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Part II. Short answer Question 1: Consider the following GDP equation, consumption function, exports, imports and...
Problem 1: Consider the following GDP equation, consumption function, exports function. imports function and investment function...
Problem 1: Consider the following GDP equation, consumption function, exports function. imports function and investment function and use them to answer the following questions Y; = C4 + 1++G+ + EX, – IM le = ā; – Õ(R4 – 7); 7 > 0 = āc + TÝ; 0<ī<1 G=ā, EX = 0 IM = 0 (a) Derive the IS curve as a relation between short run output Yt and the real interest rate gap Rt – Ť. (b) Find the...
ANSWER ONLY QUESTION 2 1. A country exports the same amount as it imports, hence net...
ANSWER ONLY QUESTION 2 1. A country exports the same amount as it imports, hence net exports =0. The following equations describe its national accounts: National Accounts Expenditure Identity: Y = C + G + 1 Household Consumption: C = 180 +0.61Y -T) Government Expenditure: G=600 Private Sector Investment: I=1000-200R, R=2 Tax Revenue: T=0.17 (a) Find Y, T, C (b) Compute C/Y, G/Y and I/Y (percentage) (c) Find the government deficit: D= G-T 2. Re-solve for Y in exercise 1.,...
Economics
Consider the following GDP equation, consumption function, exports function. imports function and investment function and use them to answer the following questions:Yt = Ct + It +Gt + EXt - IMt[It]/[Y[bar]t] = a[bar]i - b[bar]*(Rt - r[bar]); b[bar] > 0 C = a[bar]c* Y[bar]t G = a[bar]g * Y[bar]t EX = a[bar]ex * Y[bar]t ...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
please answer part h to part k Question 2 In the Keynesian cross, assume that the consumption function is given by C = 1...
please answer part h to part
k
Question 2 In the Keynesian cross, assume that the consumption function is given by C = 150 +0.7 (Y-T) Planned investment is: I = 100 - 10 *r Government purchases and taxes are both 50. a. Graph consumption as function of income. b.Graph investment as function of the real interest rate. c.Suppose that the real interest rate is 5. Write the equation of the planned expenditure. d.Suppose that the real interest rate is...
Please answer a, b, c, d 1. For the following question, assume that the consumption function...
Please answer a, b, c, d
1. For the following question, assume that the consumption function is: C = 200+ 0.75(Y – T) The investment function is: I = 200 – 2.51 Government spending is fixed at G = 100 and the government has a balanced budget. The liquidity function is: L(Y,r) = Y – 10r Nominal money supply is 1,000 and the price level is equal to 2. a) Find the planned expenditure function and plot it on the...
Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function
5. Algebra of the income-expenditure model Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T is for net taxes: C= 20 + 0.75 x (Y - T) Suppose G = $35 billion, 1 = $60 billion, and T = $20 billion. Given the consumption function and the fact that, in...
Use the following information to answer questions 3 - 10 Y- C+IG+X-IM where: C= 200 +...
Use the following information to answer questions 3 - 10 Y- C+IG+X-IM where: C= 200 + 0.75 DI I = 100 G 100 X = 100 IM 200 Also assume that T Tr-0 full-employment real GDP (YF) $2000 Question 6 (10 points) The "oversimplified" expenditure multiplier equals: 0.25 0.75 4 5 10 Question 7 (10 points) What type of output gap exists, and how much is the gap equal to? recessionary gap equal to $200 inflationary gap equal to $200...
i need these answers ASAP pleass help. Question 2 Consider an economy defined by the following...
i need these answers ASAP pleass help.
Question 2 Consider an economy defined by the following system of equations: Y = A(Y.r) + G + X(E)- EX*(Y.E) H = H(Y.r) X(E)- EX*(Y, E) + X(r) = 0 Where: Y- national income; A= absorption; G= government expenditure; X= exports; E= nominal exchange rate; X*=imports; H= real money supply; H(o)= real money demand; r= the interest rate; K= capital inflows. Also note: A, > 0: Az <0; X > 0; X; <0;...
. Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G...
. Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G = 1500 M = 0 u* = 4 where Cd is consumption on domestically produced goods, G is government expenditure, M is imports, u* is the natural rate of unemployment, P is planned investment spending, X is exports, T is tax revenue and Pis potential output. Derive the equation for planned aggregate expenditure...
Problem 1: Consider the following GDP equation, consumption function, exports function. imports function and investment function and use them to answer the following questions Y; = C4 + 1++G+ + EX, – IM le = ā; – Õ(R4 – 7); 7 > 0 = āc + TÝ; 0<ī<1 G=ā, EX = 0 IM = 0 (a) Derive the IS curve as a relation between short run output Yt and the real interest rate gap Rt – Ť. (b) Find the...
ANSWER ONLY QUESTION 2 1. A country exports the same amount as it imports, hence net exports =0. The following equations describe its national accounts: National Accounts Expenditure Identity: Y = C + G + 1 Household Consumption: C = 180 +0.61Y -T) Government Expenditure: G=600 Private Sector Investment: I=1000-200R, R=2 Tax Revenue: T=0.17 (a) Find Y, T, C (b) Compute C/Y, G/Y and I/Y (percentage) (c) Find the government deficit: D= G-T 2. Re-solve for Y in exercise 1.,...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
please answer part h to part
k
Question 2 In the Keynesian cross, assume that the consumption function is given by C = 150 +0.7 (Y-T) Planned investment is: I = 100 - 10 *r Government purchases and taxes are both 50. a. Graph consumption as function of income. b.Graph investment as function of the real interest rate. c.Suppose that the real interest rate is 5. Write the equation of the planned expenditure. d.Suppose that the real interest rate is...
Please answer a, b, c, d
1. For the following question, assume that the consumption function is: C = 200+ 0.75(Y – T) The investment function is: I = 200 – 2.51 Government spending is fixed at G = 100 and the government has a balanced budget. The liquidity function is: L(Y,r) = Y – 10r Nominal money supply is 1,000 and the price level is equal to 2. a) Find the planned expenditure function and plot it on the...
Use the following information to answer questions 3 - 10 Y- C+IG+X-IM where: C= 200 + 0.75 DI I = 100 G 100 X = 100 IM 200 Also assume that T Tr-0 full-employment real GDP (YF) $2000 Question 6 (10 points) The "oversimplified" expenditure multiplier equals: 0.25 0.75 4 5 10 Question 7 (10 points) What type of output gap exists, and how much is the gap equal to? recessionary gap equal to $200 inflationary gap equal to $200...
i need these answers ASAP pleass help.
Question 2 Consider an economy defined by the following system of equations: Y = A(Y.r) + G + X(E)- EX*(Y.E) H = H(Y.r) X(E)- EX*(Y, E) + X(r) = 0 Where: Y- national income; A= absorption; G= government expenditure; X= exports; E= nominal exchange rate; X*=imports; H= real money supply; H(o)= real money demand; r= the interest rate; K= capital inflows. Also note: A, > 0: Az <0; X > 0; X; <0;...
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