Economics Answers

Using IS_LM model. Explain the analysis for the following: Use diagram where necessary.
i) When in an economy, if the interest rate does not affect investment in the goods market, then analyses the impact on the economy? Show by diagram
ii) Impact of increase in money supply in two identical economies having differences in MPCs.
i.e MPC1 > MPC2. Show what high MPC countries will experience.
iii). Rather than boosting, if there is drop in consumer confidence, although thereis increase in money supply.

There are various factors which affect the desired stock of capital. Discuss each and every one.

Suppose that a firm produces 200,000 units a year and sells them all for 10 dollar's each. The explicit costs of production are 1,500,000 dollar's and the implicit costs of production are 300,000 dollars . The firm has an accounting profit of

If a monopoly market were to be replaced with a perfectly competitive market for the same product and with the same cost structure, what could we expect?

In January 2018, Australia had an unemployment
rate of 5.5%.
(h) Analyse how the Australian government might
reduce unemployment by using fiscal policy.

Consider a consumer consuming two goods X, and Y, faces the following utility function: U(X,Y)=30X4/5Y1/5 assume further that price X is $5 per unit, price of Y is $10 per unit and income of the consumer is $2000. based on the above information, find the optimum combination of X and Y which maximize the utility

Q 3. (5-marks) The textile industry is backbone industry for Pakistan. Textile lobbyists advocates a ban on the export of raw cotton (a major input for textile industry). Describe various arguments its lobbyists might make. Give a response as an economist to each of these arguments.

Explain nominal and real interest rate.What is the Fisher Effect? If=1.7%and=0.8%, computethereal interest rateusing the exact formula and the approximationformula.

What will be transaction velocity of money when value of transaction is 15000 and money stack is 750?

Explain, with aid of diagrams, the effects of an expansionary fiscal policy under the classical theory and
the Keynesian model. Compare and contrast the effects under the two models. How would these
differences affect their conclusion on the role of government?