Solve all the questions below.,,,
2) Consider the following demand and supply functions: Qi =24-4P, demand Q;=-6+2E, _, P, supply and expectations generator E, P, = P._ a) Calculate the long run price and quantity in this market. Justify your answer. b) Is this system a stable or unstable Cobweb model? Justify your answer. c) Beginning at P, =4 and Q, =8, calculate three years of prices and quantities in this market. Suppose instead that the demand and supply functions are: Q: =24-2P, demand Q;=-6+4E,_P, supply d) Repeat questions a) through c) where in c) part you begin with P, =4 and Of =16.2009 Price 2009 Quantity (base year) 2010 Quantity 2010 Price Food 6 $2.5 8 $2.5 Clothes 5 $6 10 $10 Entertainment 2 $4 5 $5 The outputs and prices of goods and services in Country X are shown in the table above. Assuming that 2009 is the base year, calculate (a) and (b). (a) The nominal gross domestic product (GDP) in 2010 (b) The real GDP in 2010 Note for sample question: This question is from a past AP Exam in which showing work was not required. Remember that on this year's exam, students will be expected to show their work on any calculation questions. (c) If in one year the price index is 50 and in the next year the price index is 55, what is the rate of inflation from one year to the next? (d) Assume that next year's wage rate will be 3 percent higher than this year's because of inflationary expectations. The actual inflation rate is 4 percent. At the beginning of next year, will the real wage be higher, lower, or the same as today? (e) Assume that Sara gets a fixed-rate loan from a bank when the expected inflation rate is 3 percent. If the actual inflation rate turns out to be 4 percent, who benefits from the unexpected inflation: Sara, the bank, neither, or both? Explain.1. You are given the following information about an economy: Equations to Derive IS C = 50 + 0.90Ya - 5r T =0.10Y or Yd = 0.90Y I - 150 - 15r G = 350 X = 150 -4r IM = 100 + 6r +0.11Y Monetary Policy Equation r = 2+0.5x AD-AS Equations * = 36-0.02Y (AD) x = -1.5 + 0.005Y (AS) a) Derive the equation for AD using the IS and MP equations. b) If r = 5, calculate the value for equilibrium income two different ways. C) Calculate the values for X-IM and T - G at equilibrium income. d) Using graph paper, plot the IS, MP, and AD-AS-LRAS curves if Y, = 1,500 and illustrate the equilibrium r, a, and Y. e) For each of the following changes, calculate the equilibrium values for r, x, Y, X-IM, and T-G and illustrate the changes in the diagrams drawn for part d): i. An increase in autonomous exports of 60. ii. Yo increases to 1,600, The central bank reduces the rate of inflation to 2% .REQUIREMENT: Learners are required to read the Prihatin Rakyat Economic Stimulus Package that was announced by the Prime Minister of Malaysia on 27th March 2020. Discuss the effects of the economic stimulus package to the economy of Malaysia. Write your views on the industry that would benefit the most from the stimulus package. Also, provide your views on the economic stimulus package in general. 1) Introduction of the Prihatin Rakyat Economic Stimulus Package in Malaysia 2) Discussion of the effects of the stimulus package in Malaysia 3) Views on the industry that would benefit the most from the stimulus package 4) Views on the economic stimulus package in Malaysia (in general) 5) Summary
