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- 1.2 Which of the following conditions would not be studied by the macroeconomist?a) The level of national unemployment during 1988.b) The effect of government economic policy on the inflation rate during 1987.c) The effect of changing petroleum prices on the demand for coal.d) The effect of lower income taxes on the rate of economic growth.1.2 Which of the following conditions would not be studied by the macroeconomist? a) The level of national unemployment during 1988. b) The effect of government economic policy on the inflation rate during 1987. c) The effect of changing petroleum prices on the demand for coal. d) The effect of lower income taxes on the rate of economic growth.In his 2020 State of the Nation Address (SoNA), president of South Africa humbly noted... "Even if we [the government] were to marshal every single resource at our disposal, and engage on a huge expenditure of public funds,we would not alone be able to guarentee employment to the millions of people who are out of work". Without growth there will be no jobs,and without jobs there will be no meaningful improvement in the lives of our people". Using the South African SoNA 2020 as a reference,discuss the examples of the different ways that South African government intervenes in the economy.
- What is the relationship between the business cycle and economic growth, and how do government policies aim to manage economic fluctuations?A) The business cycle has no connection to economic growth, and government policies have no impact on fluctuations.B) The business cycle represents the periodic expansion and contraction of economic activity, and government policies, such as fiscal and monetary measures, aim to mitigate the negative effects of economic downturns and support long-term growth.C) The business cycle is solely influenced by consumer spending.D) Government policies only exacerbate economic fluctuations.Describe the effect of each of the following on “the potential income" and on “the standard of living" using macroeconomic production function and labor market equilibrium (Note: draw separate graphs for each.) (Hint: Review the slides and recordings of Lectures 3-4 for similar graphical analysis). a) Development of a new technology that increases the productivity of workers. b) An increase in the country's population. c) Establishment of new manufacturing factories by increased investments.Describe the effect of each of the following on “the potential income” and on “the standard of living” using macroeconomic production function and labor market equilibrium (Note: draw separate graphs for each.) (Hint: Review the slides and recordings of Lectures 3-4 for similar graphical analysis).a) Development of a new technology that increases the productivity of workers.b) An increase in the country’s population.c) Establishment of new manufacturing factories by increased investments.
- Use the graph shown below to calculate the growth rate of real GDP for a price increase of 20 percentage points in each case. Enter your responses below rounded to one decimal place. Price index AS 160 155 150 145 140 135 130 125 120 115 110 105 100 95 90 85 80 1050 1100 1150 1200 1250 1300 1350 1400 Real GDP a. If the present price level is 100, the growth rate of real GDP is b. If the present price level is 120, the growth rate of real GDP is %. %.10. As an alternative to the story of Robinson Crusoe, macroeconomists use the "aggregate production function," written as Y = AF(L,K,H,N), to link economy-wide output Y to the number of workers L, the stock of physical capital K, the stock of human capital H, the stock of natural resources N, and stock of technological knowledge A. With reference to this aggregate production function, please indicate whether each of the following statements is true or false. (a) The aggregate production function exhibits "constant returns to scale" if doubling the four inputs - workers L, physical capital K, human capital H, and natural resources N – while holding the stock of technological knowledge A fixed leads to a doubling of output. (b) The aggregate production function exhibits "constant returns to scale" if tripling the four inputs - workers L, physical capital K, human capital H, and natural resources N – while holding the stock of technological knowledge A fixed leads to a tripling of…I need help with a macroeconomic question: Why does canceling a law that make it difficult to fire workers decrease natural rate of uneployment?
- a) Consider an economy in which the labour force grows by 2.7 percent per annum, while the capital stock grows by 4 percent per annum. Suppose 55 percent of national income goes to labour and 45 percent to capital. i. If the residual were R = 0, what rate of growth would the economy achieve? Calculate the value of the residual (R) if the country's actual rate of growth has been 4.5 percent ii. per annum. b) Suppose that a developing economy can be modeled with the Solow growth model. The constant returns to scale production technology is: Y(t) = K(t)“ H(1)* (A(t)L(t))* Where Y(t) is output, K(t) is physical capital, H(t) is human capital, A(t) is the level of technology, and L(t) is labour. The parameters a, º and A are positive and there is perfect competition in the markets for output and the inputs. Assume that during the 2005-2018 period, the country's growth rate averaged 8.5 percent and a recent growth-accounting study showed that the residual accounted for only 1.2 percent of…6.5 Exercises Exercise 6.1 (Technological Progress and Long-Run Growth). Consider a Solow economy with population growth and technological progress. The evolution of the capital stock per efficiency unit of labor, denoted k1, is given by the law of motion (1+n)(1+ g)kt+1 = (1 – 8)kt +of(kt). Capital per efficiency unit of labor is defined as k, = Kt/(LEt), where Kt denotes the stock of physical capital, L, denotes population, and E is a tech- nological factor. Population grows at the rate n and the technological factor grows at the rate g. The subscript t denotes time, measured in years. The parameters d E (0, 1) and o > 0 denote, respectively, the depreciation rate of capital and the savings rate. The function f(k;) represents the produc- tion technology. Specifically, let Y, denote output and yt = Yt/(LEt) denote output per efficiency unit of labor. Then yt = f(kt). Assume that f(kt) = /k. 1. Find the steady-state stock of capital per efficiency unit of labor, de- noted k*, as a…An article in the Wall Street Journal observes: “For 2008, productivity grew an astounding 2.8% from 2007 even as the economy suffered through its worst recession in decades.” How is it possible for labor productivity to increase if output is falling?
