Economics Answers

Which of the following will shift the aggregate demand curve to the left?

1) An increase in the general price level.
2) An increase in productivity.
3) An increase in the net exports.
4) A reduction in government spending.

Which one of the following statements regarding the aggregate supply is/are correct?

a) An increase in the cost of labour will result in a decrease in both aggregate supply and the general price level.
b) A decrease in the prices of imported capital will cause an increase in the aggregate supply and a decrease in the general price level.
c) A decrease in productivity will cause a decrease in the aggregate supply and a decrease in the general price level.

1) b and c
2) a and c
3) b
4) a
5) All the statements are correct

Which of the following statements regarding the AD-AS model is/are correct?
a) An expansionary fiscal policy occurs when either consumption spending, or government spending are increased.
b) A contractionary monetary policy occurs when there is a decrease in interest rates, ceteris paribus
c) In the AD-AS model, demand management policies can be used to influence aggregate demand and aggregate supply.

1) All statements are correct
2) b
3) c
4) a and b
5) a and c

In the AD-AS model...

1)the AS curve illustrates the levels of total expenditure in the economy at various price levels.
2)we cannot study monetary policy because the model assumes interest rates to be fixed.
3)the level of economic activity is determined by aggregate supply, given the general prices in the economy.
4)we seek to explain the general price level and the aggregate production of goods and services.

Draw a production possibility frontier (PPF) with quantity of smartphones on the X-axis and quantity of cars on the Y-axis (label graph)

If (A) -------- interest rates when the output gap and the (B) --------- both fall when a central bank applies a taylor rule in the management of its monetary policy

Hi. Is it possible to do Economic Impact Analysis / Input/Output Model (by W Leontief) on Demonetisation? If it possible, how to do?

As a result of pressure from the south African clothing and textile workers union (SACTWU), the south African government has decided to increase the tariff on textiles. Explain who would gain and who would lose as a result of this decision taken by the South African government.

Supposed investor A has $20,000 in his account and derives 4 utiles of utility from this amount and would derive 5 utiles of utility if he had $40,000. He is faced with a choice to invest the $20000 in a project that has 60% probability of earning a profit of $20000 and 40% probability of loosing. Is the manager likely to invest in the project?
Aproject has expected risky cash flows of $45,000 in perpetuity. Given that the risk adjusted rate of return for the project is 15%, and the risk free rate is 5%, what are the certainty equivalent cash flows in perpetuity?

Explain in details the OMO process and its implications for the cash rate interest rate inflation and GDP draw buy hand effect of the OMO process using the MD MS diagram