Question 5 The level of economic activities will go into contraction (recession) in all of the following situations except One. It is: An increase in the interest rate. An increase in foreign public debt. An increase in proportion of liquid assets in the total wealth of the society. O A decrease in investment expenditures.
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- 4) economy is in a recession and decrease(s) when the U.S. economy is expanding. A) Consumer spending B) Planned investment C) Net exports D) Unplanned investment usually increase(s) when the U.S.During the Covid-19 recession, from the fourth quarter of 2019 to the fourth quarter of 2020, consumer spending on residential construction ________ and consumer spending on services ________. Part 2 A. declined by 20 percent; increased by 20 percent B. increased by 5 percent; increased by 10 percent C. increased by 20 percent; declined by 5 percent D. declined by 25 percent; declined by 40 percent. The US consumer expenditure in durable goods decreased by 12%. In the US, the prices of oil quadrupled. In the UK, The US dollar appreciated by 12%. China is an important US trade partner. China's income quadrupled in the past 10 years, increasing the demand of many US products. At the same time, the Dow Jones Industrial Average (DJIA) increased by 12.5% over the past two quarters. The effect of these events on the US economy is: (show the final effects on your graph). The expenditure of durable goods in the US decreased by 14% in 2018. At the same time, minimum wage increased from $7.25 to $9 per hour, increasing production costs in the manufacturing industry and throughout several other industries.
- MACROECONOMICS Topic: Multiplier Investment ProblemCost of bldg.. =5MGross Revenue = 9.5 MOperating expense = 4MNominal interest rate = 12%Ongoing inflation rate = 8%a) Determine the real interest rateb) Determine the interest costc) How much will be added to the firm's profit?COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. a. Reflecting on the above situation justify whether the State Bank of Pakistan should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. b. Reflecting on the above situation justify whether the Government of Pakistan should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically.(d) Suppose government spending increases by some amount AGo to become Go+AGo. Show the change in Y and C as a response to this increase in spending.
- Need help with macroeconomic review questions! 1) How does the following transaction affect Canada’s GDP? Unless otherwiseindicated, assume that each of the subsequently mentioned people resides in Canada. (j) James Bond purchases a martini, shaken not stirred, for $12, in Calgary. 2) Consider a country with no government and no international trade. The country’seconomy has fixed prices and interest rates. Let C = 300 and I = 150 + 0.75Y . Whatis this country’s GDP? Show your work. 3) Consider a country with no international trade. The country’s economy has fixedprices and interest rates. Let C = 300 + 0.2Y , I = 250, and G = 0.5C. What is thiscountry’s GDP?What is a foreign exchange rate? (a) The rate at which the currency of one country trades for the goods ofanother country.(b) The rate at which one country’s goods trade for those of another country.(c) The rate at which currencies of different countries are exchanged.(d) The rate at which one country’s currency trades for gold provided byanother country. Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources other than income.(c) The maximum level of consumption that is financed from sources other than income.(d) shown by the slope of the consumption function. In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier. A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the…COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate.QUESTIONReflecting on the above situation, justify whether the Government of country A should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically. (150words)
- COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate.QUESTION Reflecting on the above situation justify whether the State Bank of country A should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. (150words)If a consumer purchases a foreign-produced hair dryer at a department store, the value of the hair dryer is: a. included in both consumer purchases and exports. b. added to capital investment in equipment but then subtracted from consumer purchases. c. included in consumer purchases but then subtracted as part of imports. d. added to imports but then subtracted as part of exports. Please explain your answer4. The Production function is given by Y= AK1/2L1/2 The economy initial level of capital stock is 60,000 billion dollars. The nominal interest rate is 4%, the inflation rate is 2% and the depreciation rate is 10% . The real price of capital is 3000. a) Calculate the value of the cost of capital. b) What is the current stock of capital and future stock of capital (next period) if the value of current production is equal to 20,000 and next year will be 22,000, assuming that interest rates, inflation and depreciation stay constant. c) Calculate net and gross investment in both periods (current and future).