Desired consumption, desired investment, and government spending in a closed economy are
Cd = 260 - 100r + 0.2Y
Id = 100 - 300r
G = 220
What value of the real interest rate clears the goods market when Y = 600? (Please show your work)
Desired consumption, desired investment, and government spending in a closed economy are Cd = 260 -...
Desired consumption, desired investment, and government spending in a closed economy are Cd = 260 - 100r + 0.2Y Id = 100 - 300r G = 220 What value of the real interest rate clears the goods market when Y = 600? (Please show your work)
Given the following: Output (Y): 10,000 Government Spending (G): 500 Desired Consumption (C): 9,500 If the goods market is in equilibrium for a closed economy, what is the desired level of investment?
Consider the following classical economy: Desired consumption: C9 = 320 + 0.500 Y - 200r. Desired investment: P = 200 - 300r. Government purchases: G = 100. Net exports: NX = 140 - 0.100Y - 0.500e. Real exchange rate: e = 18 + 600r. Full-employment output: Y = 900. a. What are the equilibrium values of the real interest rate, real exchange rate, consumption, investment, and net exports? Real interest rate = Real exchange rate = ||| Consumption = ||...
Consider the following economy (with flexible exchange rate system): • Desired consumption: Cd = 300 + 0.5Y −2000r • Desired investment: Id = 200−3000r • Government purchases: G = 100 • Net export: NX = 350−0.1Y −0.5e • Real exchange rate: e = 20 + 1000r • Full employment: ¯ Y = 900. • Nominal money stock: M = 4354 • Real money demand: L = 0.5Y −200r 1 (a) Find the equations for NX(r,Y )) and Sd(r,Y )−Id(r) and...
Question 1: General Equilibrium in closed and open economies [50 marks] Consider the following closed Keynesian economy Desired consumption, Cd = 1000 + 0.6(Y-T) - 300r; Desired investment, Id = 600 - 300r; Money deman d, L = 0.6Y - 300r; Output, Ȳ = 4000; Expected inflation, πe = 0; Calculate the investment and consumption. c. Find the new long-run equilibrium by taking M = 6000 and the price level as flexible (repeat part a). The following are the steps...
The income identity for a closed economy says that Y-C+I+G Assume that in the Economy of Berkeley GDP (Y) is equal to 6,000 and consumption (C) is given by the equation C 600+0.6(Y - T). In addition, investment (I) is given by the equation 1 2, 000-100r where r is the real of interest rate in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C, I, and r?
An economy has full-employment output of 9,000, and government purchases are 2,000. Desired consumption and desired investment are as follows: Real Interest Rate(%) Desired Consumption 6,100 6,000 5,900 5,800 5,700 Desired Investment 1,300 1,200 ou AWN 1,100 1,000 900 c. If the goods market is in equilibrium, what are the values of the real interest rate, desired national saving, and desired investment? r=%, sd = =
The income identity for a closed economy says that Y = C+I+G Assume that in the Economy of Berkeley GDP (Y) is equal to 6,000 and consumption (C) is given by the equation: C = 600 + 0.6(Y-T) In addition, investment (I) is given by the equation I = 2,000 - 100r where r is the real of interest rate in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C,...
Question 1: General Equilibrium in closed and open economies [50 marks] Consider the following closed Keynesian economy Desired consumption, Cd = 1000 + 0.6(Y-T) - 300r; Desired investment, Id = 600 - 300r; Money deman d, L = 0.6Y - 300r; Output, Ȳ = 4000; Expected inflation, πe = 0; Assume that we are in a closed economy. Suppose that T = G = 300 and M = 8000. Find the equilibrium values of output, consumption, investment, the real interest...
worth 9 points The income identity for a closed economy says that Y-C+I+G Assume that in the Economy of Berkeley GDP (Y) is equal to 6,000 and consumption (C) is given by the equation C-600+0.6(Y - T). In addition, investment (I) is given by the equation I-2,000 100r where r is the real of interest rate in percent. Taxes (T) are 500 and government spending (G) is also 500. What are the equilibrium values of C, I, and r?