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Why are informal financial markets used in developing countries? Give an example of an informal financial market.
What factors could cause the actual expansion of the money supply to differ from that given by the deposit expansion multiplier?
The Federal Reserve System divides nation into 12 districts. List the 12 cities where district banks are located. Which Federal Reserve district do you live in?
Describe the quantity theory of money, defining each variable. Explain how changes in the money supply can affect real GDP and the price level.
Illustrate effect of product differentiation on haircutters? Why society prefer situation in which entry can occur to a situation in which entry is restricted?
How would you derive the demand for milk at the local grocery store? How would you derive the demand for tuna?
The government is considering the adoption of a higher standard of success in tests for pharmaceuticals. Why is national defense called a public good?
Explain why the number of elephants and rhinos is declining in nations where the animals are housed on national parks and rising in nations.
Why may the supply-induced business cycle theory be an inadequate explanation of most business cycles? What do you understand by the term rational expectations?
What do you understand by the term real business cycle theory? How does it contrast with demand-induced theories of the business cycle?
Under what circumstances would you expect Say's law of markets not to operate to maintain full employment?
Discuss the importance of forecasting in the context of successful macroeconomic policy formulation and implementation.
What do you understand by the term public choice theory? How does public choice theory undermine Keynesian economics?
Explain, using appropriate diagrams, how fiscal policy might be used to combat (a) an inflationary gap, and (b) a deflationary gap, in the economy.
Identify and illustrate the policy options to deal with these pressures from both the demand-side and supply-side of the economy.
Distinguish between policy targets, policy instruments and policy goals. Give examples of each.
Differentiate between demand-side and supply-side policies. Provide a short report for a country of your choice highlighting the current economic situation.
Why might increases in aggregate demand simply lead to a higher price level rather than a higher real GDP?
How might governments attempt to influence long-run aggregate supply and there-fore potential GDP?
Explain the composition of aggregate demand. Explain under what circumstances the aggregate demand curve might shift (a) to the right (b) to the left.
Explain how the multiplier and accelerator effects may impact together to lead to fluctuation. What steps might government adopt to reduce economic instability?
Calculate the change in national income that can be expected from the £2bn of extra government spending.
The predicted sharp rise in consumer spending is attributed by economists to lower planned. Using a consumption function diagram illustrate the expected effect.
What is 'fiscal drag'? How might its economic effects be neutralised? What do you understand by the term 'crowding-out' and when is it likely to most prevalent?
What do you understand by the term money supply? Giving examples from your own country, distinguish between narrow money and broad money.