Q.2. In the mid 1990s, Japan's annual money supply growth rate fell to 1-2 percent from an average annual rate of 10-11 percent in the late 1980s. Explain what effect did this decline have on: (Total 200 to 300 words)
a. Japanese real output?
b. Japanese unemployment?
c. Japanese inflation?
Q.3. Change in Income (∆Y) = $1000 billion
Change in Consumption (∆C) = $900 billion
a) What is the Multiplier?
b) If as a result of decrease in taxes by government, national income goes up immediately by $100 billion what will be the effect after the Multiplier process is complete.
Q.4 Are you in favor of either deficit spending on the part of government or one of a balanced federal budget and budget surpluses? My position is in favor of a balanced federal budget and budget surplus.
Present your argument and discuss the economic situations when your position can be successfully implemented and when it may be doomed to failure. (500 to 750 words)
This question was asked on Apr 29, 2010.
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