QUESTION 3 Refer to the information provided in Figure 12.4 below to answer the questions that follow. 8. C. Price level D. AS₂ B Aggregate output Figure 12.4 ASO Refer to Figure 12.4. During the 2008-2009 recession, many firms in the United States reduced investment in new capital. If the economy was originally at Point A, this would have caused a movement to Point E. AS₁
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- Explain briefly what will happen to the performance of companies in the light of fears that the global economymight get into a recession2) The below five graphs show the development of key macroeconomic variables over the scope of three years in a certain country. Use them to draw an IS-LM-PC graph that captures the development in this country. Explain carefully what has happened. G Y t 3) China currently (2016) has a household saving rate of about 36 %. It has never been below 27 % in the last 30 years. What role do you think this high saving rate has for China's economic success? It has been argued that the low standard of living in many less developed countries depend on their poor institutions. Explain carefully what kind of "institutions" this argument refers to. 4) 5) The Swedish Fiscal Policy Council discusses public debt policy in a low interest environment in their latest report. The argue that "there are strong arguments in favour of low public debt despite low interest rates. For private operators, it may be rational to increase debt in a low interest rate climate, but this is not necessarily the case for…1. Assume that the economy is in a steady state and there is an unexpected permanent increase in the rate of depreciation δ. Using the appropriate diagram show: a. What is the best response to this change? b. Does consumption initially increase or decrease?
- In the United States, corporate profits tend to move _____. This means that when the economy is experiencing -- corporate profits decrease.Use the Aggregate Supply and Aggregate Demand Model below to answer thequestions that follow Examine the influence of government expenditure on investment in a nation.Use Jot Inc. Ltd a multinational construction company in which you are theChief Exec of the firm that that is highly diversified and receives funds toconstruct highways and other government-funded projects. Also, explain thefactors that cause the Aggregate Demand curve to be downward sloping leftto right1.11 If desired investment exceeds actual investment, then... a) The economy is in a recession. b) Inventories are less than the desired level. c) Inventories are accumulating beyond the desired levels. d) Cyclical unemployment exists. 1.12 Read the following extract and answer the question that follows. Women's empowerment movement eyes 40% of government spending accreditation ..Last year the South African government affirmed its support for women-owned businesses as part of its commitment to ensuring that gender equality in Africa's most advanced economy was achieved. President Cyril Ramaphosa said then: “We are going to drive women's economic inclusion through public procurement. We have set the target of ensuring that 40% of goods and services procured by public entities are procured from women-owned business." Source: https://www.news24.com/citypress/news/womens-empowerment-movement-eyes-40-of-government- spending-20210819 Accessed: 23/08/21 The above decision by the South African…
- 3 Explain how any technological advancement (increase in our A from production function) could affect investment, aggregate demand and income. Please show your answer by using graphs, models and explaining thoroughly.1.11 If desired investment exceeds actual investment, then…a) The economy is in a recession.b) Inventories are less than the desired level.c) Inventories are accumulating beyond the desired levels.d) Cyclical unemployment exists. 1.12 Read the following extract and answer the question that follows. Women’s empowerment movement eyes 40% of government spending accreditation…Last year the South African government affirmed its support for women-owned businesses as part of its commitment to ensuring that gender equality in Africa’s most advanced economy was achieved. President Cyril Ramaphosa said then: “We are going to drive women’s economic inclusion through public procurement. We have set the target of ensuring that 40% of goods and services procured by public entities are procured from women-owned business.” Source: https://www.news24.com/citypress/news/womens-empowerment-movement-eyes-40-of-government-spending-20210819The above decision by the South African government is an example…During the 2007–2009 recession, the value of commonstocks in real terms fell by more than 50%. How mightthis decline in the stock market have affected aggregatedemand and thus contributed to the severity of therecession? Be specific about the mechanisms throughwhich the stock market decline affected the economy.
- 1.11 If desired investment exceeds actual investment, then…a) The economy is in a recession.b) Inventories are less than the desired level.c) Inventories are accumulating beyond the desired levels.d) Cyclical unemployment exists. 1.12 Read the following extract and answer the question that follows. Women’s empowerment movement eyes 40% of government spending accreditation…Last year the South African government affirmed its support for women-owned businesses as part of its commitment to ensuring that gender equality in Africa’s most advanced economy was achieved. President Cyril Ramaphosa said then: “We are going to drive women’s economic inclusion through public procurement. We have set the target of ensuring that 40% of goods and services procured by public entities are procured from women-owned business.” The above decision by the South African government is an example of…a) Market participation.b) Government spending.c) Commercialisation.d) Nationalisation. 1.13 Read the following…arrow_forward Question Asked Aug 18, 2020 25 views Consider the following model of an economy operating with fixed wages, prices and interest rates and hasexcess capacity. Adsume all figures are I Zambian kwacha. C=100+0.8yd, T=100+25Y, G=980 and I= 500 Where c is consumption, yd is disposable income, T is taxes net of transformers, G is government spending on goods and services and I is investments. Is the government running a surplus or deficit Show the impact of a reduction in government spending by 80 on the equilibrium level of national income Illustrate your new equilibrium in the same Keynesian cross diagramBriefly explain the reason for the near-horizontal shape of the SRAS curve on its far left.