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1. Consider a macro-economy was initially at equilibrium level. Using the Short Run aggregate demand and aggregate supply model graphically illustrate And discuss the short-run of the following events upon economic activity: (a) The central bank cuts interest rates (b) There is an increase in spending on infrastructure by the Government. (c) An increase in international economic turbulence. (d) An appreciation in the foreign exchange rate value of the economy's currency.2. Collect an article from an Australian newspaper that relates to the current Australian macro-economy or a macroeconomic issue or problem. In a paragraph indicate which section of the course it applies to, why you selected the article and provide a brief summary of what the article is actually about 3. Many people find the current inflation figures for Australia are unbelievable especially when many complain about the rising cost of living. Why might the official statistics be inaccurate? 4. What would happen to GDP if people decide to save more out of their current income? What eventually happens to the level of savings? What would happen to equilibrium income if there is a sustained rise in private investment spending? 5. State the difference between: -An economic contraction and economic expansion. -between appreciation and depreciation -between the trade deficit and the budget deficit 6. Under what economic circumstances is monetary policy most effective? When is fiscal policy most effective (2 marks)7. Distinguish between ongoing demand pull and ongoing cost push inflation. Carefully draw them. Why might it be difficult to establish the extent to which a given rate of inflation is either demand pull or cost push?8. The Australian economy has gone nearly 22 years without a recession meaning a whole generation of Australians have grown up never experiencing a recession or mass unemployment. How has Australia achieved this? Was it luck, good economic management or some other factor? 9. Why do economists study economic indicators? What are some examples of Leading indicators?10. The Australian dollar has fallen by 12 US cents in the last year. What are the macroeconomic consequences, or benefits and costs, of this currency movement?
Consider a firm selling two different products at two different plants. The cost function for both plants is given by C (q 1 , q 2 ) = q 1 2 + αq 1 q 2 + q 2 2 .
Elucidate what are some of the models that predict the effects that reducing protection of imports will have on factor price. Briefly explain the effects shown by these models.
Explain how might knowing this affect you as the manager of a large firm.
During the Kennedy administration and Reagan administration Congress decreased tax rates on individuals. Determine the effect of these rate reductions on revenue flow into federal treasury?
Over the past two decades, according to the U.S. balance of payment, the current accounts and the capital account balance tend to move in same direction.
Assume the economy is slumping into recession and needs a fiscal policy boost.
What takes palce to output, the optimal scale of a firm, and price if there is a free entry into the market.
You are bullish on Avusa stock. The current market price is $50 a share, and you have $5000 of your own to invest.
Discuss the relationship between each of the following variables based on the experience of U.S. economy over the past 30 years.
Explain how might we interpret this statement in terms of cost curves and revenue curves.
Over the past fifteen years the Heritage Foundation and Wall Street Journal have joined forces to make an annual Index of Economic Freedom.
The industry will also incur expenses in the amount of $150,000. Explain how many shares must the industry sell to net $20 million after underwriting and flotation expenses.
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