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Consider the Economy of Rwanda. The consumption function is given by 𝐶 = 200 + 0.75[𝑌 − 𝑇] while the investment function is 𝐼 = 200 − 25𝑟. Government purchases and taxes are both 100.
The money demand function of Rwanda is [𝑀 𝑃⁄ ] 𝑑 = 𝑌 − 100𝑟. The nominal money supply is 100 and the price level P is 2. [13 Marks]
i) Derive the IS curve equation.
ii) Draw a well labeled diagram of the IS Curve.
iii) Derive the LM curve equation.
iv) Draw a well labeled diagram of the LM Curve.
v) Determine the equilibrium level of income and equilibrium interest rate
2. Using an appropriate hypothetical example, describe how commercial banks “creates and multiplies money” in an economy [4 Marks]
3. Using appropriate Phillip's curve diagrams, describe the "short-run" and "long-run" relationships between inflation and unemployment. [3
Which action is evidence that a country is a planned economy
find the extreme values of the following y = X3 - 6X2 + 9X - 8
Before evaluating the economic merits of a proposed investment, the XYZ Corporation insists that its engineers develop a cash-flow diagram of the proposal. An investment of $10,000 can be made that will produce uniform annual revenue of $5,310 for five years and then have a market (recovery) value of $2,000 at the end of year (EOY) five. Annual expenses will be $3,000 at the end of each year for operating and maintaining the project.
Draw a cash-flow diagram for the five-year life of the project. Use the corporation’s viewpoint.
Production function representation [answer with explanation]
a. At least how much product can be produced by certain amount of input
b. Production of certain number of products, the maximum number of production factors to put
c. Relationship between input and output
d. All the above are right
the table below shows the age distribution of a country
age group: 0-17/18-35/30-60/61& above
population: 30000/15000/25000/11000
A random sample of high school students are asked the number of hours they spent on social media. The hours are reported below: 3 5 6 7 8 10 12 13 14 15 You can assume the times are normally distributed with a standard deviation of 8.5. a) Estimate with 90 percent confidence the mean number of hours spent on social media by all high school students. Show all working as part of your answer. b) Interpret your findings in part a).
Use the information below to answer questions 3.28 to 3.30.
Consider a Keynesian model:
Full employment output = R100 million
Tax rate = 0,25
Investment = R40 million
Autonomous consumption = R30 million
Marginal propensity to consume = 0,8
3.28 The value of the multiplier is …
[1] 2
[2] 1.67
[3] 2.5
[4] 4
3.29 The equilibrium level of income is …
[1] R70 million.
[2] R175 million.
[3] R280 million.
[4] R140 million.
3.30 To bring about full employment, government spending should be …
[1] -R30 million.
[2] -R72 million.
[3] R30 million.
[4] R75 million
Which one of the following authorities is responsible for the monetary policy?
[1] The South African Reserve Bank (SARB)
[2] Republic of South Africa’s treasury department
[3] South African Revenue Services (SARS)
[4] Statistics South Africa (STATSSA)
Which of the following is correct about an increase in interest rate in the Keynesian model?
[1] increase price levels
[2] decrease price levels
[3] increase investment
[4] decrease investment
