Macroeconomics Answers

Which of the following events should occur for the AD curve to shift to the right?

a. 

The minister of finance reduces the tax rate.

a. The minister of finance reduces the tax rate.

b. 

The future price level is expected to fall.

b. The future price level is expected to fall.

c. 

The increase in general prices due to increases in the price of petrol.

c. The increase in general prices due to increases in the price of petrol.

d. 

The future interest rate is expected to fall.

When the AS curve is very steep, a decrease in AD will lead to…

a. 

an upward movement along the AS curve.

a. an upward movement along the AS curve.

b. 

higher price level and a higher level of income.

b. higher price level and a higher level of income.

c. 

a fall in the price level and little or no decrease in output and income level.

c. a fall in the price level and little or no decrease in output and income level.

d. 

a fall in the price level and no change in output and income.

What is the reason for the downward slope of the AD curve?

a. 

As the price level increases, aggregate output and income increase.

a. As the price level increases, aggregate output and income increase.

b. 

As the price level decreases, the central bank will reduce the interest rate leading to increase in investment and therefore aggregate demand and output also increase.

b. As the price level decreases, the central bank will reduce the interest rate leading to increase in investment and therefore aggregate demand and output also increase.

c. 

Decrease in government spending and increase in tax.

c. Decrease in government spending and increase in tax.

d. 

An increase in autonomous consumption.

Structural unemployment is best defined as unemployment caused by:

a.

A long-term decline in a particular industry

b.

A mismatch between available jobs and the unemployed

c.

Defects in the industrial and commercial structure

d.

A switch from labor-intensive to capital-intensive production methods

What is Economic growth

1.What is the significance in studying economics?

What are the importance of economic growth to a country

The demand and supply function of a good are given by

P = -3Qd +100

P =2Qs +50

Where p, Qd and Qs denotes the price, quantity demanded and quantity supplied respectively.

A. Calculate the equilibrium price and quantity.

A new fixed tax of £5 per good imposed by the government.

B. Calculate the new equilibrium price and quantity?

C. Who pays the tax?

Given the above demand equation if fixed costs are 15 and variable costs are 40 per unit.

D. Obtain and expression for profit in term of Q.

E. Sketch a graph for profit against quantity.

F. Find the breakeven point.

G. Find the quantity of products sold that given a profit of 42.

H. Find the maximum profit and the value of Q at which it is achieved.

The demand and supply function of a good are given by

P = -3Qd +100

P =2Qs +50

Where p, Qd and Qs denotes the price, quantity demanded and quantity supplied respectively.

A. Calculate the equilibrium price and quantity.

A new fixed tax of £5 per good imposed by the government.

B. Calculate the new equilibrium price and quantity?

C. Who pays the tax?

Given the above demand equation if fixed costs are 15 and variable costs are 40 per unit.

D. Obtain and expression for profit in term of Q.

E. Sketch a graph for profit against quantity.

F. Find the breakeven point.

G. Find the quantity of products sold that given a profit of 42.

H. Find the maximum profit and the value of Q at which it is achieved.