Macroeconomics Answers

Find data on GDP and its components, and compute the percentage of GDP for the following components for 1950, 1975, and 2000.

a. Personal consumption expenditures; b. Gross private domestic investment; c. Government purchases; d. Net exports; e. National defense purchases; f. State and local purchases; g. Imports

* Do you see any stable relationships in the data? Do you see any trends? (Hint: A good place to look for data is the statistical appendices of the Economic Report of the President, which is written each year by the Council of Economic Advisers. Alternatively, you can go to www.bea.doc.gov, which is the Web site of the Bureau of Economic Analysis.)

Suppose a Mrs. Chakay marries her butler, Ato Tachakay. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How should it affect GDP?Justify your debate.

A farmer grows a bushel of wheat and sells it to a miller for birr100. The miller turns the wheat into flour and then sells the flour to a baker for birr 300. The baker uses the flour to make bread and sells the bread to Rift Valley University for birr 600.The Rift Valley University students eat the bread. What is the value added by students? What is GDP?

A key feature of a macroeconomic model is whether it assumes that prices are flexible or sticky. According to most macroeconomists, models with flexible prices describe the economy in the long run, whereas models with sticky prices offer a better description of the economy in the short run. Which one of thoughts discussed above do you support? Why? Support your answer with evidence.

Currently, we Ethiopian faced a problem of war in some part of Ethiopia such as State of Amhara, State of Afar and Tigray. This problem caused low production, output, high unemployment rate, low aggregate demand. The macroeconomics has considered the state of macroeconomics, the philosophies that have been most important in the 21th century. Given the situation, what would a state of macro economics recommend be done? And as off you what would be done?

How often does the price you pay for a clean your shoes? What does your answer imply about the usefulness of market-clearing models for analyzing the market for shoes shine?

What do you think are the defining characteristics of a science? Does the study of the economy have these characteristics? Do you think macroeconomics should be called a science? Why or why not?

What do you think are the defining characteristics of a science? Does the study of the economy have these characteristics? Do you think macroeconomics should be called a science? Why or why not?

Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the following events: Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing. a) Increasing skilled migration into the country b) Imposing taxes on manufacturing (hint: define a two-sector producing economy, manufacturing and services). c) Decreasing the expenditure on research and development d) Implementation of easier rules for foreign investment e) The effects of a pandemic

Identify what sort of effects the following listed events have. You are required to define the market under study (for example: the labour market, oil market, etc). Explain whether the event acts on the demand or supply side, and whether the event leads to a quantity or price change, or leads to a shift in demand and/or supply. Make sure to explain what sort of assumptions you are making on the elasticities of demand and supply. a) An increase in oil prices as a consequence of a price dispute in the world oil markets b) The implementation of a minimum wage c) The implementation of subsidies to milk producers in Australia d) The implementation of a Carbon tax in the economy. A Carbon tax is charged according to the level of emissions of greenhouse gases in an economy. e) The implementation of an increase in tuition in University studies