Other Economics Answers

2) Why do so many developing countries select such poor development policies, and what can be done to improve these choices?

11) What is the role of the financial intermediation in economic development?

12) How can financial and fiscal policy help promote development?

5) What is meant by globalization, and in what ways does it affect different countries?

4) Who receives the gains from international trade, and can trade be used successfully as an engine of broad development? What policies can affect this under different circumstances?

1.    The following are the marginal cost and marginal value equations:

MarginalValue(DemandCurve)= P = 195-6Q

MarginalValue(SupplyCurve)=P=45=4Q

a.    Using these curves, estimate the equilibrium price and quantity assuming a perfectly competitive market. (4 points)

b.    Estimate the equilibrium price and quantity assuming these curves represent what a profit maximizing monopolist faces. (4 points)

c.    Estimate the equilibrium price and quantity assuming these curves represent a profit maximizing monopsonist. (4 points)

Q.1(a) Suppose investors prefer one-year bonds to two-year bonds and will

purchase a two-year bond only if they expect to receive an additional 2% over

the returns from holding one-year bonds. Currently, one-year bonds yield 6%,

but investors expect the yield to fall to 2% next year. (6)

(i) Which of the three models of term structure is relevant in this case?

(ii) What is the yield on a two-year bond?

(iii) Is the yield curve flat, downward sloping or upward sloping? Explain.

A weekly income of a clerk was Increased from $100 to $125 as a result of promotion in the office. He is to purchase 300 loaves of bread instead of 200 per week. Calculate the coefficient of his income elasticity of demand.

The worldwide consumption of cigarettes increased from 2.5 trillion in 1960 to 4 trillion in 1980.Let y be the consumption of cigarettes (in trillion) x years after 1940. In what year will the consumption reach 5.5 trillion. (Assume that the data can be approximated fairly closely by a straight line. Use the given information to find the equation of the line)

Consider a time series of some economic variable (at least of 20 years) and estimate the trend using the following methods: Graphic Method Method of Semi Averages Method of Least Squares Method of Moving Averages (determine the period of MA also; if not possible take m = 4 ) Interpret your result for each of the method. Also plot the trend values obtained from Method of Least Squares and Method of Moving Averages against the original data and compare the results from the two methods. Also find the trend eliminated values of the variable.