Please provide clear work. Thanks!
Homework Answers
Add Answer to:
Please provide clear work. Thanks!
Consider the following IS-LM model in a closed economy: C =...
Liquidity Trap in the IS-LM Model (50 points) Consider a closed economy in which output is...
Liquidity Trap in the IS-LM Model (50 points) Consider a closed economy in which output is the sum of consumption, investment and government purchases Y = C + I + G, and where C, I and G are respectively given by C = 5000 – 2000 r + 0.8(Y– T), I = 1500 – 3000 r, and G = 2500. Note also that lump-sum taxes T are given by 1250. (a) (5 points) Recalling that national savings equals S =...
B2. Closed Economy IS-LM-FE model: The behaviour of households and firms in a closed economy is...
B2. Closed Economy IS-LM-FE model: The behaviour of households and firms in a closed economy is represented by the following equations Desired consumptionC 200+0.8(Y-T-500r Desired investment : r = 200-500r Real money demand where expected inflation is ㎡-0.10 and taxes depend on income according to T 20+0.25Y. (a) Derive an expression for the IS curve with the real interest rate on the left side of the equation. How does the position of the IS curve depend on G? (b) If...
Consider the following IS-LM model: C = 218 +0.44YD 1 = 148 +0.19Y-1,0211 G = 283...
Consider the following IS-LM model: C = 218 +0.44YD 1 = 148 +0.19Y-1,0211 G = 283 T = 226 i = 0.04 The IS equation is determined to be Y = 1,485.30 - 2,759.46i. The LM equation is given as i = 0.04. Using the IS and LM equations, the equilibrium real output, Y. is (Round your response to the nearest integer.) Using the IS-LM model, the equilibrium value of consumption, C, is . (Round your response to the nearest...
Question 1: IS-LM-AD in a closed economy (35 Marks) The following represent the key equations for...
Question 1: IS-LM-AD in a closed economy (35 Marks) The following represent the key equations for a closed economy: Md 18+0.5Y-450 Money demand C" = 6 + 0.8(Y-T)-250r 1 -33-200r u-u0.3 a) Write out the equations for the IS and LM curves for this economy, with the real Desired consumption Desired investment Initial budget position Okun's law Y-Y rate of interest (r) on the left-hand side. Next, use these relationships to find the AD curve, written with output (Y) on...
Consider the following numerical example of the IS-LM model: C = 182 +0.5Y) 1 = 157...
Consider the following numerical example of the IS-LM model: C = 182 +0.5Y) 1 = 157 +0.12 Y- 890i G = 219 T = 175 i = 0.04 Derive the IS relation. (Hint: You want an equation with Y on the left side of the equation and everything else on the right.) Y=O-Di (Round your calculations of the intercept and slope terms to two decimal places.)
6. 7. Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
6. 7. Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
d 21. Consider the following IS-LM model: C = co +61 (Y – T) I =...
d 21. Consider the following IS-LM model: C = co +61 (Y – T) I = bo + b Y – bai M d¡Y – dzi Р M P Р a. where (b+c) <1 b. Derive IS equation. Derive and determine its sign. [5 points]- di di c. b. Derive LM equation. Derive and determine its sign. [5 points]- d. c. Assume that LM curve is ** dY t dY () M P =dY Solve for the equilibrium output and...
Assume the following equations for the goods and money market of an economy: C = 250...
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...
Consider the following static (closed-economy) version of the Classical model: Y = F (K, L) C...
Consider the following static (closed-economy) version of the Classical model: Y = F (K, L) C = A + a(Y − T ), with A > 0 and 0 < a < 1, I = B − br, with B, b > 0, where A and B represent respectively the autonomous components of consumption (C) and investment (I). Assume the factor inputs, K (capital) and L (labor), are fixed in supply. Finally, assume that government expenditures (G) and taxes (T)...
B2. Closed Economy IS-LM-FE model: The behaviour of households and firms in a closed economy is represented by the following equations Desired consumptionC 200+0.8(Y-T-500r Desired investment : r = 200-500r Real money demand where expected inflation is ㎡-0.10 and taxes depend on income according to T 20+0.25Y. (a) Derive an expression for the IS curve with the real interest rate on the left side of the equation. How does the position of the IS curve depend on G? (b) If...
Consider the following IS-LM model: C = 218 +0.44YD 1 = 148 +0.19Y-1,0211 G = 283 T = 226 i = 0.04 The IS equation is determined to be Y = 1,485.30 - 2,759.46i. The LM equation is given as i = 0.04. Using the IS and LM equations, the equilibrium real output, Y. is (Round your response to the nearest integer.) Using the IS-LM model, the equilibrium value of consumption, C, is . (Round your response to the nearest...
Question 1: IS-LM-AD in a closed economy (35 Marks) The following represent the key equations for a closed economy: Md 18+0.5Y-450 Money demand C" = 6 + 0.8(Y-T)-250r 1 -33-200r u-u0.3 a) Write out the equations for the IS and LM curves for this economy, with the real Desired consumption Desired investment Initial budget position Okun's law Y-Y rate of interest (r) on the left-hand side. Next, use these relationships to find the AD curve, written with output (Y) on...
Consider the following numerical example of the IS-LM model: C = 182 +0.5Y) 1 = 157 +0.12 Y- 890i G = 219 T = 175 i = 0.04 Derive the IS relation. (Hint: You want an equation with Y on the left side of the equation and everything else on the right.) Y=O-Di (Round your calculations of the intercept and slope terms to two decimal places.)
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
d 21. Consider the following IS-LM model: C = co +61 (Y – T) I = bo + b Y – bai M d¡Y – dzi Р M P Р a. where (b+c) <1 b. Derive IS equation. Derive and determine its sign. [5 points]- di di c. b. Derive LM equation. Derive and determine its sign. [5 points]- d. c. Assume that LM curve is ** dY t dY () M P =dY Solve for the equilibrium output and...
Most questions answered within 3 hours.
-
What is a highly unreasonable omission or misrepresentation
involving an extreme departure from the standards of...
asked 2 minutes ago -
What are the three mechanisms that control hormone release and a
example of each.
asked 15 minutes ago -
What would happen to the price level and real GDP if new, large
reserves of petroleum...
asked 17 minutes ago -
2. According to economists, people pollute because
a. They have low self esteem
b. They are...
asked 11 minutes ago -
For this project you will be writing up a simple Clock program
to keep track of...
asked 18 minutes ago -
The December 31, 2018, adjusted trial balance for Fightin' Blue
Hens Corporation is presented below.
...
asked 22 minutes ago -
E21-11 (L02) (Amortization Schedule and Journal Entries for
Lessee) Laura Leasing Company signs an agreement on...
asked 40 minutes ago -
Joe Mataya’s company provides after-sales support for all the
photo-copiers and high-load printers on our campus....
asked 47 minutes ago -
In a statistics class there are 12 students. Five of the
students are seniors and the...
asked 1 hour ago -
can someone please explain for me in any easy way what does
Dipole mean ?
asked 1 hour ago -
Consider the following grammar:
<S> → <A> a <B> b
<A> → <A> b | b...
asked 1 hour ago -
Chapter’s 2 “Dominos Sizzles with Pizza Tracker” Case Study.
Ansewer the following questions:
1) What kinds...
asked 1 hour ago