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An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregates are measured in billions of Namibian dollars, N$. Y = C + I + G + X – M C = 10 + 0.2Yd T = 30 + 0.2Y TR = 80 – 0.05Y I = 35 G = 15 E =
An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregate are measured in billions of Namibian dollars, N$: Y = C + I + G + X – M C = 10 + 0.8 Yd T = 10+ 0.2Y X = 80 I = 35 G = 15 TR = 10 – 0.05Y M = 22 + 0.1Y Where: Y is domestic income Yd is private disposable income C is...
Consider an open economy described by the following equations (all figures in millions of dollars): Y = C + I + G + NX Y = 8,000 (current value of output) G = 2,000 T = 1,000 + .1(Y) C = 450 + 0.75 (Y – T) I = 2,000 – 40 r NX = 700- 600ɛ (ɛ is the exchange rate) r = r* = 5 a) What is the current state of this economy in term of national...
An economy is described by the following equations: Y = C + I + G C = 0.75 YD + 20 T = 0.2 Y + 4 G = 20 I = 25 Calculate equilibrium output and equilibrium private and public saving. With how much does equilibrium output falls, if government reduces government expenditure with 1 unit? Explain the event in b) for the multiplier diagram
Answer the question (c) 6. An open economy is described by the following equations C = 1000 + 0.6(Y-T) I 20, 000 200r G 5000 T = 5000 MD MS = 60.000 CA = NX = 2000-0.1Y-1000e KA = 5500+ 2(r-r") r"--10 (a) Derive the IS curve (Y as a function of r and e), LM curve (Y as a function of r) and the BP curve (r as a function of Y, e, and the capital mobility parameter z)...
Question 3 Consider a closed economy described by the following equations: Y=C+I+G Y-5,000 G 1,000 T= 1,000 C 250+0.75 (Y -T) 1,000-50 a. (3 points) In this economy, compute private saving, public saving, and national saving. b. (2 points) Find the equilibrium interest rate. c. (2 points) Draw a graph containing the saving and investment curves for this economy Show the financial market equilibrium. d. (2 points) Now suppose the G rises to 1,250. Compute private saving, public saving, and...
An economy is initially described by the following equations: C = 60 + 0.8(Y-T) I = 120-5 M/P = Y-25 G = 200 T = 200 M = 3000 P = 3 d. Now assume that the central bank adjusts the money supply to hold the level of income constant. What is the new equilibrium interest rate? What must the money supply be? What is the tax multiplier? new equilibrium : 10 new money supply: 2400 tax multiplier: -4 Incorrect...
Stacked An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5 M/P = Y-25r G = 200 T = 200 M = 3000 P = 3 a. Derive and graph the IS and LM curves. Use the accompanying diagram to graph the IS and LM curves by placing the endpoints at the correct location, then place point A at the equilibrium interest rate and level of income. IS: Y= LM: Y= IS: Y= LM:...
Consider an economy in long run equilibrium described by the following equations: Y = C + I + G + NX Y = 5000 G = 1000 T = 1000 C = 250 + 0.75*( Y - T ) I = 1000 - 50*r NCO = 500 - 50*r Where r is the real interest rate (in % terms). Suppose G rises to 1250 without any change in T. Solve again for the equilibrium real interest rate and the rest...
Consider an economy with the following equations: T=100+0.2Y L=0.5Y-500i Y=2500 G=600 M=133,200 (short run price) If government purchases rises from 600 to 690, calculate the multiplier in the short run C" 300 + 0.75 (Y-T)-300T 200 200r Te 0.05 P, 120
C. Consider an economy described by the following equations: Y = C+I+G+NX K = 2,500 40,000 = K0.5 0.5 = 2000 T = 2000 C = 600+.8 (Y-T) I = 2000 - 40r NX = 1000 - 400€ - 0.002Y T = r = 10 1. [4 points) What is the long-run level of output? 2. [7 points) What is the equilibrium value of the real exchange rate? 3. [9 points) What are the equilibrium values of national saving, investment...