MACRO ECONOMICS

Why does fredman view of the demand for money suggeest that the velocity is predictable where as the Keynes view sugest the opposite..?

The overall population for Region A is 90 million people. The labor force contains 49 million people, 32 million people are employed, and 17 million are unemployed. What is the unemployment rate? Round your answer to the nearest whole number.

A potato farmer grows sells $2,000 worth of potatoes to a frozen food company. The frozen food company cuts, bags, and freezes the potatoes, and sells them as frozen French fries for $3,500. A food truck purchases the frozen fries, deep fries them, and sells them to patrons for $6,500. Determine the value added in each step, and the total value added to the national income.

Suppose that in Year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each. Using Year 1 as the base year, real GDP in Year 2 is:

Your son is graduating from high school and is about to enter the workforce. He has developed a strong curiosity about our economic system and how it works. Because you have a good understanding of basic economics, he has asked you to explain several concepts that are essential to an understanding of how the economy works. Your son has asked you to explain the following concepts and ideas:

• Absolute and comparative advantage: Explain how these concepts describe the benefits and costs of international trade.
• “Invisible hand”: What is it and how does it affect the decision-making process in our

Australia is the major trading partner for the United States. In 2010, U.S. exports toAustralia were more than $171 billion and imports from Australia totaled more than $224 billion.On January 1, 2009, the exchange rate between the Australian dollar and the U.S. dollar was1.224 Australian dollars = 1U.S. dollar. On January 1, 2011, the exchange rate was 1.05Australian dollars = 1 U.S. dollar. Explain how this change in exchange rates could impact U.S.consumers and firms?

Tina is the sole owner of Tina’s Lawn Mowing, Incorporated (TLM). In one year, TLM collects $1,000,000 from customers to mow their lawns. TLM’s equipment depreciates in value by $125,000. TLM pays $600,000 to its workers, who pay $140,000 in taxes on this income. TLM pays $50,000 in corporate income taxes and pays Tina a dividend of $150,000. Tina pays taxes of $60,000 on this dividend income. TLM retains $75,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to GDP, NNP, National income, compensation of employees, Proprietors’ Income, corporate profits, personal income, disposable personal income?

Following a period of stable inflation equal to its target value and output equal to potential, the country of Utopia is hit with an expansionary AD shock.
(i) Using the AD-AS model — with positively sloped AS curve and adaptive expectations — explain the short-run and long-run effects of the AD shock if it is temporary (i.e. lasts for one-period). (5 marks)
The central bank of Utopia uses the following rule for setting the value of its nominal policy interest rate.

Can you suggest any way of using economic forces to determine prize money? What about having an ‘open’ championship where men play women, with no distinction between men’s singles and women’s singles?…

Consider a model for goods market C=300+5/20Y, I=60+6/20Y-500i and assumethe financial market equilibrium is given by M-P=-80+0.1Y-1000i(a)solve for the IS curve by expressing the equilibrium level of output as a function of government spending G, and the interest rate i.(b)solve for the aggregate demand relationship between output,government spending,level of the money stock and the level of prices.(c)using the IS-LM framework,assume that prices are fixed,P=100,that M=100 and that G=50.Solve for the equilibrium level of output and the interest rate.(d)The government is unhappy with the equilibrium level of output and wants to increase it to Y=1000 using monetary policy.What is the required change in the level of money stock M?Why such a policy is unfeasible?(e)The government is unhappy with the equilibrium level of output and wants to increase it to Y=1000 using fiscal policy.What is the required change in the level of government spending G?(f)Compare your answers to(h) with your answer to (c) and explain.

A firm produces two different goods, with demand given by the following:

Pa = 500 – 15Qa - 2Qb and Pb = 200 – 2Qb Where Pa = price of good A, Pb = price of good B, Qa = quantity of good A and Qb = quantity of good B. The marginal costs for the two goods are 100 for good A and 75 for good B.

Determine optimal prices and quantities for each good

ASSIGNMENT ANALYSIS OF MACROECONOMIC INDICATORS

(due by Thursday, 6th August)

Marks: 6 points Word Limit: 700-1000 words Individual or group of two members

You are required to prepare a short essay (of 700-1000 words) by analyzing the relationship between macroeconomic indicators of your own interest from the data provided via blackboard. This is your opportunity to “think like an economist” and to show how economic analysis can inform our understanding of macroeconomic issues. Potential Macroeconomic Indicators for Analysis (some of those that we discuss in class):

 · Consumption, Investment, Government Spending and Exports

· Real GDP, Nominal GDP and GDP Deflator

· Consumer Price Index and Producer Price Index

· Unemployment rate and Labor Force Participation rate

· Money Growth and Inflation

· Inflation and Unemployment Some potential macroeconomic issues for analysis:

· Does higher GDP growth leads to lower unemployment?

· Does higher inflation leads to lower GDP growth?

· Does higher exports leads to higher GDP growth?

· Does higher money growth leads to higher inflation? Guidelines for the Assignment:

· The following are key areas to discuss and you can organize your essay around these areas using the tools (including graphs) and concepts learned in this course: Ø Overview – identify the key macroeconomic indicators to be discussed in the essay; brief overview of the theoretical relationship between selected variables Ø Empirical analysis – based on actual data (of a country), discuss the relationship between macroeconomic indicators preferably using graph and other statistical tools (such as correlation coefficient); discuss whether the relationship is positive, negative or ambiguous; discuss any interesting observation or trend Ø Conclusion – any concluding remarks about findings and what policy implications it offers

The length of the essay should be between 700 to 1000 words (a word count should appear at the end of the analysis). The analysis should be typewritten, although you can neatly hand draw any graphs that you might need for your analysis. Carefully proofread for spelling and grammatical errors.

· Students are required to submit an electronic copy by their due date. Marks will be deducted for late submission.

· The report is a team project, so every member in the group will receive the same mark. However the instructor will have discretion to deduct marks for any group member in case of lack of involvement and contribution.

· The University has very strict rules concerning plagiarism. If you use any other person’s work, words, or ideas, please cite and acknowledge the sources. Submission of work from another person, whether it is from printed sources or someone other than the student; previously graded papers; papers submitted without proper citations; or submitting the same paper to multiple courses without the knowledge of all instructors involved can result in a failing grade. Severe cases will be reported to university officials for appropriate sanctions.

· You are encouraged to discuss with me in case your assignment need to be further refined. Your assignment will be graded on the quality of your analysis and the effectiveness with which you communicate your ideas

Question 1: White House officials often exude more confidence than they actually feel about future prospects for the economy. Why might this be a good strategy? Are there any dangers inherent in it?
Question 2- Suppose everyone expects investment to rise sharply in three months. How would this expectation be likely to affect bond prices?
Question 3-. Suppose that every increase of $1 in real GDP automatically stimulates $0.20 in additional investment spending. How would this affect the multiplier?

Please answer these 3 questions in a 200 words or more.

The text defines the Malthusian trap as: “A point at which the world is no longer able to meet the food requirements of the population, and starvation becomes the primary check to population growth.” In other words, population will outpace food production.

Discuss whether you believe this trap has been avoided for the next 100 years. Consider government policies (like China’s one-child policy), the use of genetically engineered crops, social patterns of family size, and environmental factors.

Please answer in 200 words or more

The following set of equations describe an economy:

a. Find a numerical equation relating planned aggregate expenditure to output and to the real interest rate.
Instructions:Enter the value for mpc rounded to two decimal places.
PAE = (Click to select) + - r (Click to select) - + Y
b. At what value should the Fed set the real interest rate to eliminate any output gap? (Hint: Set output Y equal to the value of potential output given above in the equation you found in part a. Then solve for the real interest rate that also sets planned aggregate expenditure equal to potential output.)
Instructions:Enter your response as a whole number.
Real rate of interest: % NextVisit question mapQuestion