3. In the following market model, P is price in time t, S and D are supply and demand functions. Assume that supply in year t depends on price in year t - 1, S (Pt-1)= aPt-1 and that demand function is an usual one, D (P₂) = 1-bPt. Given: First-Order Difference Equation of (p): P₁=-aPt-1+1 (b) Find the stationary equilibrium price.

P1. Apply the approximation rules for growth rates in the following situations: a) Labor income equals the average wage times the number of employed workers (YWN). The average wage grows at 3%. Employment grows at 1%. Find the growth rate of labor income. b) Real GDP (1) equals nominal GDP () divided by the aggregate price level (Y Nominal GDP is growing at 6%. The inflation rate is 2%. Find the growth rate of real GDP. P c) The demand function for a good is Qo-6p Find the percentage change in the quantity demanded (Q) when the price of the good (P) rises by 4%. d) Suppose you have a credit card balance (D) that, if unpaid, grows at a nominal interest rate of 7% every year. Prices (P) grow at a rate of inflation of 1% per year. Calculate the annual percentage change in the real value of your credit card debt (DD/P). e) Suppose nominal GDP (Y) grows at 4%, prices (P) grow at 3% and the population (POP) grows at 2%. Find the growth rate of real GDP per person (y = Px POP

7. Consider a neoclassical growth economy described by the following.•Yt = K0.3t ·L0.7t (aggregate production function)•s = 0.35 (saving rate)•δ = 0.10 (depreciation rate)•n = 0.01 (population growth rate)•L1 = 120 (initial population)•K1 = 160 (initial capital stock)•g = 0 (technological growth rate)Compute K, Y , k, y, and c for the first three periods. Please report numerical answers to two decimal points.

5. Consider the following changes in the sticky-wage model. a. Suppose labor contracts are fully indexed for inflation so that as inflation changes. That is, the nominal wage is to be adjusted to fully compensate for changes in the consumer price index. How does full indexation alter the AS curve in this model? b. Suppose that now indexation is only partial. That is, for every increase in the CPI, the nominal wage rises, but by a smaller percentage. How does partial indexation alter the AS curve in this model?

Suppose that M = 2000 and that k = 2. What is the price level P at which the economy is in long-run- equilibrium? Plot such an equilibrium on a diagram with P on the vertical axis and Y on the horizontal axis, by distinguishing between the short-run and the long-run equilibrium.

Changes in macroeconomic indicators can often be of relevance to business and influence decision-making concerning a range of issues related to things like profit forecasts, expected sales growth, expansion plans, etc.   Assume you are employed as a business analyst with a large Singaporean based multinational corporation that manufactures electronic products. Identify and discuss how a major export market where electronic goods are sold experiences accelerating inflation.

Assume that an economy's production function is Y=1,000L1/2,so that when the marginal product of capital is equated to the real wage the labor demand curve is L = 250,000(P/W)2. The labor supply curve is L = 31,250(W/P). The real wage that solves these equations is W/P = 2. Assume that the expected price level is 10, so that a nominal wage contract setting the wage at 20 is agreed to, making the expected real wage 2. If the price level turns out to be 10, 62,500 workers will be hired and output will be 250,000. If the actual price level turns out to be 20, what will the actual real wage be?b. According to the labor demand curve, how much labor will be demanded if the actual real wage is at the level given in part a?c. According to the production function, if the amount of labor given in part b is actually hired, how much will production be?

The U.S. economy is initially in short-run macro-equilibrium.  Assume that, in the face of Covid-19,  firms’ costs increase as they must comply with safety regulations to keep their employees safe at work.  As a result, we observe the following in our economy:   Question 31 options:   a)  Both the price level and real GDP decrease   b)  The price level increases and real GDP falls   c)  The price level falls and real GDP increases   d)  Both the price level and real GDP increase.

Describe the key features of the graph in 250 WORDS OR MORE. You need to start with anoverview to what the graph is about and then you need to cover all key information you can understand from the graph and finish your analysis with what you can conclude from the graph. In particular, the following questions should be addressed: what does each curve represent? Where can such a negative shock in the demand come from? What are the two points displayed on the graph? Are firms and consumers better off after the shock?Don't forget to start with a plan. DO AN ANALYSIS AND CONCLUDE

Variation in the price of non-agricultural commodities is determined over time by demand-supplydynamics. The last two decades have seen a significant increase in international trade and businessvolume due to globalization and liberalization sweeping across the world. This increase has led torapid and unpredictable variations in financial assets prices, interest rates, and exchange rates, andsubsequently, to exposing Multi-National Corporations to financial risk. As a result, financialmarkets have experienced rapid variations in interest and exchange rates and stock market prices,thus exposing the corporate world to a state of growing financial risk. We can hedge the risk ofprice variations in stocks, bonds, commodities, currencies, interest rates, market indices, etc.  a) How is Jamaica's economic well-being enhanced through free international trade in goods and services, especially since the COVID-10 pandemic? Discuss two relevant examples specific to Jamaica.  b) Discuss two (2)…