Your father has just stated that countries with high levels of debt-to-GDP ratios are poor countries and that countries with low levels of debt-to-GDP ratios are rich countries. Explain why you agree or disagree with this statement and provide real world evidence to support your argument.
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- COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost
economic growth . As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: - Your father has just stated that countries with high levels of debt-to-GDP ratios are poor countries and that countries with low levels of debt-to-GDP ratios are rich countries. Explain why you agree or disagree with this statement and provide real world evidence to support your argument.
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- Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHe8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH€2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GH¢1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana…Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHe8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH€2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GH¢1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana…Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHc8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH¢ 2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GH$1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana…
- COVID-19 has impacted the global economy, spreading across nations with alarming speed, infecting millions. According to Statista, India saw an unemployment rate of 6 percent in January 2021, higher than the pre-pandemic level. Unemployment rate had gone up to nearly 24 percent in April 2020. This was possibly a result of a decrease in demand as well as the disruption of workforce faced by companies. Despite a modest recovery, the economy is still far-off the pre-pandemic level. Given this scenario, which of the following might happen? Consumer spending on luxury goods will increase. Consumer spending for food will increase. Government expenditure will increase. Investment for pharmaceutical products might increase.Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GH¢8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH¢2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of GH¢1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on Ghana…With lockdowns currently imposed across Europe and North America until mid-April, even in the best-case scenario it will take at least until mid-June for market confidence to be restored in these economies. The implication is that nearly six million workers in Bangladesh’s formal sector – which is largely manufacturing – will be without steady work for an extended period.” a) Which part of the production function do you think the issue mentioned above will affect? Draw two diagrams to show Real GDP and LRAS is affected in the long run. The government should also consider an unconditional cash transfer program for an initial period of three months at a rate of $95 per month, which corresponds to the minimum wage for the formal sector in Bangladesh. This would cost the government roughly $14 billion, or 4% of GDP. While this sort of cash transfer program always suffers from targeting issues, Bangladesh enjoys a highly sophisticated mobile financial services network, which could…
- Emerging economiesEmerging economies that were growing rapidly, particularly Brazil and Russia, are both now in recession which means the income of the economy is shrinking. Commodity prices have played a considerable role in sending these economies into reverse, although this has been compounded by political developments in these countries.The previous major engine of global growth, China, has also seen its economy slowing. Although still growing at a brisk pace compared with mature western economies, by the double digit standards that China set for itself in past decades it Is unquestionably experiencing slower growth. This has happened at the same time as, and is related to, China rebalancing its economic growth model from reliance on exports and capital investment towards domestic consumption and services. One consequence of this has been lower demand for imported commodifies, which has been one factor depressing global prices, particularly in areas like metals.In contrast to…Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Nigeria’s for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Nigeria saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, ₦5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was ₦ 7,000.00. Total Government expenditure (G) which stood at ₦8,000.00 was supposed to be financed by a lump sum tax of ₦2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at ₦2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of ₦1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on…Suppose that the central bank in the UK (The Bank of England) decides to raise interest rates because it is worried about high inflation. As a result, interest rates in the UK become higher than interest rates in the REST OF EUROPE. This acts as an incentive for EUROPEAN investors to increase the amount of funds they invest in British (UK) interest bearing assets. In order to increase their purchases of those UK assets, which are priced in PST, EUROPEAN investors have to convert EUR into PST. This conversion, in turn, increases the demand for PST. Based on the above information, please explain what will happen to the EUR–‐‑PST exchange rate. In other words, will the increased demand for PST, make PST gain value (appreciate
- Question #2. 13 On April 27, 2023, the U.S. Bureau of Economic Analysis (BEA) released the data on GDP growth for the US economy for the first quarter of 2023 and revealed that the economy grew sluggisly by only 1.1 percent. Based on this report, suppose the U.S. consumers and businesses start to become pessimistic about the direction of the economy and eventually cut consumer and business spending, analyze using the IS-LM and AD-AS frameworks the short and long-run h effects of such a shock on prices, output, and real interest rate. # 3 E $ 4 Q Search R 15 % 5 f6 E L 6 17 4+ lyje Y 18 7 90 * 19 Page of 2 9 O f 112RISING FOOD PRICES DUE TO RUSSIA-UKRAINE CONFLICT When Russia invaded Ukraine in February 2022, no one knew how long the conflict would last, or how deep the impact would be for Europe or the rest of the world. As the war approaches its third month, the outlook from the conflict does not look good. Against an already global inflationary pressures due to rising food and energy prices and disrupted supply chains following the coronavirus pandemic (Covid-19), the war between Russia and Ukraine is increasing supply and demand tensions, affecting consumer sentiment and global economic growth. The World Bank and International Monetary Fund (IMF) expected supply shocks to increase dramatically for commodity prices in cases where Russia and Ukraine are major suppliers. Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn. Reduced supplies of these commodities have driven their prices up sharply. The impact of the war in Ukraine was already slowing…Macropoland, a country that is a natural gas and oil importer, has a natural rate of unemployment (at the full employment level of GDP) that is about 4.5%, and the long run average rate of inflation over time has been about 2%. However, during the period 1973-1974, the country experienced an inflation rate of about 15% while simultaneously experiencing unemployment of nearly 13%.At the present time, Macropoland is experiencing very sluggish consumption and investment (a result of a fall in the housing market), and unemployment has again edged up to around 9%. Inflation is very low at 0.4%.Macropoland has just hired you as their economic advisor. You have a big job ahead of you. Using your knowledge of aggregate demand and aggregate supply, can you explain what happened in these two time periods?Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical…