Macro Economics Homework Help Macro Economics Assignment Help

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About Macro Economics:

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,

rate of savings and consumption etc.

Why Choose Us?

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

∴ Y = 1

0.2 × 150

= $750

The same equation can also be written as

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Y = C + 1

Or Y = a + bY + 1

Or Y –bY = a + 1

Or Y(1 –b) = a +1

Or y = 1

1−𝑏 (a + 1)

Now putting the values of a, b and 1

Y = 1

1−0.8 . ) (100 + 50)

= 1

0.2 × 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 × 5

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. What is the saving function?

ii. At what level of income saving will be zero?

iii. 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 = Y – C

= y – ( 100 + 0.8Y)

= y – 100 – 0.8Y

= -100 + 0.2Y

(ii) Level at which saving will be zero when

Y = C

Y – C = 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.