Assume an goods and services market of an economy is characterized by the following equations: C...
Assume an goods and services market of an economy is characterized by the following equations: C = 0.8 (Y - T) I = 800 -20r Y = C + I + G T = 1000 G = 1000 9. Consider for the moment the Keynesian Cross model. What will happen to the GDP if G increases by 200? What is the multiplier? 10.Keep considering the Keynesian Cross model. What will happen to the GDP if T increases by 200? What...
1. Assume an goods and services market of an economy is characterized by the following equations: C = 0.8 (Y - T) I = 800 -20r Y=C+I+G T = 1000 G = 1000 a) Consider for the moment the Keynesian Cross model. What will happen to the GDP if G increases by 200? What is the multiplier? b) Keep considering the Keynesian Cross model. What will happen to the GDP if T increases by 200? What if both G and...
Assume an goods and services market of an economy is characterized by the following equations: C = 0.8 (Y - T) I = 800 -20r Y=C+I+G T = 1000 G = 1000 1. Derive a formula for the IS curve, showing Y as a function of r. The money market for this economy is described by the equations: (M/P) d = 0.4Y - 40r M = 1200 P=1 a) Derive a formula for the LM curve, showing Y as a...
The money market for this economy is described by the equations: (M/P) = 0.4Y - 40r M = 1200 P=1 12. Derive a formula for the LM curve, showing Y as a function of r. 13. What are the short run values of Y and ? 14. What are the short run values of Y and rif G increases by 200? What is the multiplier? Is the value different from what you calculated for question 9? Explain why it is...
Assume the following equations for the goods and money market of an economy: C = 250 + .8(Y-T) I = 100 - 50r T = G = 100. Ms = 200 Md = 0.2Y – 100r a) Write the equation of the IS curve for this economy. Is this upward or downward sloping? The IS curve is written as Y = _ +/- _r. (6 points) b) If T falls to 50 and everything else remains the same, write the...
My question is d and e
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d. Assume that G increases by 200. By how much will Y increase in short-run equilibrium? What is the government-purchases multiplier (the change in Y divided by the change in G)? e. Assume that G is back at its original level of 1,000, but M (the money supply) increases by 200. By how much will Y increase in short-run equilibrium? What is the multiplier for money supply (the change in...
Assume that the economy is characterized by the following behavioral equations C = 160 + 0.6YD , I = 150 , G = 150 , T = 100 a. Solve for equilibrium GDP (Y) b. Assume full employment output is equal to 900. Is the economy in an inflationary or deflationary gap? c. Show how fiscal policy can be used to get the economy to full employment.
1) Suppose an economy is characterized by the following equations. Y = C+/+G Y = 10,500 G = 800 TA = 1000 S = 1600+ 0.1(Y-TA) + 20001 1 = 600+ 0.20Y - 30001 Where Y is real GDP, G is government purchases of goods and services, S is total national savings, is the nominal rate of interest and I is total investment. There are no transfers in this economy and agents can only consume or save their income. a)...
Suppose that the economy is characterized by the following behavioral equations, in which all macroeconomic aggregate are measured in billions of Namibian dollars, N$: C = 160 + 0.6Yd I = 150 G = 150 T = 100 Solve for Equilibrium GDP (Y) Disposable income ( Yd ) Consumption spending ( C ) Multiplier for government expenditure and interpret it.
Suppose that the economy is characterized by the following behavioral equations: C = 120 + 0.90Y 1 = 160 G = 170 T = 80 Equilibrium GDP (Y)= (Round your response to two decimal places.)