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Question Two: Assume the following equations summarize the structure of an economy. с =C+0.7(Y - T)...
Question Two: Assume the following equations summarize the structure of an economy. С C+0.7(Y-T) са 2,000...
Question Two: Assume the following equations summarize the structure of an economy. С C+0.7(Y-T) са 2,000 - 5r T 150 +0.157 (M/P)+ - 0.3Y - 10r MS/P 3,000 2,000 -10r G 4,000 - 2y NX - 1,500 -0.1 Y-5r A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it wants to avoid the crowding out of expansionary fiscal policy. Make sure...
ca Question Two: Assume the following equations summarize the structure of an economy. с = C2...
ca Question Two: Assume the following equations summarize the structure of an economy. с = C2 +0.7(Y-T) = 2,000 - 50 T = 150+ 0.15Y (M/P) = 0.3Y - 10r M/P = 3,000 = 2,000 -10r G 4,000 - 2y NX = 1,500 -0.1 Y-5r i A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it wants to avoid the crowding...
Question Two: Assume the following equations summarize the structure of an economy. С = Ca +...
Question Two: Assume the following equations summarize the structure of an economy. С = Ca + 0.7(Y - T) Са = 2,000 - 50 T = 150 + 0.15Y (M/P)! = 0.34 - 10r MS/P 3,000 2,000 -10r G = 4,000 - .2y NX = 1,500 - 0.1 Y-5r i = A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it...
Assume the following equations summarize the structure of an economy. C =Ca +0.7(Y-T) Ca = 2,000...
Assume the following equations summarize the structure of an economy. C =Ca +0.7(Y-T) Ca = 2,000 - 5r T = 150 + 0.15Y (M/P)d = 0.3Y - 10r MS/P = 3,000 i = 2,000 -10r G = 4,000- .2y NX = 1,500 - 0.1Y- 5r A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it wants to avoid the crowding out...
Question 2 Explain how the effectiveness of contractionary monetary policy (dM Fiscal policy (dg <0) depends...
Question 2
Explain how the effectiveness of contractionary monetary policy (dM Fiscal policy (dg <0) depends on the magnitude of the response of NX to in r or dNX/dr. Make sure to provide your answer with the relevant mathematical equations, and economic interpretation. points) Question Two: Assume the following equations summarize the structure of an economy. с =C, +0.7(Y - T) са = 2,000 - 50 т * 150 + 0.15Y (M/P) 0.3Y - 10r M/P 3,000 2,000 -10r G...
Question Three: Assume the following equations summarize the structure of an economy. с = Ca +...
Question Three: Assume the following equations summarize the structure of an economy. с = Ca + 0.6(Y - T) Са = 1,000 - 20r т = 100+ 0.17 (M/P)' = 0.3Y - 100 MS/P = 2,000 2,500 + ly G 5,000 - ly NX = 1,000 - 0.17 Calculate the equilibrium real output (Y) and (r).
Assume that the following equations summarize the structure of an economy. Answer the following questions: ...
Assume that the following equations summarize the structure of
an economy.
Answer the following questions:
(a) What is the equation of the IS curve?
(b) What is the equation of the LM curve?
(c) What is the equilibrium real output?
(d) What is the equilibrium interest rate?
(e) What is the level of saving at equilibrium?
What is the level of planned investment at equilibrium?
Determine whether leakages equal injections at
equilibrium.
Assume that r...
For an economy described by the following equations: C = 1,800 + 0.6 (Y – T)...
For an economy described by the following equations: C = 1,800 + 0.6 (Y – T) I p = 900 G = 1,500 NX = 100 T = 1,500 Y* = 9,000 Assume that the multiplier for this economy is 2.5. Find the effect on short-run equilibrium output of: a. An increase in government purchases from 1,500 to 1,600. Instructions: Enter your responses as whole numbers. Short-run equilibrium output will (Click to select) increase decrease to . b. A decrease in tax collections from 1,500...
The following equations describe an economy. Y=C+I+G C=50+0.75*(Y-T) I=150-10r (M/P)d=Y-50r G=250 T=200 M=3,000 P=4 Identify each...
The following equations describe an economy. Y=C+I+G C=50+0.75*(Y-T) I=150-10r (M/P)d=Y-50r G=250 T=200 M=3,000 P=4 Identify each of the variables, and briefly explain their meaning. From the above list, use the relevant set of equations to derive the IS curve. Graph the IS curve on an appropriately labeled graph. From the above list, sue the relevant set of equations to derive the LM curve. Graph the LM curve on the same graph you used in part b). What are the equilibrium...
An economy is described by the following equations: C= 1800 +0.6(Y-T) consumption function Ip = 900...
An economy is described by the following equations: C= 1800 +0.6(Y-T) consumption function Ip = 900 planned investment G=1500 government spending NX = 100 net exports T= 1500 taxes Y* = 9000 potential output What is the output gap for this economy? If the natural rate of unemployment is 4 percent, what is the actual unemployment rate for this economy (use Okun's law)?
Question Two: Assume the following equations summarize the structure of an economy. С C+0.7(Y-T) са 2,000 - 5r T 150 +0.157 (M/P)+ - 0.3Y - 10r MS/P 3,000 2,000 -10r G 4,000 - 2y NX - 1,500 -0.1 Y-5r A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it wants to avoid the crowding out of expansionary fiscal policy. Make sure...
ca Question Two: Assume the following equations summarize the structure of an economy. с = C2 +0.7(Y-T) = 2,000 - 50 T = 150+ 0.15Y (M/P) = 0.3Y - 10r M/P = 3,000 = 2,000 -10r G 4,000 - 2y NX = 1,500 -0.1 Y-5r i A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it wants to avoid the crowding...
Question Two: Assume the following equations summarize the structure of an economy. С = Ca + 0.7(Y - T) Са = 2,000 - 50 T = 150 + 0.15Y (M/P)! = 0.34 - 10r MS/P 3,000 2,000 -10r G = 4,000 - .2y NX = 1,500 - 0.1 Y-5r i = A. Calculate the equilibrium real output (Y) and (r). B. If government spending increases by 100, compute by how much the fed must increase the money supply if it...
Question 2
Explain how the effectiveness of contractionary monetary policy (dM Fiscal policy (dg <0) depends on the magnitude of the response of NX to in r or dNX/dr. Make sure to provide your answer with the relevant mathematical equations, and economic interpretation. points) Question Two: Assume the following equations summarize the structure of an economy. с =C, +0.7(Y - T) са = 2,000 - 50 т * 150 + 0.15Y (M/P) 0.3Y - 10r M/P 3,000 2,000 -10r G...
Question Three: Assume the following equations summarize the structure of an economy. с = Ca + 0.6(Y - T) Са = 1,000 - 20r т = 100+ 0.17 (M/P)' = 0.3Y - 100 MS/P = 2,000 2,500 + ly G 5,000 - ly NX = 1,000 - 0.17 Calculate the equilibrium real output (Y) and (r).
Assume that the following equations summarize the structure of
an economy.
Answer the following questions:
(a) What is the equation of the IS curve?
(b) What is the equation of the LM curve?
(c) What is the equilibrium real output?
(d) What is the equilibrium interest rate?
(e) What is the level of saving at equilibrium?
What is the level of planned investment at equilibrium?
Determine whether leakages equal injections at
equilibrium.
Assume that r...
An economy is described by the following equations: C= 1800 +0.6(Y-T) consumption function Ip = 900 planned investment G=1500 government spending NX = 100 net exports T= 1500 taxes Y* = 9000 potential output What is the output gap for this economy? If the natural rate of unemployment is 4 percent, what is the actual unemployment rate for this economy (use Okun's law)?
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