Microeconomics
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(a) Do you think that macroeconomic policy should be designed to achieve a measured unemployment rate of zero?
What relationship does the MPC bear to the size of the multiplier? The MPS? What will the multiplier be when the MPS is 0, .4, .6, and 1
What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei
Explain the concept of “economies of scale” and “increasing returns”.
State main sources of demand for foreign currency? Answer: The four main sources of demand for foreign currency are as follows: A) To buy services and goods from other countries. B) To send a gift abroad.
What does fiscal deficit in government budget mean? Answer: This means more borrowing on the portion of government.
Quetion: Describe the present economic crisis situation in Europe. Why has it been so difficult for the Europeans to find a solution to this problem? Comment on what implications the crisis may have for the rest of the
The consumer maximizes the utility whenever spending patterns causes: (i) Total outlays to increase each time prices are altered. (ii) Marginal utilities of each and every good consumed to be equivalent. (iii) Marginal utilities from the last cent spent on each and ev
A family’s newly constructed home can produce the service of shelter across several years, therefore from a macroeconomic perspective, this is most reasonably classified as: (i) economic capital. (ii) social infrastructure. (iii) market capitalization. (iv) a fi
Describe the following terms: (i) Business fixed investment (ii) Inventory Investment (iii) Residential construction Investment (iv) Public Investment.
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