline. the thinking behing thr bill was that if private firms had guaranteed price for their natural gas they would be more willing tondrill for gas and to pay to build the pipeline.
a. using the demand and supply framework predict the effects of this price floor on the price quantity demanded and quantity supplied.
b. with the enactment of this price floor for natural gas what are some of the likley unintended connsequences in the matket?
c. suggest some polices other than the price floor that the goverment can pursue if it wishes to encourge drilling for natural gas and for a new pipeline in alaska

1.Identify the following as either associated or not associated with recessions:
a)decreased real output
b)worsening of the nation's balance of payments
c)loss of future output
d)slow down the rate of inflation

2.Define cost-push inflation. Using an AS/AD diagram, illustrate how cost-push inflation affects the level of aggregate output and the price level in the economy. Suppose that the government uses expansionary fiscal policy to counter the effects of the cost-push inflation. Indicate on the diagram the impact of this policy on the price level and level of aggregate output.

3.Define the Phillips Curve. Graphically illustrate the relationship between the inflation rate and the unemployment rate.

4.Evaluate the effects of anticipated and unanticipated inflation.

Predict how each of the following events will raise or lower the equilibrium wage and quantity of coal miners in West Virginia. In each case, sketch a demand and supply diagram to illustrate your answer.
a. The price of oil rises.
b. New coal-mining equipment is invented that is
cheap and requires few workers to run.
c. Several major companies that do not mine coal open factories in West Virginia, offering a lot of
well-paid jobs.
d. Government imposes costly new regulations to
make coal-mining a safer job.

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.
a. The number of people at the most common ages for home-buying increases.
b. People gain confidence that the economy is growing and that their jobs are secure.
c. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
d. Because of a threat of a war, people become uncertain about their economic future.
e. The overall level of saving in the economy diminishes.
f. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

Create a new graph illustrating the market for water park business for these two externalities. Label the demand curve, the social-value curve, the market equilibrium level of output, and the efficient level of output.
What is the per-unit amount of both externalities?
Discuss both government and private solutions that would result in an efficient outcome.

If nominal income rises by 4 percent while real income falls by 1 percent, then the price level must change by a?