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This assignment is based on Q2 of the chapter 13, Work it out. Only difference is...
A small open economy has the following relationships among its variables: C = 50+0.75 (Y-T) I=200-20r...
A small open economy has the following relationships among its variables: C = 50+0.75 (Y-T) I=200-20r NX = 200-50e M/P = Y-40r G = 200 T= 200 M=3.000 P= 3 r* = 4 Q1. Please calculate the following: Equilibrium Exchange Rate Net Export Income Q2. What will be the impact of increase in G by 100 on the exchange rate, income, net exports, and the money supply?
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y)...
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y) Goods Money C = 50+0.8(Y- T) M 3000 I = 200-20r r*=5 NX = 200-508 P = 3 G=T= 150 L(Y, r) Y - 30r 1- find the IS* equation (hint : y as a function of e) 2- find the LM* equation (hint, also relates y and maybe e) 3-draw the IS-LM curve I y 4- find the equilibrium interest rate (trick question!)...
2. A small open economy is described by the following equations: C=50+0.75(Y-T) 1- 200 20 NX-200-50...
2. A small open economy is described by the following equations: C=50+0.75(Y-T) 1- 200 20 NX-200-50 G- 200 T-200 M 3000 P-3 r' = 5 (a) Derive and graph the IS and LM* curves. (b) Calculate the equilibrium exchange rate, level of income, and net exports (c) Assume a floating exchange rate. Calculate what happens to the exchange rate, the level of income, net exports, and the money supply if the government increases spending by 50. Use a graph to...
A small open economy is described by the following set of equations: C = 300 +...
A small open economy is described by the following set of equations: C = 300 + 0.6(Y − T) I = 700 − 80r NX = 200 − 50ε G = T = 500 (Balanced Budget) (M/P)^d = Y − 200r M = 3, 000 P = 3 r ∗ = 5 (a) Derive and graph the IS∗ and LM∗ curves. (b) Calculate the equilibrium exchange rate, income and net exports. (c) Assume a floating exchange rate. Calculate what happens...
4. Assume the following set of equations characterize a small open economy E R o nd...
4. Assume the following set of equations characterize a small open economy E R o nd (1) Y = 10,000 (2) Y=C+I+G + NX (3) C = 0.75(Y-T) D (4) I = 3.000 - 100r (5) NX = 500 - 500€ (6) CF = -100r Elo (7) CF = NXPO ato hone (8) G = 2.5500 TO FOOD (9) T = 1,800. (10)r=r* = 8.5% mbo TO is net exports, CF is net capital outflow, and is the real exchange...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domesti...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domestic and foreign prices are constant and normalized to one ((p p" 1), and the nominal exchange rate equals the real exchange rate. (a) The policy makers have an output target, YT 200, and a net- export target, NXT = 0' Show how these targets can be achieved using government consumption (G) and the exchange rate (E) as policy instruments (b) Now...
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...
P al ance in the short run? Use graphics 4. (3 pts) Suppose a small open...
P al ance in the short run? Use graphics 4. (3 pts) Suppose a small open economy characterized by the following equations: Consumption: C-20+0.8(Y-T), where Y is national income and T are taxes. Investment:I-40-2.15r, where r is the domestic interest rate Government expenditures: G-50 T=50 Money supply: M-590 Demand for money: L-Y-7r Net exports: XN-114-50e oreign interest rate: r-8 Domestic price level constant: P- a) Solve for the equilibrium of income, the exchange rate and the trade balance. b) Suppose...
Please go through all the steps so I can fully understand how to solve. Thank you !
please go through all the steps so I can fully
understand how to solve. Thank you !
(12 points in total) Consider a small open economy with the fixed exchange rate curve of this economy is given as I system. The LM 1-10 000r-200 +(M) and the IS curve is given as Y=100+4G-10,000r + NX, where NX 600-300e. Suppose that P -1,G -100, and the world interest rate () is 0.025, Suppose further that the exchange rate is fixed at...
economics 2. The Economy of Bulgaria can be described as: Y=C+I+G+NX, NX = S-1 Y=1000 G=300...
economics
2. The Economy of Bulgaria can be described as: Y=C+I+G+NX, NX = S-1 Y=1000 G=300 T=300 C=0.95(Y-T) I=500-100r NX=135-100e, where Exports = 135-25e Imports = 75e r=r*=2 a. [7 points] Find the national saving, investment, capital outfow, trade balance, exports, imports and equilibrium exchange rate. b. [7 points) The above scenario shows the economy of Bulgaria before the outbreak of world war II. It is a net borrower. When the war ends it finds itself in the following situation:...
A small open economy has the following relationships among its variables: C = 50+0.75 (Y-T) I=200-20r NX = 200-50e M/P = Y-40r G = 200 T= 200 M=3.000 P= 3 r* = 4 Q1. Please calculate the following: Equilibrium Exchange Rate Net Export Income Q2. What will be the impact of increase in G by 100 on the exchange rate, income, net exports, and the money supply?
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y) Goods Money C = 50+0.8(Y- T) M 3000 I = 200-20r r*=5 NX = 200-508 P = 3 G=T= 150 L(Y, r) Y - 30r 1- find the IS* equation (hint : y as a function of e) 2- find the LM* equation (hint, also relates y and maybe e) 3-draw the IS-LM curve I y 4- find the equilibrium interest rate (trick question!)...
2. A small open economy is described by the following equations: C=50+0.75(Y-T) 1- 200 20 NX-200-50 G- 200 T-200 M 3000 P-3 r' = 5 (a) Derive and graph the IS and LM* curves. (b) Calculate the equilibrium exchange rate, level of income, and net exports (c) Assume a floating exchange rate. Calculate what happens to the exchange rate, the level of income, net exports, and the money supply if the government increases spending by 50. Use a graph to...
4. Assume the following set of equations characterize a small open economy E R o nd (1) Y = 10,000 (2) Y=C+I+G + NX (3) C = 0.75(Y-T) D (4) I = 3.000 - 100r (5) NX = 500 - 500€ (6) CF = -100r Elo (7) CF = NXPO ato hone (8) G = 2.5500 TO FOOD (9) T = 1,800. (10)r=r* = 8.5% mbo TO is net exports, CF is net capital outflow, and is the real exchange...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domestic and foreign prices are constant and normalized to one ((p p" 1), and the nominal exchange rate equals the real exchange rate. (a) The policy makers have an output target, YT 200, and a net- export target, NXT = 0' Show how these targets can be achieved using government consumption (G) and the exchange rate (E) as policy instruments (b) Now...
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...
P al ance in the short run? Use graphics 4. (3 pts) Suppose a small open economy characterized by the following equations: Consumption: C-20+0.8(Y-T), where Y is national income and T are taxes. Investment:I-40-2.15r, where r is the domestic interest rate Government expenditures: G-50 T=50 Money supply: M-590 Demand for money: L-Y-7r Net exports: XN-114-50e oreign interest rate: r-8 Domestic price level constant: P- a) Solve for the equilibrium of income, the exchange rate and the trade balance. b) Suppose...
please go through all the steps so I can fully
understand how to solve. Thank you !
(12 points in total) Consider a small open economy with the fixed exchange rate curve of this economy is given as I system. The LM 1-10 000r-200 +(M) and the IS curve is given as Y=100+4G-10,000r + NX, where NX 600-300e. Suppose that P -1,G -100, and the world interest rate () is 0.025, Suppose further that the exchange rate is fixed at...
economics
2. The Economy of Bulgaria can be described as: Y=C+I+G+NX, NX = S-1 Y=1000 G=300 T=300 C=0.95(Y-T) I=500-100r NX=135-100e, where Exports = 135-25e Imports = 75e r=r*=2 a. [7 points] Find the national saving, investment, capital outfow, trade balance, exports, imports and equilibrium exchange rate. b. [7 points) The above scenario shows the economy of Bulgaria before the outbreak of world war II. It is a net borrower. When the war ends it finds itself in the following situation:...
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