Short answer - Admission/Application Essay Example

Question During the last phase of demographic transition, the birth rate is low with possibility of falling below replacement levels. Death rate at this stage of demographic changes is at a low level or changes in consistently in small margins. Population growth is low since there is a decrease in the number of childbearing population. The population however is constant as both death and birth rates are low.Question 2 An expansionary monetary policy will cause an increase in output in the medium run, which in turn reduces the rates of unemployment in the economy.

In an open economy, change in government spending does not cause a significant change in real interest rate. Due to perfect capital mobility, the real interest rate of world markets is equal to that of domestic markets.In a closed model however, the interest rates increase since the government funds the need for spending by borrowing, which reduces the level of public funds. The public need for borrowing increases increasing the rate of borrowing.Question 3A fall in prices will lead to increased demand for products; this reduces the disposable income, which in turn increases the need for debt.Question1.4An inflation bias is the outcome of discretionary government that exists under perfect foresight to increase the level of inflation beyond optimal level.

The discretionary monetary policy performed by the central bank causes an inflation bias. The inflation bias affects the credibility of the target inflation rate as it affects the Question 1.5The central bank can manipulate both the monetary policy and the exchange rates to create optimum output and inflation rate by fixing the exchange rates at a level that positively assist the functions of the monetary policy.Question 1.6If the government runs at large deficits, it increases the level of public borrowing by charging more taxes, which reduces the money in supply.

Question 1.7The ratio of debt to nominal GDP decreases with an increase in the growth rate of output because the debt values are lower as compared with the increased GDP that results from the increase in output (Carlin and Soskice).Question 2.1 A decline in death rate will lead to over-population and social problems.Equilibrium population is exceeded this causes a decrease in per capita output.Question 2.2 where S is the savings rate. An increase in savings rate increases raises average living standards, the per capita consumption is shifted upwards i.e. increases.

Steady state consumption is altered as equilibrium shifts upwards. The positive form of the golden rule relates to this, as savings rate are directly proportional to livings standards. Per capita output=where N represents labor employment.Question 2.3Effects of an increase in technical progress are similar to those of increase in saving rate. The equilibrium equation where A represents technical change shifts upwards increasing effective output per capita. The growth rate of capital per capita decreases initially.

Question 2.4In the IS-LM, increase in productivity shifts up the production function this means higher levels of employment, output and real wage. The labor supply line shifts to the right, which creates a new potential for supply of goods.Work citedCarlin, Wendy, and David W Soskice. Macroeconomics. 1st edition. Oxford: Oxford University Press, 2006. Print.