Consider a simple macro model with a constant price level and demand-determined output. The equations of...
Consider a simple macro model with a constant price level and demand-determined output. The equations of the model are: C = 60 + 0.43Y, I = 150, G = 260, T = 0, X = 90, IM = 0.06Y. A national income of 1200 results in desired aggregate expenditure of
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Consider a simple macro model with a constant price level and
demand-determined output. The equations of...
16) Consider a macro model with a constant price level and demand-determined output. A rise in...
16) Consider a macro model with a constant price level and demand-determined output. A rise in the net tax rate ________ the simple multiplier and ________ equilibrium national income. A) lowers; raises B) lowers; lowers C) raises; raises D) lowers; has no effect on E) raises; has no effect on 17) Other things being equal, an exogenous fall in the domestic price level leads to a rise in private-sector wealth. As a result, there is A) a downward shift in...
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.
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.
Consider the net export function and the AE curve in a simple macro model with demand...
Consider the net export function and the AE curve in a simple macro model with demand - determined output What is the effect of an exogenous increase in the domestic price level? O A. The net export function rotates upward and the AE curve shifts upward OB. The net export function shifts upward and the AE curve shifts downward O C. The net export function and the AE curve both shift upward. O D. The net export function and the...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a decrease in aggregate supply. The result will be a Select one: a. rise in real GDP but price level changes will be indeterminate. b. rise in real GDP and a fall in the price level. c. an indeterminate change in real GDP and a rise in the d. an indeterminate change in real GDP and a fall in the price level e. rise in...
The long-run equilibrium level of output is determined by (changes in the price level, consumer demand,...
The long-run equilibrium level
of output is determined by (changes in the price level,
consumer demand, capital, labor, and technology);
Therefore it will (increase to a new equilibrium, remain at
the full-employment level, decrease to a new equilibrium)
if the aggregate demand curve shifts to the right.
5. The long-run aggregate supply curve Aa Aa Suppose the hypothetical economy of Larryopia produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple line (diamond symbols)...
1.Consider a closed economy with no taxes, whose consumption function, investment level & government spending level...
1.Consider a closed economy with no taxes, whose consumption function, investment level & government spending level are given by the following equations: C= 5,000 + .80Y I= 9,000 G= 2000 whereGrepresents government spending. The equilibrium condition is, as always, that the value of the economy’s output (Y) must be matched by aggregate demand, but now aggregate demand contains a third element, G. a. What is the equilibrium level of aggregate output for this economy? b. What is the saving function for this...
Create a graph for an aggregate demand curve. Use the price level for the vertical axis...
Create a graph for an aggregate demand curve. Use the price level for the vertical axis and the Real GDP for the horizontal axis. Explain in a graph how it is related to the income expenditure model
Consider the simple Keynesian model in the AD-AS framework. Currently the economy is located in the...
Consider the simple Keynesian model in the AD-AS framework. Currently the economy is located in the horizontal section of the AS curve producing Q1. If aggregate demand rises, then a.the price level will rise. b.the price level may rise. c.the price will decline. d.Real GDP will rise. e.none of the above
Please answer these macro multiple choices Which of the following is a defining characteristic of the...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
Consider the net export function and the AE curve in a simple macro model with demand - determined output What is the effect of an exogenous increase in the domestic price level? O A. The net export function rotates upward and the AE curve shifts upward OB. The net export function shifts upward and the AE curve shifts downward O C. The net export function and the AE curve both shift upward. O D. The net export function and the...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a decrease in aggregate supply. The result will be a Select one: a. rise in real GDP but price level changes will be indeterminate. b. rise in real GDP and a fall in the price level. c. an indeterminate change in real GDP and a rise in the d. an indeterminate change in real GDP and a fall in the price level e. rise in...
The long-run equilibrium level
of output is determined by (changes in the price level,
consumer demand, capital, labor, and technology);
Therefore it will (increase to a new equilibrium, remain at
the full-employment level, decrease to a new equilibrium)
if the aggregate demand curve shifts to the right.
5. The long-run aggregate supply curve Aa Aa Suppose the hypothetical economy of Larryopia produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple line (diamond symbols)...
Please answer these macro multiple choices
Which of the following is a defining characteristic of the AD/AS macro model in the short run? O A. firms cannot operate near their normal capacity O B. technology used in production is endogenous and variable O C. factor supplies are assumed to be constant OD. the level of potential output fluctuates with the price level O E. factor prices are assumed to be constant Assume the economy is initially in equilibrium with desired...
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