in the sample macro model, desires investment is assumed to me atutonomous with respect to national...
Homework Answers
A decrease in form optimism about economy and an expectation of a downturn in the future economic activity will cause a shift of the investment function. A decrease in interest will cause a movement along the investment curve. Hence, option (C) is correct.
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in the sample macro model, desires investment is assumed to me
atutonomous with respect to national...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
Intermediate Macro Question Consider a small open economy in the classical model, assume the production function...
Intermediate Macro Question Consider a small open economy in the classical model, assume the production function is y=1000(square root KL) K=20 L=5 Government spending is 1000 and taxes are 1000. the consumption function is c=1500+0.5(Y-T) investment equation is 1000-50r=I net export function is 5000-5000e world interest rate is r=r*=10 Solve 1 income 2 consumption 3 National Savings 4. Investments 5. Trade balance 6 Real exchange rate 7. The real world interest rate rises to 20 solve for the new values...
As prices rise, a fixed money supply will be able to buy fewer goods and services....
As prices rise, a fixed money supply will be able to buy fewer goods and services. This real balance effect is due to a(n) reduction in the interest rate. Increase in aggregate demand Decline in the purchasing power of the fixed quantity of money. Increase in income. The international substitution effect exists because a Higher price level will reduce interest rates and stimulate foreign investment. Lower price level will make domestically produced goods less expensive relative to foreign goods. Higher...
Please answer these macro multiple choices Which of the following is a defining characteristic of the...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
1. Inflationary pressure in the AS-AD model can be shown as a a) supply shock that...
1. Inflationary pressure in the AS-AD model can be shown as
a
a) supply shock that shifts the AD to the left.
b) rise in input prices affecting most firms across the economy
shifting AS curve to the right.
c) rise in input prices affecting most firms across the economy
shifting AS curve to the left.
2. Which of the following would cause a positive demand shock
(shift to the right) in aggregate demand?
a) decreased availability of capital stock....
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b...
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=GO T=f+jY <b<1 (<r<1 a>0 in mln dollars; k>O in mln dollars; Go >O in mln dollars fo in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y*) in reduced form (3 points); 3) If we know the parameters of the system, find the...
1. Points = 18. Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C...
1. Points = 18. Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 (<r<1 a> 0 in mln dollars; k>0 in mln dollars; Go >O in mln dollars p> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3) If we know the...
please, i need answeer for all 4 questions Consider National-Income Model: National Income: Consumption: Investment: Government...
please, i need answeer for all 4 questions
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 0<x<1 a> 0 in mln dollars; k>0 in mln dollars; Go > in mln dollars f> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3)...
ce Level Long Run Aegregate Supply 110 LRAS 1 105 100 95 13 5 14.5 15.5...
ce Level Long Run Aegregate Supply 110 LRAS 1 105 100 95 13 5 14.5 15.5 165 Real GDP or Output amlbon of 2009 dollars Refer to the economic model pictured above: Decrease in price levels from 105 to 100 will cause Real GDP to O remain constant in the long run increase to 16.5 trillion in the long run O decrease to 13.5 trillion in the long run O increase to 15.5 trillion in the long run Price Level...
USU.US CUJL 1.ULTIUZULUV.CUIT 1. Points = 18 Consider National-Income Model: National Income: Consumption: Investment: Government Sector:...
USU.US CUJL 1.ULTIUZULUV.CUIT 1. Points = 18 Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 0<r<1 a> 0 in mln dollars; k>0 in mln dollars; Go >O in mln dollars f> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3) If...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
1. Inflationary pressure in the AS-AD model can be shown as
a
a) supply shock that shifts the AD to the left.
b) rise in input prices affecting most firms across the economy
shifting AS curve to the right.
c) rise in input prices affecting most firms across the economy
shifting AS curve to the left.
2. Which of the following would cause a positive demand shock
(shift to the right) in aggregate demand?
a) decreased availability of capital stock....
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=GO T=f+jY <b<1 (<r<1 a>0 in mln dollars; k>O in mln dollars; Go >O in mln dollars fo in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y*) in reduced form (3 points); 3) If we know the parameters of the system, find the...
1. Points = 18. Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 (<r<1 a> 0 in mln dollars; k>0 in mln dollars; Go >O in mln dollars p> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3) If we know the...
please, i need answeer for all 4 questions
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 0<x<1 a> 0 in mln dollars; k>0 in mln dollars; Go > in mln dollars f> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3)...
ce Level Long Run Aegregate Supply 110 LRAS 1 105 100 95 13 5 14.5 15.5 165 Real GDP or Output amlbon of 2009 dollars Refer to the economic model pictured above: Decrease in price levels from 105 to 100 will cause Real GDP to O remain constant in the long run increase to 16.5 trillion in the long run O decrease to 13.5 trillion in the long run O increase to 15.5 trillion in the long run Price Level...
USU.US CUJL 1.ULTIUZULUV.CUIT 1. Points = 18 Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 0<r<1 a> 0 in mln dollars; k>0 in mln dollars; Go >O in mln dollars f> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3) If...
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