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In the instructions there will be questions that touch on different points. This does not have to be a paper just answer exactly what the question is asking.

Date Posted: 20/05/2020
Category: Economics
Due Date: 27/05/2020
Instruction
1. Explain what an intermediate good is and why it can not be counted towards the GDP. Give an example of one vs the final good it eventually ends up in. 2. The United States has numbers for each macroeconomic goal. What are the numbers currently? 3. The loanable funds market plays an important role in the balancing of leakages and injections from the circular flow. Explain what this market is and how it clears 4. In the mini lecture I speak to the law of diminishing returns and how this is reflected on the production function graph. Think of a a factory three sewing machines. If one worker is added to the third vacant sewing machine, output will go up by quite a bit (exponentially). However, once we add workers after all sewing machines are utiilized, output will still go up. The fourth worker will cut the material, clean up, fill in for breaks. But output, while still going up, will increase in smaller and smaller increments. Can you give another scenario of diminishing returns? Remember, capital and technology must remain constant. The only thing that is changing is labor. 5.Discuss how the Multiplier leads to closing the gap between equilibrium and full employment. Challenge question: Discuss why the tax multiplier is different. When would this multiplier be used? 6. Discuss how the Reserve Requirement Ratio (RRR) is essentially the same concept as the MPS. 7. In the vault are 21,000 dollars in reeves The RRR = 7% Outstanding checkable deposits = 280,000 dollars a. What is the maximum allowed in checkable deposits? b. What are the required reserves? c. By how much can this bank expand the money supply in checkable deposits? d. What are the excess reserves? 8. Discuss the drawbacks and weaknesses of monetary policy. Do the same for fiscal policy?
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