Macro Economics Homework Help

Macro Economics Assignment Help

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About Macro Economics:

rate

The term macro economics is derived from the Greek

word Macro meaning large. This domain of economic
study deals with the performance and structure of the
economy as a whole rather than that of the individual
markets. Macroeconomic study deals with the
economic indicators like the GDP (Gross Domestic
Products), rates of unemployment, and the methods
by which these indicators interplay to impact the
functioning of the whole economy. Macro economics
homework help deal with the development of the
models which explain the relationships between
certain economic parameters like the national income ,
rate of inflation, international trade, the business cycles,
of savings and consumption etc.

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Accuracy: We are a company employed with highly qualified Economics experts to ensure
fast and accurate homework solutions aimed at any difficult homework both Micro
economics and Macro economics.

Macro Economics Homework Sample Questions and Answers:

Question 1. Find out the equilibrium level of national income when autonomous
consumption is $100. MPC is 0.8 and autonomous investment is $50.
Ans.
Y=C+1
And

C = a + by

Y = a + bY + 1

Or

y = 100 + 0.8Y + 50

Or

y -0.8y = 150

Or

0.2Y = 150

1
0.2

= $750
The same equation can also be written as
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150

Y=C+1
Or

Y = a + bY + 1

Or

Y bY = a + 1

Or

Y(1 b) = a +1

Or

y=

1
1

(a + 1)

Now putting the values of a, b and 1

Y=
=

1
0.2

1
10.8

. ) (100 + 50)

150

= 5 150
=$750.

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Question 2. Calculate the GDP in a closed economy with no government where C = 100 +
0.8Y and 1 = 1000.
Ans.

Y=C+1
= 100 + 0.8Y + 1000

or

Y 0.8Y = 100 + 1000

or

0.2Y = 100 + 1000

or

Y=

1100
0.2

Question. 3. Show the equilibrium level of GDP where I is 1000, a is 100 and b is 0.75.
= C+1
= a + bY + 1
= 100 + 0.75 Y + 1000
Or

Y 0.75 = 1000 + 100

Or

0.25Y = 1100
Y=

1100
0.25

= 1100 4
= 44.00

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Question.4. If the consumption function is given by the equation C = 100 + 0.8Y

i.
ii.
iii.

What is the saving function?

At what level of income saving will be zero?
If is equal to 1000, at what level of income saving will be equal to investment?

Ans.
(i)The Saving function when C = 100 + 0.8Y
S=YC
= y ( 100 + 0.8Y)
= y 100 0.8Y
= -100 + 0.2Y
(ii) Level at which saving will be zero when
Y=C
YC=0
Or

Y (100 + 0.8Y) = 0

Or

Y 100 0.8Y = 0

Or

Y 0.8Y = 100
0.2 Y = 100
Y=

100
0.2

= 500
At Y = 500. C = 100 + 0.8(500) = 500
Thus Y C = 500 500 = 0.
(iii) When 1 is 1000, the level at which S = 1 will be
S=1
Putting the value of S from part (i) and given value of 1 = 1000
-100 + 0.2Y = 1000
0.2Y = 1000 + 100
Y=

1100
0.2

= 1100 5
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= 5500
When Y = 5500, saving is
S = -100 + 0.2 (5500)
S =-100 + 1100
= 1000
Which is equal to 1 given value of 1 =1000?

Question.5. Using Saving Investment equality, find out the equilibrium level of national
income when autonomous consumption is $100. MPC is 0.8 and autonomous investment is
$50.
Ans. National Income equilibrium is attained where
S=1
And

as = -a + ( 1-b )Y

Thus by putting [-a + (1 b)Y = 1

-a + (1 b) Y = 1
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Putting the given values

-100 + (1 -0.8)Y = 50
(1 0.8Y) = 50 + 100
0.2Y = 150
Y=

1
0.2

150

Or

Y = 5 150

i.e.,

Y = 750

Saving out of this income would be

S = -a + (1 b)Y
= -100 + (1 0.8) 750
= -100 + 0.2 750
= -100 + 150
=$50
Thus at income level of $750
S = 1 = $50.

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