Why must we know the composition of consumption in an economy in order to judge the...
Why must we know the composition of consumption in an economy in order to judge the effects of international trade on real income of the mobile factor?
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Why must we know the composition of consumption in an economy in
order to judge the...
Given the following data for an economy that does not trade: GDP = $2500 million Consumption...
Given the following data for an economy that does not trade: GDP = $2500 million Consumption spending=$500 million Taxes = $300 million Government spending on goods and services = $230 million. We know that private savings is equal to $ A million. Do not include any commas or spaces in your answer.
8. Summarize what we know about birth-order effects in children and explain why som researchers think...
8. Summarize what we know about birth-order effects in children and explain why som researchers think this information has been overdramatized. e
Suppose you have the following information about a fictitious economy. Assume there are no taxes in...
Suppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Income and Consumption Disposable Income Consumption dollars) (dollars) $e $7,000 10,500 14,000 21,880 21,000 31,589 28,000 42,880 1 35,000 52,500 42,000 Instructions: In parts a and c, enter your answers as a whole number. In part b, round your answers to two decimal places. a. What is the equilibrium level of consumption? S b. What is the MPC and MPS for...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, governm...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, government spending and taxes are given by: C = co + ci(Y-T), I = 7, G=G, and T=1 Imports and exports are given by: Q = my and X = rY* where asterisk denotes a foreign variable. a) Solve for equilibrium income in the domestic economy, given Y*. What is the multiplier in this economy? If we were to close the economy (so...
The table below shows the annual consumption expenditure (C) and output (Y) for a developing nation....
The table below shows the annual consumption expenditure (C) and output (Y) for a developing nation. We assume that there are no taxes, so disposable income (DI) is the same as income (Y). Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. What is the value of autonomous consumption for this economy? $ __________ b. What is the equilibrium...
Consider a two-period lived representative agent for an economy, whose preferences for consumption are described by...
Consider a two-period lived representative agent for an economy, whose preferences for consumption are described by the lifetime utility function U = InC1 + InC2 a. Compare the effects of a temporary and a permanent income fall on current account. Suppose that the output of the economy in the two periods are 100 (Y1) and 100 (Y2), and r is 5%. b. Does the economy run a trade balance deficit or surplus in period 1? How about period 2? Explain...
Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function
5. Algebra of the income-expenditure model Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T is for net taxes: C= 20 + 0.75 x (Y - T) Suppose G = $35 billion, 1 = $60 billion, and T = $20 billion. Given the consumption function and the fact that, in...
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) ...
True or False, only answer part c is fine
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) and three factors (mobile labor, fixed capital in C, and fixed land in F). Except otherwise noted, assume that every factor has the same preferences for C and F. Under free trade, the economy exports F. (a) As the home country opens up from autarky to trade, the opportunity cost of F in...
Consider the following data of an economy in a certain year: Item Private consumption expenditures Value($)...
Consider the following data of an economy in a certain year: Item Private consumption expenditures Value($) 1,500 Private investment expenditures 500 Government expenditures on final goods and services 500 Tax revenue 800 Transfer payment 300 Total exports of goods 800 Total exports of services 1,500 Total imports of goods 1,000 Total imports of services 500 What is the Gross Domestic Product (GDP) of this economy?(6 marks) What are the government's budget balance and trade balance respectively (4marks) Suppose the GDP...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
Given the following data for an economy that does not trade: GDP = $2500 million Consumption spending=$500 million Taxes = $300 million Government spending on goods and services = $230 million. We know that private savings is equal to $ A million. Do not include any commas or spaces in your answer.
8. Summarize what we know about birth-order effects in children and explain why som researchers think this information has been overdramatized. e
Suppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Income and Consumption Disposable Income Consumption dollars) (dollars) $e $7,000 10,500 14,000 21,880 21,000 31,589 28,000 42,880 1 35,000 52,500 42,000 Instructions: In parts a and c, enter your answers as a whole number. In part b, round your answers to two decimal places. a. What is the equilibrium level of consumption? S b. What is the MPC and MPS for...
Consider the following open economy. The real exchange rate is fixed and equal to one. Consumption, investment, government spending and taxes are given by: C = co + ci(Y-T), I = 7, G=G, and T=1 Imports and exports are given by: Q = my and X = rY* where asterisk denotes a foreign variable. a) Solve for equilibrium income in the domestic economy, given Y*. What is the multiplier in this economy? If we were to close the economy (so...
Consider a two-period lived representative agent for an economy, whose preferences for consumption are described by the lifetime utility function U = InC1 + InC2 a. Compare the effects of a temporary and a permanent income fall on current account. Suppose that the output of the economy in the two periods are 100 (Y1) and 100 (Y2), and r is 5%. b. Does the economy run a trade balance deficit or surplus in period 1? How about period 2? Explain...
True or False, only answer part c is fine
3. (8 points) Consider a small open economy in the Specific-Factors model with 2 goods (C and F) and three factors (mobile labor, fixed capital in C, and fixed land in F). Except otherwise noted, assume that every factor has the same preferences for C and F. Under free trade, the economy exports F. (a) As the home country opens up from autarky to trade, the opportunity cost of F in...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
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