Reference no: EM131224032
Macroeconomics Homework
1. (Aggregate Demand and Supply) Review the information on demand and supply curves in Chapter 4. How do the aggregate demand and aggregate supply curve presented in this Chapter differ from the market curves in Chapter 4?
2. (Supply-Side Economics) One supply side measure introduced by the Reagan administration was cut in income tax rates. Use an aggregate demand/aggregate supply diagram to show what effect was intended. What might happen if such a tax cut also shifted the aggregate demand curve?
3. (Income Approach is GDP) How does the income approach to measuring GDP differ from the expenditure approach? Explain the meaning of value added and its importance in the income approach. Consider the following data for the selling price at each stage in the production of a 5-pound bag of flour sold by your local grocer. Calculate the final market value of the flour.
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Stage of Production
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Sale Price
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Farmer
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$0.30
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Miller
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0.50
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Wholesaler
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1.00
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Grocer
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1.50
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4. (Expenditure Approach to GDP) Given the following annual information about a hypothetical country, answer questions a through d.
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Billions of Dollars
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Personal consumption expenditures
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$200
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Personal taxes
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50
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Exports
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30
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Depreciation
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10
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Government purchases
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50
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Gross private domestic investment
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40
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Imports
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40
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Government transfer payments
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20
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a. What is the value of GDP?
b. What is the value of net domestic product?
c. What is the value of net investment?
d. What is the value of net exports?
5. (Consumer Price Index) Calculate a new consumer price index for the data in the following exhibit. Assume that current-year prices of Twinkies, fuel oil, and cable TV are $0.95/package, $1.25/gallon, and $15.00/month, respectively. Calculate the current year's cost of the market basket and the value of the current year's price index. What is this year's price index? What is this year's percentage compared to the base year?
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(1)
Quantity in Market Basket
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(2)
Prices in Base Year
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(3)
Cost of basket in Base Year
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(4)
Prices in Current Year
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(5)
Cost if Basket in Current Year
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Product
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(3) * (1) * (2)
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(5) * (3) * (1)
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Twinkies
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365 packages
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$ 0.89/package
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$ 324.85
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$ 0.79
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$ 288.35
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Fuel oil
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500 gallons
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1.00/gallon
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500.00
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1.50
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750.00
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Cable TV
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12 months
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30.00/month
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360.00 .
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30.00
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360.00 .
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$1, 184.85
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$1,398.35
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6. (Consumer Price Index) Given the following data, what was the value of the consumer price index in the base year? Calculate the annual rate of consumer price inflation in 2013 in each of the following situations:
a. The CPI equals 200 in 2012 and 240 in 2013.
b. The CPI equals 150 in 2012 and 175 in 2013.
c. The CPI equals 325 in 2012 and 340 in 2013.
d. The CPI equals 325 in 2012 and 315 in 2013.
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Discuss the role of sentencing philosophies in administering
: Compose an essay of 500 words where you discuss the role of sentencing philosophies in administering punishment by correctional agencies. As part of your discussion identify how the evolution of sentencing philosophies has impacted correctional ag..
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How scarcity is affected by private property rights in case
: To understand why many wild animals are scarce we need to look at scarcity in the context of private property. Explain how scarcity is affected by private property rights in the case study.
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Discuss economic benefits of debt relief for these countries
: There is currently a worldwide campaign to reduce the foreign debt of the least-developed countries. Discuss the economic benefits of debt relief for these countries.
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Company equity multiplier-debt ratio and roe
: Norton Company has a debt-to-equity ratio of 1.18, ROA of 12.23 percent, and total equity of $1,484,000. What are the company's equity multiplier, debt ratio, and ROE? (Roundanswers to 2 decimal places, e.g. 12.55 or 12.55%.)
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What is the value of net domestic product
: What is the value of GDP? What is the value of net domestic product? What is the value of net investment? What is the value of net exports? Calculate the final market value of the flour.
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How does an animal behavior aid survival and reproduction
: Explain why asexually reproducing organisms are generally found in environments that do not change very much through time, while sexually reproducing organisms are very successful in environments that change dramatically through time.
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How far in advance is it worth proving out reserves
: At a real discount rate of 5%/yr what is the longest delay tolerable between the start of exploitation and the start of oil delivery: i.e., how far in advance is it worth proving out reserves?
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What are the benefits of e-marketing for hubway
: Hubway: Boston's Online Bike-Sharing System. What are the benefits of e-marketing for Hubway? What are the potential drawbacks? 2. Thus far, Hubway essentially engages in business-to-consumer (B2C) e-marketing
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Which of the below is not a possible definition of validity
: Which of the below is the name of the method where you check a syllogistic argument for invalidity by abstracting away from it the form and then replacing it with new content where the premises are true and the conclusion false?
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