Economics Answers

If there was an increase in personal incomes of the Nation this could result in

An increase in the GDP. Would you agree with this, yes or no and why?

5. Consider the following national income model
Y = C+I+G+X-M
C=0.75(Y-T)
M=0.25Y
I=820
G=960
t=0.3
X=650
Find the equilibrium values of Y, C and M

Given that: depreciation = 90, indirect taxes = 70, subsidies = 30, payments to factors of production from abroad = 20, payments to foreign factors = 40.

Compute:

1) Gross national product (GNP) at market prices. (1 Mark)

2) Net national product (NNP) at market prices. (1 Mark)

3) Net national product (NNP) at factor cost. (1 Mark)

4) Net domestic product (NDP) at factor cost (1 Mark)

what is the meaning of Total Cost (TC), Total Variable Cost (TVC),Total Fixed Cost (TFC),Average Cost (AC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Total Revenue (TR), Average Revenue (AR) and Marginal Revenue (MR)

( WITH REFERENCES)

A company uses Kshs. 10,000 worth of an item during the year.
T
he
ordering costs
are Kshs. 25 per
order and carrying charges
are 12.5% of th
e average inventory value. Find:
i.
T
he economic order quantity,
ii.
Number of orders per
year
iii.
Time period per order
iv.
The total cost.

What is a certain sections of the budget where the government is spending money

The utility function is:
u(x,y)=32x^0.5+y
The marginal utilities are:
MUx=16x^-.5 MUy= 1 How do I derive the demand functions for x and y?
Thank you!

Assume the following balance sheet for Bank X. Assume all numbers are in millions of
dollars. The required reserve ratio is 20%
Assets Liabilities
Reserves 102 Deposits 300
Securities 68
Loans 130
a) What is the amount of required reserves?
b) What is the maximum amount that the bank can lend?
c) If the central bank decided to sell 25 million dollar worth of government securities to bank X,
how will this transaction affect the bank’s balance sheet? What is the balance of securities and
required reserves and excess reserves after this transaction happens?
d) Assume the deposits increase by 10 million dollars. How will this affect the balance sheet?
Will the reserves, securities and loans change?

1. Suppose in year 2014, the amount of money in circulation is $400 billion, the price level is
120 and the real output is $100 billion.
a) What is the velocity of money?
b) Suppose in year 2015, real output became $102 billion, and the Fed increased the stock of
money to $420 billion. What is the inflation rate from 2014 to 2015? (

5. Compare and contrast fiscal and monetary policies
Hint: Do the comparison in a table so it looks neat and organized. Elements to discuss include
(but not limited to) the objectives of each policy, the tools used, the implementing agencies,
limitations of each, etc.
6.
a) What is the quantity theory of money?
b) According to the theory, what would happen to prices and output if the Fed rapidly increases
the growth rate of money supply? Show on a graph. Explain both the short run and long run effects