4. a) (10 marks) Given the fixed nominal wage imposed in Question 2, suppose the government decided to choose a value of G that would bring the economy back to full employment. What, if any, value of G would achieve this target? Fixed nominal wage: W - 50 b) (5 marks) What values of Y, P, i, N, N,, I, WIP and would this imply? c) (10 marks) Illustrate the effects of this fiscal policy on this economy, in a diagram that includes the labour market, the production function, aggregate demand and aggregate supply, and IS and LM. Explain briefly.
Homework Answers
Add Answer to:
Consider the following model of a closed macroeconomy, The Labour Market Y 63.246N -N2/12 N 63.24...
Consider the following model of a closed macroeconomy. The Labour Market Y = 60N - N2/2...
Consider the following model of a closed macroeconomy. The Labour Market Y = 60N - N2/2 N = 60-W/P (1) (2) Production function Labour demand N = (0.5)W/P (3) Labour supply Labour market equilibrium N. = N, EN (4) The Goods Market C = 140+0.75Y) I = 20+0.2Y - 200i G=150 (5) Consumption function (6) Investment function (7) Government expenditure (8) Disposable income (9) Tax function (10) Goods market equilibrium Y = Y-T T =Y 3 Y=C+I+G The Money Market...
Compute the new equilibrium values of * * Y i ' and ' .
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 a perfectly competitive labour market, Labour Demand is given by LD = 150 – 5W,...
Consider a perfectly competitive labour market, Labour Demand is given by LD = 150 – 5W, and Labour Supply is given by LS = 10W, where W is the market wage rate. In order to stimulate employment in this industry, the government offers workers an additional $3 for each unit of labour worked. Find the new market equilibrium take-home wage for workers? I found the original equilibrium price which is $10. but i dont know what to do now...
1. Labour Market. Draw a diagram of the labour market where there above the equilibrium level....
1. Labour Market. Draw a diagram of the labour market where there above the equilibrium level. Use I to denote the amount of labour to denote the amount of labour hired. bour market where the real wage is stuck note the amount of labour willing to work and L1 Now suppose there is an increase in technology that raises the demand the new demand curve and explain what happens to the and curve and explain what happens to the number...
the labour market model a. Take a look at figure 9.12, the labour market model. Describe...
the labour market model
a. Take a look at figure 9.12, the labour market model. Describe
position B. Explain why B is not a Nash equilibrium. What would
happen?
b.
In a. you’ll describe an adaptation process. However, that might
not take place. For what reasons?
Labour supply Average product of labour Real wage Price-setting curve Equilibrium unemployment Demand-deficient or cyclical unemployment, at B Wage-setting curve Total involuntary unemployment, at B Employment, N The Nash equilibrium At point B, total...
Consider the following model of the economy Production function: Y = A·K·N – N2/2 Marginal produ...
Consider the following model of the economy Production function: Y = A·K·N – N2/2 Marginal product of labor: MPN = A·K – N. where the initial values of A = 10 and K = 10. The initial labor supply curve is given as: NS = 50 + 4w Initial conditions in the goods market Cd = 790 + .50(Y-T) – 500r Id = 1000 – 500r G = 800 T = 100 Md/P = 110 + 0.5Y- 1000(r + πe) ...
Consider a closed economy described by a Keynesian model with labour contract and nominal wage rigidity...
Consider a closed economy described by a Keynesian model with labour contract and nominal wage rigidity . The economy is originally in a general equilibrium. Let's now consider an unexpected monetary expansion. Please simply answer what happen to employment (N) and the real interest rate (r) in the short-run equilibrium, and what happen to price (P) in the long run.
Consider the neoclassical closed economy model: Y=COY-T)+1(t) + G Y=F(K.L) M/P L(r+z* Y) CY-T) is describing...
Consider the neoclassical closed economy model: Y=COY-T)+1(t) + G Y=F(K.L) M/P L(r+z* Y) CY-T) is describing consumptions as a function of disposable income, Kand L are fixed and do not change over time, G and T are chosen by government. And are exogenous and fixed. 1- Suppose K 150, L=500 Y-2.5 K"L- C 12+0.7(Y-T) 250 G 250, T I60-400r P 1 a 0.3 a) Calculate GDP value: I Derive the equations for marginal product of labor & marginal product of...
The next several questions refer to the case of an economy with the following equations: Y...
The next several questions refer to the case of an economy with the following equations: Y = 50K0.3L0.7 with K=100 and L=100 G=1000, T=1000 I = 2000- 1000r C = 200 + 0.5(Y-T) real money demand: (M/P)d = 0.2Y - 1000r nominal money supply: M = 3200 (Assume a closed economy: Y = C + I + G. Assume the economy is in the long run equilibrium.) Compute the aggregate price level (P) ?
Question 4 Discuss the following statements: (a) According to the IS-LM model how would an increase...
Question 4 Discuss the following statements: (a) According to the IS-LM model how would an increase of government spending affect equilibrium interest rates and income in a short-run closed macroeconomy. (b) According to the Classical Model of the aggregate economy, changes in aggregate demand have no effect on the amount of output produced, only the average pricelevel may be affected. (c) Crowding out through interest rates occurs when expansionary fiscal pol-icy causes interest rates to fall. (d) The relative bargaining...
Consider the following model of a closed macroeconomy. The Labour Market Y = 60N - N2/2 N = 60-W/P (1) (2) Production function Labour demand N = (0.5)W/P (3) Labour supply Labour market equilibrium N. = N, EN (4) The Goods Market C = 140+0.75Y) I = 20+0.2Y - 200i G=150 (5) Consumption function (6) Investment function (7) Government expenditure (8) Disposable income (9) Tax function (10) Goods market equilibrium Y = Y-T T =Y 3 Y=C+I+G The Money Market...
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,...
1. Labour Market. Draw a diagram of the labour market where there above the equilibrium level. Use I to denote the amount of labour to denote the amount of labour hired. bour market where the real wage is stuck note the amount of labour willing to work and L1 Now suppose there is an increase in technology that raises the demand the new demand curve and explain what happens to the and curve and explain what happens to the number...
the labour market model
a. Take a look at figure 9.12, the labour market model. Describe
position B. Explain why B is not a Nash equilibrium. What would
happen?
b.
In a. you’ll describe an adaptation process. However, that might
not take place. For what reasons?
Labour supply Average product of labour Real wage Price-setting curve Equilibrium unemployment Demand-deficient or cyclical unemployment, at B Wage-setting curve Total involuntary unemployment, at B Employment, N The Nash equilibrium At point B, total...
Consider the neoclassical closed economy model: Y=COY-T)+1(t) + G Y=F(K.L) M/P L(r+z* Y) CY-T) is describing consumptions as a function of disposable income, Kand L are fixed and do not change over time, G and T are chosen by government. And are exogenous and fixed. 1- Suppose K 150, L=500 Y-2.5 K"L- C 12+0.7(Y-T) 250 G 250, T I60-400r P 1 a 0.3 a) Calculate GDP value: I Derive the equations for marginal product of labor & marginal product of...
Most questions answered within 3 hours.
-
The random variable X is exponentially distributed, where X
represents the time it takes for a...
asked 7 minutes ago -
a) Write a verilog module for 1:4 Demultiplexer using verilog
primitives.
b) Design 1-to-4 DEMUX using...
asked 1 minute ago -
MATLAB
write a MATLAB function (1) output a third-order polynomial
function with the coefficients as the...
asked 14 minutes ago -
A z-score
communicates a raw score’s "relative standing"
under the normal curve in relation to:
asked 23 minutes ago -
An object is vibrating on a spring with the following equation
of motion:
?=(30 ??)cos((2?)/(160)?)
a)...
asked 22 minutes ago -
Vulcan Flyovers offers scenic overflights of Mount St. Helens,
the volcano in Washington State that explosively...
asked 24 minutes ago -
If organizations do not adapt fast enough and move incrementally
from the twentieth-century model to the...
asked 25 minutes ago -
A helium balloon with 2.5L of gas has a gauge pressure of 10,000
Pa. The balloon...
asked 29 minutes ago -
What is responsible for Jupiter's enormous magnetic field?
asked 45 minutes ago -
At the end of the year, a company offered to buy 5,000 units of
a product...
asked 46 minutes ago -
Implement C++ program for each of the following.
Let D = [-48, -14, -8, 0, 1,...
asked 1 hour ago -
Consider a labor market in which LD = 400 – 4W and LS = 250 +...
asked 1 hour ago