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Question Three: 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 +...
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...
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 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...
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 - 5r 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 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....
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...
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...
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 3 Consider a small open economy. Assume that the following variables are exogenously set: G=1,000;...
Question 3 Consider a small open economy. Assume that the following variables are exogenously set: G=1,000; T=800; L=2,500; K=3,000; A=1 and a=0.3. In addition, the consumption function is given by: C=50+0.65(Y-T). Investment is given by: 1=1,000-20r Finally, the world real interest rate is 6% and net exports are given by: NX=500-100€ (e=real exchange rate) Using the long-run model developed in chapter 5, compute the equilibrium values of the following variables. National saving equals Investment equals Trade balance equals The real...
5. Consider the economy of Hicksonia, which can be described by the following equations: (1) C=300+...
5. Consider the economy of Hicksonia, which can be described by the following equations: (1) C=300+ 0.80 (Y-T) (2) I= 150-20r (3) L=0.90Y - 90r In addition, the following variables are given: T = 100, G = 150, NX --80, M-1800, and P-1. a. Derive the numerical equation for the IS curve. b. Derive the numerical equation for the LM curve. c. Calculate the equilibrium levels of output Y and the interest rater. Verify your results by showing that the...
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...
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...
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 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...
Question Two: Assume the following equations summarize the structure of an economy. с =C+0.7(Y - T) Са = 2,000 - 5r T 150+ 0.15Y (M/P) = 0.3Y - 10r M/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....
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...
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 3 Consider a small open economy. Assume that the following variables are exogenously set: G=1,000; T=800; L=2,500; K=3,000; A=1 and a=0.3. In addition, the consumption function is given by: C=50+0.65(Y-T). Investment is given by: 1=1,000-20r Finally, the world real interest rate is 6% and net exports are given by: NX=500-100€ (e=real exchange rate) Using the long-run model developed in chapter 5, compute the equilibrium values of the following variables. National saving equals Investment equals Trade balance equals The real...
5. Consider the economy of Hicksonia, which can be described by the following equations: (1) C=300+ 0.80 (Y-T) (2) I= 150-20r (3) L=0.90Y - 90r In addition, the following variables are given: T = 100, G = 150, NX --80, M-1800, and P-1. a. Derive the numerical equation for the IS curve. b. Derive the numerical equation for the LM curve. c. Calculate the equilibrium levels of output Y and the interest rater. Verify your results by showing that the...
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