Macroeconomics Answers

What is a gold standard?

Suppose the Fed sells $5 million worth of bonds to Econobank.

What happens to the reserves of the bank?
What happens to the money supply in the economy as a whole if the reserve requirement is 10%, all payments are made by check, and there is no net drain into currency?
How would your answer in part b be affected if you knew that some people involved in the money creation process kept some of their funds as cash?

Outline the possible effects of the cuts in interest rates on economic growth and inflation

what are the implications of gross domestic product

QX =1.0–2.0PX +0.8I+1.5PY –3PZ+1.0A
Where PX, PY, and PZ represent the prices of goods X, Y, and Z;
I measures income per capita; and A is advertising. Currently:
PX =2.00,PY =2.50,PZ =1.00,I=4,andA=3.05.

Calculate the advertising elasticity of demand for X. Interpret your answer.

What kind of change in the price of X would you recommend if the firm is interested in maximizing revenue?

Under what conditions an economy realizes steady state?

Examine the sectoral disparities in India. Critically evaluate the various steps taken by the
Government of India towards regional disparities.

What is meant by sustainable development? Discuss the set of policies needed to control the
environmental damage in India.

What is the current unemployment rate? Why has it changed over the last 3 to 4 years?

You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.

Consumption 350 billion G
Transfer payments 100 billion G
Investment 100 billion G
Government purchases 200 billion G
Exports 50 billion G
Imports 150 billion G
Bond purchases 200 billion G
Earnings on foreign investments 75 billion G
Foreign earnings on Amagre investment 25 billion G

Compute net foreign investment.
Compute net exports.
Compute GDP.
Compute GNP.

In addition to responding with a quantitative answer, briefly describe how you arrived at your answers.