Tag: Economics – Others

What is the FOMC?
Federal Open Market Committee
Federal Oversight of Market Centralization
Federal Reserve of the United States
Federal Market Oversight Council

Part 2
Projecting the future course of the economy is known as
macroeconomic research
macroeconomic forecasting
macroeconomic analysis
data development

Which of the following is not one of the four broad categories of resources? Question 7Select one:
a. labor
b. money
c. capital
d. entrepreneurship
e. land

Objective function:
Z = 3×1 + 4×2
Subject to:
4×1 + 2×2 ≥ 4
6×1 – 5×2 ≤ 7
3×1 + 7×2 ≤ 2
4×2 ≤ 3
Determine the maximum allowable decrease in the coefficient of the x1 in the objective function.

Question 9
The standard of living equals
A. The economic growth.
B. The real GDP divided by the population size.
C. The nominal GDP divided by the population size.

Assuming a $7 per unit tax is imposed, the welfare loss to consumers will be $______. a) 10 b) 12 c) 14 d) 16 e) 19 f) 28 g) 36 h) 48 i) 66 j) 70 k) 84

If the exchange rate for the U.S. dollar–U.K. pound rises from $1.9695 to $2.3634 per U.K. pound, the U.S. dollar falls in value, or depreciates, relative to the U.K. pound.

Assuming a $7 per unit tax is imposed, the new price to sellers will be $______. a) 10 b) 12 c) 14 d) 16 e) 19 f) 28 g) 36 h) 48 i) 66 j) 70 k) 84

Quantity Q    Fixed Cost FC    Variable Cost VC    Total Cost TC = FC + VC    Marginal Cost MC = ∆TC/∆Q
Quantity (Q)
Fixed Cost (FC)
Variable Cost (VC)
Total Cost (TC = FC + VC)
Marginal Cost (MC = ∆TC/∆Q)
0
$1080
1
$1080
12
2
$1080
48
3
$1080
108
4
$1080
192
5
$1080
300
6
$1080
432
7
$1080
588
8
$1080
768
9
$1080
972
10
$1080
1200

In this question
In this question, you must estimate a time series model for consumer prices in South Africausing data in the Excel file ECS4863.xls . You are provided with the following data:
Variable names and descriptions:
SA_CPI = South African headline consumer price index (all urban areas)
EXCH= South African rand per euro
Rand = South African rand per US dollar
OIL = Brent crude oil in South African rand per barrel
M3 = South African money supply in million rands
EU_CPI = Euro area Harmonised consumer price index
US_CPI = United States of America consumer price index
NB, Log transform all the variables. L indicates the logarithmic function is used.
3.1 3.2
Use the data to calculate the annual consumer price inflation and annual South Africaper Euro exchange rate growth. [ N.B Calculate the month-on-same-month of theprevious year (i.e. 12 months) inflation and growth rate]. Plot both series in a scatterplotand comment on the relationship. Perform the Ganger causality test and interpret theresults. Find the correlation coefficient between the series and determine if it isstatistically significant (6)
Test the variables LOIL, LEXCH, and LEU_CPI for stationarity (transform all applicablevariables). Also comment on their respective orders of integration. Provide your resultsin the table below (please add rows where necessary): (9)
Variable Model Lags ADF teststatistic Conclusion
LOIL Trend &InterceptInterceptNone
LEU_CPI Trend&InterceptInterceptNone
LEXCH Trend &InterceptInterceptNone
Statistically significant at the: 10% level (*), 5% level (**), 1% level (***)
You can assume that all other variables are non-stationary, integrated of order I(1).
3.3 Test for possible cointegration between variables
(i) Estimate the following long-run cointegration equation using OLS. Copy and paste your EViews results window in your answer sheet.
(1)_ = 0 + 1 + 20 + 3_ + 43 + . ( 1)
(ii) What are your apriori expectations in terms of sign? (4)
(iii) Interpret the estimated coefficients in equation (1). (4)
(iv) Determine the hypothesis of complete exchange rate and euro area consumer pricepassthrough to the South African consumer price index, that is, 1 = 1 and 3 = 1 (4)
(v) Determine whether LM3 and LEU_CPI are redundant variables in equation (1). (4)
(vi) Determine whether LUS_CPI and LRAND are omitted variables in the model (4)
(vii) Generate the residual series for your long-run equation and determine if cointegrationexists between the variables in the long-run model. (3)
3.4 Construct a short-run (Error Correction) component for your model
_ = 0 + 1_1 + 20 + 301 + 4_ + 531 +61 + 71 + . (2)
(i) Estimate the short-run cointegration equation. Copy and paste your EViews resultswindow in your answer sheet.
(ii) Interpret the coefficients 1 to 7 of the short-run model. (7)
(iii) Perform the required diagnostic and stability tests on the residuals of the Error CorrectionModel given by equation (2). Interpret the test results and make conclusions. (8)
a) Jarque-Bera
b) Breusch Godfrey LM TEST
c) Glejser test
d) Ramsey RESET