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Endogenous variables differ from exogenous variables in that exogenous variables are explained The following table lists...
3. Suppose we had an economy summarized by the following equations: Expenditure equation: Y = C +1:+G + NX, Closed economy: NX: = 0 Consumption equation: C = Co + mpc * Y:-1 Investment equation: 1: = 10 +a (C-C-1) Government spending: G = G Where the variables and parameters of the model are as follows: Y,: output at timet Y: natural level of output Ce: consumption at timet Co: exogenous consumption (occurs every period) 1: investment at timet 10:...
4. Country A is located on a small island that is isolated from the outside world. The country has one representative consumer, whose preference is represented by: U (c, l) = ln(c) + ln(l) There is one representative firm in the economy which is owned by the consumer, it produces one type of good that can be used for consumption or government expenditure using capital and labour as inputs. The firm owns the capital it uses and it’s production technology...
4. Country A is located on a small island that is isolated from the outside world. The country has one representative consumer, whose preference is represented by: U(c,l) = ln(c) + ln(l) There is one representative firm in the economy which is owned by the consumer, it produces one type of good that can be used for consumption or government expenditure using capital and labour as inputs. The firm owns the capital it uses and it’s production technology is...
4. Country A is located on a small island that is isolated from the outside world. The country has one representative consumer, whose preference is represented by: U (c, l) = ln(c) + ln(l) There is one representative firm in the economy which is owned by the consumer, it produces one type of good that can be used for consumption or government expenditure using capital and labour as inputs. The firm owns the capital it uses and it’s production technology...
3. The following table gives rounded annual GDP figures as of the third quarter (July-Aug-Sep) 2018: Consumption spending $14,050 Investment spending $3,710 Depreciation $1,750 Government spending on goods and services $3,550 Government transfer payments $8,200 Total exports $2,540 Total imports $3,195 a. Calculate GDP using the spending approach. (Note that not all values will be used.) b. Calculate the percentage of each spending component relative to total GDP. Are your percentages consistent with what we should expect for the US...
4. Country A is located on a small island that is isolated from the outside workd. The country has one representative consumer, whose preference is represented by There is one representative firm in the econony which is owned by the consumer, it produces one type of good that can be used for consumption or government expenditure using capital and labour as inputs. The firm ows the capital it-and it's production technology represented by where: is the total factor productivity, and...
1. Complete the table below where the cells are blank. (10 pts) Output Sensor Saving Inxstant Export Import ort GDP=DI Net Agg Age Unnind Output Invent Emploxmnt 250 260 310 15 330310 2. What number is unplanned inventories at output of $270 million? Explain what the unplanned inventories number means at that output level? (2 pts) 3. At $330 million of output what must happen in this open economy to reach equilibrium? (2 pts) 4. Equilibrium is achieved at what...
Compute the new equilibrium values of * * Y i ' and ' . Consider the following IS-LM model of a closed macroeconomy The Goods Market (1)Components of planned aggregate expenditure (2) Consumption function (3) (4) Government expenditure (5) Disposable income (6)Tax function (7) Goods market equilibrium 1=bo +by-b21 G=G Y,Y-T Planned investment The Money Market し=do +d,Y-d,i (8) (9) (10) Money demand Money supply Money market equilibrium MIP-MIP All of the variables here are as listed in the notes,...
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)...
1. (26 marks total) Math Review: Recall the IS-L.M model from your intermediate macro course In particular, the goods-market equilibrium condition was Y-C(Y-T)+I (r) +G, and the money-market ecluilibrunn condition was m = L (r, Y). Here, the exogenous variables are G government spending), T (taxes), and m (real money supply). The endogenous variables are Y (output, or income) and r (real interest rate). C() is the consumption function, which is increasing in disposable income Y-T, bit less than one-for-one...