We have
Y=C+5 be this equation (1)
C=10+0.8Y be the equation (2)
Put Y value of equation (1) in equation (2) we get
So we get
C= 10+0.8(C+5) = 10+ 0.8C +4 = 14+ 0.8C
0.2C=14
C= 70
Putting value of C in equation (1)
We get
Y= 70+5 = 75
So we have Y= 75 and C = 70
7. In the following macroeconomic model, the unknowns are Y (national income) and C (consumption): Y=C+5...
Differential equations problem
8. Solve the following macroeconomic model. Let C(t) be the consumption, I(C) the investment of capital and Y(t) the national rent. C(1)+I() = Y(), 10=kC'(), CO)=aY() + b Y(0) = Y 0<a<1,5, k > 0 Solve for Y(t) & I(t). Calculate the long run value of y(t)/I(t)
1. Consider the following consumption function and the national income identity. C=0.01Y2 +0.8Y+200 Y=C+S Where, C is consumption and Y is national income, and S is saving a) Calculate the value of marginal propensity to consume (MPC) when Y=8 b) Find the expression for savings function and using that function calculate marginal propensity to save (MPS) when Y= 8.
8. Solve the following macroeconomic model. Let C(t) be the consumption, I(t) the investment of capital and Y(t) the national rent. C(t) = aY (t) + b C(t) + I(t)=Y(t), I(t)= kC'(t), Y(0) = Y., 0<a<1,b,k > 0 Solve for Y(t) & I(t). Calculate the long run value of y(t)/I(t)
15.2.2
15.2.1 Consider the following macroeconomic model: Y = C+1, C = a +by (a > 0, 0<b< 1). The endogenous variables Y and C are national income and consumption respec- tively, and the exogenous variable I is investment. Find the equilibrium values of Y and C in terms of I and the parameters a, b. Find also an expression for the change in Y when I increases from Io to I1, determine its sign and comment on its magnitude....
Assume the following macroeconomic variable in $ billion) for an economy: Y-national income - Aggregate Expenditures Aggregate Expenditures Consumption + Investment + Government Spending + Net Export Assuming that the full employment level in $6,000 billion, determine the change in government spending needed to reach full employment. (Hint: calculate the current GDP then calculate aggregate expenditures using national income of $6,000 and find the difference) Consumption (80% of disposable or after tax income) + $300 C = $300 +0.8 (Y-T)...
in the macroeconomics model below matrix
In the macroeconomic model below, Y is aggregate output, C is aggregate consump- tion, Io is aggregate investment, Go is government spending, T is the total amount of taxes collected by the government, and t is income tax rate. The variables Y, C, and T are en dogenous, Go, lo, and t are exogenous, and a, b, and k are parameters. Express this system of equations in a matrix form, clearly wrting out and...
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=GO T=f+jY <b<1 (<r<1 a>0 in mln dollars; k>O in mln dollars; Go >O in mln dollars fo in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y*) in reduced form (3 points); 3) If we know the parameters of the system, find the...
1. Points = 18. Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b (Y-T) I=k+rY G=Go T=f+jY 0<b<1 (<r<1 a> 0 in mln dollars; k>0 in mln dollars; Go >O in mln dollars p> 0 in mln dollars; 0<j<1 1) Discuss in words the meaning of each of the equations in the model (3 points); 2) Find the equilibrium level of GDP (Y) in reduced form (3 points); 3) If we know the...
Let the national-income model be Y = C + I0+ G C = a + b(Y –T0)(a > 0, 0 < b < 1) G = gY(0 < g < 1) a. Solve the above national-income model by Crammer’s rule. b. In your answers in part a, what restriction on the parameters is needed for a solution to exist?
Economic model is characterised by the following data:
* Private consumption C = 800 + 0.9*DI
* Gross investment Ig = 400
* Government spending G = 500
* Sum of Taxes T = 300
* Disposable income DI = Y – T
Calculate:
* Equilibrium level of income Y (Y= 14300)
* Private consumption at macroeconomic equilibrium C =
13400
Develop equation of saving and calculate amount of saving at
the point of macroeconomic equilibrium. S=. 600
Task 4....