Economics Answers

Which of the following statement is correct about the introduction of taxation in the Keynesian model?
1. It increases the value of the multiplier
2. It shifts the aggregate expenditure curve upwards
3. It increases net exprts
4. It swivels the aggregate expenditure curve downwards

C=100+0,80Y, what is the savings function in the simple Keynesian model?
1. S=-100+0,20Y
2. S=100+0,20Y
3. 0,20
4. 5

Which of the following is likely to shift the consumption schedule downwards?
1. Expectations of a fall in interest rates
2. Consumer prices are expected to fall
3. Currently less stock of durable goods in the possession of consumers
4. The expectation of a future rise in the consumer price index

A sole trader incurred a loss of £10,000 during his most recent accounting period, yet

had more money in his bank account at the end of the period than he had at the

beginning of it. Which of the following, on its own, could explain this?

a. The introduction of £15,000 new capital during the period.

b. The purchase of Non-current assets during the period.

c. His customers taking longer than normal to pay the amounts they owe to him.

d. An increase in the amount of his Inventory over the course of the period.

Describe with the help of a diagram interaction between the Short-run Average Total
Cost curves and the Long-run Average Total Cost curve given that the firm has five
plant sizes to consider viz. I, II, III, IV and V (in ascending order of their size),
wherein plant size III turn out to be optimal plant size in the long run.

What would happen to multiplier and output if propensity to consume is greater than one

1. What is progressive tax
2. Consumption fuction
3. Autonomous consumption

Question :A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. Analyze the effects on the country’s current account balance, national saving, and investment, and on domestic and world real interest rates. Assume that, before the capital controls were imposed, the large country was running a capital and financial account surplus.

According to department of Labour's new rates domestic workers working in area A (bigger metropolitan areas)who work more than 27 ordinary hours per week, must be paid minimum wage of R13,69 per hour. Workers who works fewer than 27 hours per week must be paid a minimum wage of 16,03 per hour. With the aid of a diagram, discuss the welfare effects of this new legislation if the new minimum wage is (1) below the equilibrium wage and (2) above the equilibrium wage rate with labour hours as your quantity variable

Assuming that the government decides to lower the level of production and employment caused by the covid 19 by cutting down taxes (personal income and corporate taxes) explain by the use of graph, the impact of such fiscal policy on aggregate output. In your explanation, describe the interaction between the money market is-lm and ad-as model