1. In the circular flow model, a state of equilibrium is reached when: A) savings are equal to investment. B) government spending is equal to taxation. C) imports are equal to exports. D) total injections are equal to total withdrawals. E) production is equal to expenditure is equal to income.

The consumption function for a closed economy with no government sector is given by theequation:C = £200 million + 0.8 Ywhere C is aggregate consumption and Y is national income.(i) Calculate the value of aggregate savings if the level of national income is £4000 million.(ii) Calculate the equilibrium level of national income if the level of planned investment is£600 million(iii) Calculate the level of aggregate consumption at the equilibrium level of nationalincome if the level of planned investment is £1000 million(iv) Calculate the change in national income if planned investment rose from £600 millionto £800 million

The semiconductor chip shortage is limiting the production of new cars (decrease in supply). At the same time, fewer cars are being traded-in for upgrades(decrease in demand). How will this affect the equilibrium price and equilibrium quantity in the used car market? O The equilibrium price increases, but the equilibrium quantity of used cars decreases. The equilibrium price increases, but the equilibrium quantity cannot be determined. O The equilibrium price decreases, but the equilibrium quantity of used cars increases. O The equilibrium quantity of used cars decreases, but the price cannot be determined.

Solve the following problem. Round dollar amounts to the nearest cent. Round other amounts to the nearest tenth. Write rates as percents to the nearest tenth of a percent.

If a 3% increase in the price of corn flakes causes a 6% decline in the quantity demanded, what is the elasticity of demand?

According to the Quantity Theory of Money, the Federal Reserve reducing reserve ratio will lead to _______ money supply which will only lead to _______   higher, inflation lower, inflation higher, booms lower, booms.

The demand for money in the economy sometimes for the motive of transactions, speculation, and precaution. The macroeconomic balance in the presence of money is shown by the curve following. A. How do you read and understand the following curve? B. The relationship between the demand for money for transactions and the demand money for this speculation why the angle is 45°? In graph explain what happens when there are: A. monetary contraction! B. monetary expansion!

Suppose the market demand curve is given by Qd = 78 − 10P, and the market supply curve is given by Qs = 13 + 3P. What is the equilibrium price and quantity?

Considering an economy with two labor markets – one for agricultural workers and one for manufacturing workers. Suppose there is a Dutch Disease which explains about a major market failure originated in the existence of cheap and abundant natural or human resources that keep overvalued the currency of a country for an undetermined period of time, thus turning non profitable the production of tradable goods using technology in the state-of-the-art. It is an obstacle to growth on the demand side, because it limits investment opportunities. Suppose initially that neither is unionized what will happen to these conditions? a) If manufacturing workers formed a union, what impact would you predict on the wages and employment in manufacturing? b) How would these changes in the manufacturing labor market affect the supply of labor in the market for agricultural workers? c) What would happen to the equilibrium wage and employment in this labor market?

(3) How to interpret relationship between changes of GDP growth rate and unemployment rate? Now go to your notes (slides). Is the relationship you plotted similar as the Okun's Law predicts? Suppose you got a relation as GDP = a + b * UNemp, Are the coefficients of a and b are close to the value of Okun's Law? (4) Now repeat the plot you did in part (2) above. However, this time you use the sample only from 2000 to 2019. Any change to the relationship? How is the value of a and b in this sample?