Reference no: EM132639867

Macroeconomics questions

1. Suppose the price level in a particular economy equals 1.3 and that the quantity of real GDP demanded at that price level is $1,200. An increase of 0.1 point in the price level reduces the quantity of real GDP demanded by $220, and a reduction of 0.1 point would produce an increase in the quantity of real GDP demanded of $220. Draw the aggregate demand curve and show the price level and quantity of real GDP demanded at three points.

2. According to Alaskan state economist Mark Edwards, the multiplier effect of Alaska's trade with Japan is such that for every $1 billion exported from Alaska to Japan another $600 million is added to the state's economy.Matt Volz, "Trade Officials Hopeful for Japanese Recovery," Associated Press and Local Wire, June 22, 2004, BC cycle. Calculate the size of the export multiplier.

3. The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical University spend about £2,760 each in the local economy for a total of £50.45 million. In total, the impact of their spending on the local economy is £63 million."University Brings in £250m to Economy," Nottingham Evening Post, November 4, 2004, p. 37. Calculate the size of the student spending multiplier.