Economics Answers

Trace through with the assistance of diagrams, the effect of a fall in the money supply on investment demand and aggregate demand. What will happen to real GDP, unemployment and inflation? What factor(s) will determine the effectiveness of this policy

Draw an aggregate demand/aggregate supply diagram where equilibrium occurs below full employment level of output. Now show the impact of a leftward shift in the aggregate supply curve. What developments might cause such a shift

an early frost destroys a large percentage of the grape crop in British Columbia, how would this be expected to affect the market for Canadian wine, the market for beer, a substitute good, and the market for cheese, a complementary good?

Adam Smith remarked in “The Wealth of Nations’ concerning the balancing of the government budget. “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom” What problems might there be if the government decided to follow a balanced budget approach to its spending.

Draw an aggregate demand/aggregate supply diagram where equilibrium occurs below full employment level of output. Now show the impact of a leftward shift in the aggregate supply curve. What developments might cause such a shift?

Trace through with the assistance of diagrams, the effect of a fall in the money supply on investment demand and aggregate demand. What will happen to real GDP, unemployment and inflation? What factor(s) will determine the effectiveness of this policy.

Design an anti- recession stabilisation policy, involving both fiscal and monetary policies which is consistent with: (a) A relative decline in the public sector. (3 marks) (b) Greater income equality (4 marks) (c) A high rate of economic growth.

The national development plan of 2011 was developed in the light of the following nine challenges

1. To few people to work
2.The quality of education of school for black people is poor
3.infrastructure is poorly located and inadequately and under-maintained
4. spatial divides hobble inclusive development
5.the economy is unsustainable resource intensive
6. the public health system cannot meet demand and sustain quality
7. public service are uneven and often of poor quality
8.corruption level are high
9. south Africa remain a divided society

With respect of each of these challenges , provide a discussion on how the South African government can intervene to address these challenges based on macroeconomics theory.

The company has purchased a new machine. It’s purchase price is
50.000 EUR.Transportation costs amounted to 8.000 EUR, the
installation costs were aditional 2.000 EUR. It is estimated a useful life
of the machine of 5 years. Please, calculate the annual depreciation with
the straight-line depreciation method!

What is the principle of double entry accounting? Provide an example that would illustrate this principle