Consider the simple macro model described by the following equations Y= C + A0 C =...
Consider the simple macro model described by the following equations
Y= C + A0
C = a + b(Y – T)
T = d + tY
Where Y is income, T is tax revenue, C is consumption, A0 is the constant autonomous expenditure, and a, b, d, and t are all positive parameters. Find the
equilibrium values of the endogenous variables Y, C, and T by writing the equations in matrix form and applying Cramer’s rule.
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Consider the simple macro model described by the following
equations
Y= C + A0
C =...
Consider the simple macro model described by the following equations Y= C + A0 C = a + b(Y – T) T = d + tY Where Y is in...
Consider the simple macro model described by the following equations Y= C + A0 C = a + b(Y – T) T = d + tY Where Y is income, T is tax revenue, C is consumption, A0 is the constant autonomous expenditure, and a, b, d, and t are all positive parameters. Find the equilibrium values of the endogenous variables Y, C, and T by writing the equations in matrix form and applying Cramer’s rule.
2. Consider the National Income model given by the following equations. Y-C-I.-G, = 0 C-a-B(Y -...
2. Consider the National Income model given by the following equations. Y-C-I.-G, = 0 C-a-B(Y - T) = 0 T-y-SY=0 where Y, C, and T are endogenous variables and I., G., a, b, Y, 8 are exogenous and B and 8 are positive fractions. Use Cramer’s Rule to find the effect of a change in G, on Y and C.
EC2040-5 Question 2 [40 points] Consider the following macroeconomic model: Y=C+10 + Go c-a+b(Y-T) Where the...
EC2040-5 Question 2 [40 points] Consider the following macroeconomic model: Y=C+10 + Go c-a+b(Y-T) Where the endogenous variables are Y,c and T, while the exogenous variables are Go and lo. The parameters are such that a > 0,d 0,0 < b a) Set up the model in matrix form. [5 points] b) Find the inverse of the matrix of parameters [10 points] c) Use Cramer's rule to find equilibrium income Y and equilibrium taxes [10 points] d) Find and discuss...
Consider IS- LM Model Real Sector: Y C+IG C ab (1-t) Y I d-e t-income tax...
Consider IS- LM Model Real Sector: Y C+IG C ab (1-t) Y I d-e t-income tax rate i-rate of interest G Go Money Market: Md Ms Md kY - Ms Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a 10; b 0.7;t= 0.2; d 25; k 0.25;1 0.04; e...
4. Points = 18. Consider IS-LM Model: Real Sector: Y=C+I+G C = a +b (1-t) Y...
4. Points = 18. Consider IS-LM Model: Real Sector: Y=C+I+G C = a +b (1-t) Y I=d-ei G=Go t-income tax rate i-rate of interest Money Market: Ma=M Ma= kY-li Mg = Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a = 10; b = 0.7; t = 0.2; d...
Suppose an inflationary economy can be described by the following equations representing the goods and money...
Suppose an inflationary economy can be described by the following equations representing the goods and money markets: C = 20 + 0.7Yd M = 0.4Yd I = 70 – 0.1r T = 0.1Y G = 100 X = 20 Ld = 389 + 0.7Y – 0.6r Ls = 145 where G represents government expenditure, M is imports, X is exports, Y is national income, Yd is disposable income, T is government taxes (net of transfer payments), I is investment, r...
Consider IS-LM Model: Real Sector: Y=C+I+G C=a+b (1-t) Y I=d-ei G=GO t-income tax rate i- rate...
Consider IS-LM Model: Real Sector: Y=C+I+G C=a+b (1-t) Y I=d-ei G=GO t-income tax rate i- rate of interest Money Market: Ma=M Ma=ky-li M = Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a= 10; b = 0.7; t = 0.2; d = 25; k = 0.25; 1 = 0.04;...
6) In the macroeconomic model below, Y is aggregate output, C is aggregate consump- tion, I....
6) In the macroeconomic model below, Y is aggregate output, C is aggregate consump- tion, I. 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, Io, and t are exogenous, and a, b, and k are parameters. Express this system of equations in a matrix form, clearly writing out and labeling each of the matrices....
QUESTION TWO An economy is represented by the following set of equations: Y = C +...
QUESTION TWO An economy is
represented by the following set of equations: Y = C + I C = 80m +
1.6Y where Y represents aggregate expenditure C represents
consumption expenditure by households I represents investment
expenditure by firms M is millions of Ghana cedis (a) (i) Explain
why the model is not an open economy? (2 marks) (ii) Explain
investment expenditure (I) as used in the model. (3 marks) (b)
Using the consumption function, estimate the autonomous
consumption; marginal...
Consider National-Income Model: National Income: Consumption: Investment: Government Sector: Taxes: Y=C+I+G C = a + b...
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...
2. Consider the National Income model given by the following equations. Y-C-I.-G, = 0 C-a-B(Y - T) = 0 T-y-SY=0 where Y, C, and T are endogenous variables and I., G., a, b, Y, 8 are exogenous and B and 8 are positive fractions. Use Cramer’s Rule to find the effect of a change in G, on Y and C.
EC2040-5 Question 2 [40 points] Consider the following macroeconomic model: Y=C+10 + Go c-a+b(Y-T) Where the endogenous variables are Y,c and T, while the exogenous variables are Go and lo. The parameters are such that a > 0,d 0,0 < b a) Set up the model in matrix form. [5 points] b) Find the inverse of the matrix of parameters [10 points] c) Use Cramer's rule to find equilibrium income Y and equilibrium taxes [10 points] d) Find and discuss...
Consider IS- LM Model Real Sector: Y C+IG C ab (1-t) Y I d-e t-income tax rate i-rate of interest G Go Money Market: Md Ms Md kY - Ms Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a 10; b 0.7;t= 0.2; d 25; k 0.25;1 0.04; e...
4. Points = 18. Consider IS-LM Model: Real Sector: Y=C+I+G C = a +b (1-t) Y I=d-ei G=Go t-income tax rate i-rate of interest Money Market: Ma=M Ma= kY-li Mg = Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a = 10; b = 0.7; t = 0.2; d...
Consider IS-LM Model: Real Sector: Y=C+I+G C=a+b (1-t) Y I=d-ei G=GO t-income tax rate i- rate of interest Money Market: Ma=M Ma=ky-li M = Mo Mo - exogenous stock of money 1) Setup the system of solutions in general form, with variables vector in the following order: Y, C, I, i; (6 points) 2) Now, suppose we have the following values of parameters: a= 10; b = 0.7; t = 0.2; d = 25; k = 0.25; 1 = 0.04;...
6) In the macroeconomic model below, Y is aggregate output, C is aggregate consump- tion, I. 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, Io, and t are exogenous, and a, b, and k are parameters. Express this system of equations in a matrix form, clearly writing out and labeling each of the matrices....
QUESTION TWO An economy is
represented by the following set of equations: Y = C + I C = 80m +
1.6Y where Y represents aggregate expenditure C represents
consumption expenditure by households I represents investment
expenditure by firms M is millions of Ghana cedis (a) (i) Explain
why the model is not an open economy? (2 marks) (ii) Explain
investment expenditure (I) as used in the model. (3 marks) (b)
Using the consumption function, estimate the autonomous
consumption; marginal...
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...
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