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4. Assume that initially the IS curve is given by ısı : Y-12-1.5T-30i + 2G and...
s. (2 PTS) Assume the following closed economy model: C-350+0,7 (Y 1 300 + 0,04%-30i G=330...
s. (2 PTS) Assume the following closed economy model: C-350+0,7 (Y 1 300 + 0,04%-30i G=330 ; T . 400 + 0.1Y (MP)"-1,4%. 60i M-4.610;P-2 Where C consumption, I- investment, Y- income, i-interest rate (in percentage ponts, 6, 7, 8 . .), О . government spending; (MP), demand for real balances, Me money supply a) Compute the equilbrium levels for income, the interest rate, consumption investment and the budget balance b) Suppose the goal of the govermnment is to increase...
1. In an economy which has a national income identity as the following; Y= C+ I + G + NX where C ...
I need help with this.
1. In an economy which has a national income identity as the following; Y= C+ I + G + NX where C = 400 + 0.6 Yd,; 1 = 1000-4600 r, G-1240 T-200 +0.25 Y; NX-400-0.05Y-8 00 e ( ofcourse, Yd=Y-T) Where e- foreign currency/ domestic currency, and initially set at e 1.25+2.5R The money demand function is Md- 0.75 Y-7500 r, and money supply is set by the Central Bank at 450. All calculation...
Please give a detailed solution, thank you! 5. Given C 5000.75 (Y T) I = 2,000 -50r G 1,000 T 1,000 - 10Y - 2000r Ms 50,...
Please give a detailed
solution, thank you!
5. Given C 5000.75 (Y T) I = 2,000 -50r G 1,000 T 1,000 - 10Y - 2000r Ms 50,000 P a. Derive the IS curve and the LM curve, and find the equilibrium interest rate and output b. Government spending increases by 500. If the central bank does not react at all to this change, what is the new equilibrium output and interest rate? If instead the central bank wants to keep...
Macroeconomics: Intermediate Theory/ Calc-based 4. Consider an economy that abides by a Mundell Fleming model. Capital...
Macroeconomics: Intermediate Theory/ Calc-based
4. Consider an economy that abides by a Mundell Fleming model. Capital is imperfectly mobile, prices are perfectly sticky in the short run, and the exchange rate is fixed. Assume that the current exchange rate is at its tar get and the current domestic interest rate is equal to the foreign interest rate. Suppose the local central bank wants to stimulate economic activity by increasing the supply of money through conventional open market oper- ations. Which...
NEED HELP WITH QUESTIONS E TO I Consider a hypothetical economy characterized by the following equations(all...
NEED HELP WITH QUESTIONS E TO I
Consider a hypothetical economy characterized by the following
equations(all variables as defined in class).
Consumption: C = 700 + 0.95Y Investment: I=500− 30i
Government spending: G=50
Money demand: L(i,Y )=0.75Y − 30i Money supply: Ms/P=400
(a) What is the equation of the IS curve?
(b) What is the equation for the LM curve?
(c) Solve for the equilibrium values of income (Y) and interest
rates (i).
(d) Assume that the government engages in...
a. On two separate diagrams, draw the IS-LM graphs, one with a steep IS curve and...
a. On two separate diagrams, draw the IS-LM graphs, one with a steep IS curve and the other with a flatter one. You might recall from our discussion of the extended IS-LM model that the slope of the IS curve depends on the sensitivity of I to interest rates. The central bank uses expansionary monetary policy to increase output. In which case is the policy more effective? Why (give an economic explanation, not a mathematical argument)? b. Okun's law estimated...
Imagine that in a given economy the LM curve takes the form 20r +e, where ε denotes a shock to de...
Imagine that in a given economy the LM curve takes the form 20r +e, where ε denotes a shock to demand for money, which is known to the policy makers. How, do you think, a central bank, interested in ensuring that 100Y a) It should keep both money supply and the interest rate at constant levels all the time, b) The policy choice is irrelevant as monetary policy is neutral in the long run, c) It should keep the interest...
91[30 points) Suppose the US economy is characterized by the following behavioral equations C6 CY Y...
91[30 points) Suppose the US economy is characterized by the following behavioral equations C6 CY Y -Y-T Investment expenditures and Government spending are exogenously en GDP in 2009 was roughly $16,000 billion. As you know GDP fell by approximately 6 percentate points in 2009 If the propensity to consume were 0.8. by how much would government spending have to have Increased to prevent a decrease in output If the propensity to consume were 0.8 by how much would prevent any...
Stacked An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I =...
Stacked An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5 M/P = Y-25r G = 200 T = 200 M = 3000 P = 3 a. Derive and graph the IS and LM curves. Use the accompanying diagram to graph the IS and LM curves by placing the endpoints at the correct location, then place point A at the equilibrium interest rate and level of income. IS: Y= LM: Y= IS: Y= LM:...
B,c,d,e please solve Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases...
B,c,d,e please solve
Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases G-$400 lump-sum taxes = $70, transfers Tr-$20, exports Er $150 autonomous imports im = $30, marginal propensity to consume mpc = 0.8, proportional income tax rate 1-20%, marginal propensity to invest mpi-0.1, and marginal propensity to imports mpm-0.4 (a) For this economy calculate (i) the amount of autonomous spending: (ii) the value of the spending multiplier; (iii) the equilibrium level of output; (iv) the...
s. (2 PTS) Assume the following closed economy model: C-350+0,7 (Y 1 300 + 0,04%-30i G=330 ; T . 400 + 0.1Y (MP)"-1,4%. 60i M-4.610;P-2 Where C consumption, I- investment, Y- income, i-interest rate (in percentage ponts, 6, 7, 8 . .), О . government spending; (MP), demand for real balances, Me money supply a) Compute the equilbrium levels for income, the interest rate, consumption investment and the budget balance b) Suppose the goal of the govermnment is to increase...
I need help with this.
1. In an economy which has a national income identity as the following; Y= C+ I + G + NX where C = 400 + 0.6 Yd,; 1 = 1000-4600 r, G-1240 T-200 +0.25 Y; NX-400-0.05Y-8 00 e ( ofcourse, Yd=Y-T) Where e- foreign currency/ domestic currency, and initially set at e 1.25+2.5R The money demand function is Md- 0.75 Y-7500 r, and money supply is set by the Central Bank at 450. All calculation...
Please give a detailed
solution, thank you!
5. Given C 5000.75 (Y T) I = 2,000 -50r G 1,000 T 1,000 - 10Y - 2000r Ms 50,000 P a. Derive the IS curve and the LM curve, and find the equilibrium interest rate and output b. Government spending increases by 500. If the central bank does not react at all to this change, what is the new equilibrium output and interest rate? If instead the central bank wants to keep...
Macroeconomics: Intermediate Theory/ Calc-based
4. Consider an economy that abides by a Mundell Fleming model. Capital is imperfectly mobile, prices are perfectly sticky in the short run, and the exchange rate is fixed. Assume that the current exchange rate is at its tar get and the current domestic interest rate is equal to the foreign interest rate. Suppose the local central bank wants to stimulate economic activity by increasing the supply of money through conventional open market oper- ations. Which...
NEED HELP WITH QUESTIONS E TO I
Consider a hypothetical economy characterized by the following
equations(all variables as defined in class).
Consumption: C = 700 + 0.95Y Investment: I=500− 30i
Government spending: G=50
Money demand: L(i,Y )=0.75Y − 30i Money supply: Ms/P=400
(a) What is the equation of the IS curve?
(b) What is the equation for the LM curve?
(c) Solve for the equilibrium values of income (Y) and interest
rates (i).
(d) Assume that the government engages in...
a. On two separate diagrams, draw the IS-LM graphs, one with a steep IS curve and the other with a flatter one. You might recall from our discussion of the extended IS-LM model that the slope of the IS curve depends on the sensitivity of I to interest rates. The central bank uses expansionary monetary policy to increase output. In which case is the policy more effective? Why (give an economic explanation, not a mathematical argument)? b. Okun's law estimated...
Imagine that in a given economy the LM curve takes the form 20r +e, where ε denotes a shock to demand for money, which is known to the policy makers. How, do you think, a central bank, interested in ensuring that 100Y a) It should keep both money supply and the interest rate at constant levels all the time, b) The policy choice is irrelevant as monetary policy is neutral in the long run, c) It should keep the interest...
91[30 points) Suppose the US economy is characterized by the following behavioral equations C6 CY Y -Y-T Investment expenditures and Government spending are exogenously en GDP in 2009 was roughly $16,000 billion. As you know GDP fell by approximately 6 percentate points in 2009 If the propensity to consume were 0.8. by how much would government spending have to have Increased to prevent a decrease in output If the propensity to consume were 0.8 by how much would prevent any...
Stacked An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5 M/P = Y-25r G = 200 T = 200 M = 3000 P = 3 a. Derive and graph the IS and LM curves. Use the accompanying diagram to graph the IS and LM curves by placing the endpoints at the correct location, then place point A at the equilibrium interest rate and level of income. IS: Y= LM: Y= IS: Y= LM:...
B,c,d,e please solve
Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases G-$400 lump-sum taxes = $70, transfers Tr-$20, exports Er $150 autonomous imports im = $30, marginal propensity to consume mpc = 0.8, proportional income tax rate 1-20%, marginal propensity to invest mpi-0.1, and marginal propensity to imports mpm-0.4 (a) For this economy calculate (i) the amount of autonomous spending: (ii) the value of the spending multiplier; (iii) the equilibrium level of output; (iv) the...
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