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Macroeconomics
What is the economy’s current stage in the business cycle?
Macroeconomics
Elasticity of demand is 0.7, increase in price of 10 percent, quantity demanded is 100 million liters, initial price per liter is $20.
Compute the new total revenue.
Compute the new total revenue.
Macroeconomics
Is it true of false? why?
& If the real interest rate on government debt is equal to the growth rate of real GDP, reductions in the debt-to-GDP ration require the governmnet to run primary budget surpluses.&
& ---------------------------------------------------------------&
& You are given the following expenditure functions.&
Consumption, c=30+0.9DI&
Investment, I=40&
Government, G=20&
Taxes, T=0.2Y&
Exports, X=20&
Imports, IM=0.12Y&
& Assume the aggregate price level remains constant.&
a. what is the equation of the aggregate expenditure function?plot it in a diagram.
what is the total autonomous expenditure in the economy?&
& b.what is the slope of the AE function?how does the slope change when
1. MPC changes
2. the tax rate changes
3. marginal propensity to import changes&
& c. calculate the equilibrium level of real national income&
d. what is the multiplier? &
e. suppose that the government decides to increase G by 10. What will be the effect of this on equilibrium national income?
& If the real interest rate on government debt is equal to the growth rate of real GDP, reductions in the debt-to-GDP ration require the governmnet to run primary budget surpluses.&
& ---------------------------------------------------------------&
& You are given the following expenditure functions.&
Consumption, c=30+0.9DI&
Investment, I=40&
Government, G=20&
Taxes, T=0.2Y&
Exports, X=20&
Imports, IM=0.12Y&
& Assume the aggregate price level remains constant.&
a. what is the equation of the aggregate expenditure function?plot it in a diagram.
what is the total autonomous expenditure in the economy?&
& b.what is the slope of the AE function?how does the slope change when
1. MPC changes
2. the tax rate changes
3. marginal propensity to import changes&
& c. calculate the equilibrium level of real national income&
d. what is the multiplier? &
e. suppose that the government decides to increase G by 10. What will be the effect of this on equilibrium national income?
Macroeconomics
According to Keynes, a decrease in Consumption is not necessarily matched by a proportionate increase in investment.
a) Why might this be the case? Explain the answer by contrasting Keynesian approach with the Classical approach.
b) According to Keynes, what will happen to the AD curve if Saving rises, ceteris paribus? (Will there be a shift or will the AD curve remain unchanged?)
a) Why might this be the case? Explain the answer by contrasting Keynesian approach with the Classical approach.
b) According to Keynes, what will happen to the AD curve if Saving rises, ceteris paribus? (Will there be a shift or will the AD curve remain unchanged?)
Macroeconomics
What are the advantages and disadvantages of Capitalist economy?
Macroeconomics
What are the advantages and disadvantages of socialist economy?
