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The demand and supply for soft drinks are
given by Q = 10-P and Q = 2+2P, respectively. Suppose now the government imposes a per unit subsidy of $1.5 on the sellers.
a)what is the price received by the sellers after the subsidy has been imposed?
(Unit: RM million):
(S) = -500 + 0.15Yd
(I) = 400 - 150r
(G) = 500
(T) = 200 + 0.1Y
(Ms) = 5000
Transaction money demand = 0.25Y
Speculative money demand= 500-250r
P = 2
(a) Derive the functions of IS and LM in terms of interest rate (r) and income (Y).
(b) Calculate the slope of the IS and LM curves.
(c) Determine the equilibrium of interest rate and aggregate output in the economy.
(d) If the autonomous consumption has increases to RM500 million,
i. Calculate the new level of economic equilibrium.
ii. Calculate the size of the horizontal and vertical movements that occur.
iii. Sketch the changes that occurred before and after the increase in autonomous consumption and explain.
(e) If the real money supply decreases by RM200 million,
i. Calculate the new level of economic equilibrium.
ii. Calculate the size of the horizontal and vertical movements that occur.
iii. Sketch the changes that took place before and after the increase in the real money supply and explain.
The following data has been extracted from the business information report for Kijani Prospects Ltd.
Business Information Report (extract) on Kijani Prospects Limited
#
Ratio Calculated
2020
2021
1) Current Ratio
2.5:1
2.2:1
2) Acid Test Ratio
0.7:1
1.1:1
3) Receivables Collection Period
49.5 days
33.3 days
4) Payables Settlement Period
24.8 days
28.7 days
5) Inventory Turnover Rate
80.7 days
63.5 days
Analyze the changes for each between 2020 and 2021, showing the potential impact upon Kijani Prospects Ltd
in general and making reference to its management of its working capital in particular. (10 Marks)
A key feature of macro economics model is whether it assumes that prices are flexible or sticky. According to most macro economists,models with flexible prices describe the economy in the long run,whereas models with sticky prices offer a better description of the economy in the short run. Which one of thoughts described above do you support?why?support your answer with evidence.
A farmer grows a bushel of wheat and sells it to a miller for 100 dollar. The miller turns the wheat into flour and sells the flour to a baker for 300 dollar. The baker uses the flour to make bread and sells the bread to university for 600 dollar. The university students eat the bread. What is the value added by students?what is GDP in this case?
Find a data on GDP and its components,and compute the percentage of GDP for the following components for the years 1950,1975,and 2000.
A. Personal consumption expenditure
B. Growth private domestic investment
C. Government purchases
D. Net exports
E. National defence purchases
F. State and local purchases
G. Imports
Find a data on GDP and its components,and compute the percentage of GDP for the following components for the years 1950,1975,2000.
A. Personal consumption expenditure.
B. Growth private domestic investment .
C. Government purchases.
D. Net exports
E. National defense purchases
F. State and local purchases
G. Imports
Explain the relationship between inflation and unemployment, both in the short run and long run.
Juan Hernandez is a successful business owner. His landscaping business is growing, and a few months ago he decided to bring in somebody to manage his office operations since he had little time to keep on top of that activity. However, this individual can’t seem to make a decision without agonizing about it over and over and on and on. What could Juan do to help this person become a better decision maker?
1. The initial price of a cup of coffee is Php1, and at the price, 400 cups are demanded. If the price falls to Php0.9, the quantity demanded will increase to 500
a. Calculate the (arc) price elasticity of demand for coffee. Show the solution.
b.Based on your answer to question 1.a., is the demand for coffee elastic or inelastic?
c.Based on your answer to question 1.a., if the price of coffee is increased by 10%, what will happen to the revenues from coffee? Carefully explain how you know.
