Consider the economy described by the following equations: C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a. Complete the table shown below to find short-r...
Consider the economy described by the following equations:
| C | = 1,600 + 0.9 (Y – T) |
| I p | = 800 |
| G | = 1,600 |
| NX | = 200 |
| T | = 1,600 |
| Y* | = 29,000 |
a. Complete the table shown below to find short-run equilibrium
output. Consider possible values for short-run equilibrium output
as they are given in the table below.
Instructions: If you are entering any negative
numbers be sure to include a negative sign (-) in front of those
numbers.
| OutputY | Planned aggregate expenditure (PAE) | Y – PAE | Y = PAE? |
| 27,200 | (Click to select) Yes No | ||
| 27,400 | (Click to select) No Yes | ||
| 27,600 | (Click to select) Yes No | ||
| 27,800 | (Click to select) Yes No | ||
| 28,000 | (Click to select) No Yes |
b. Short-run level of equilibrium output:
c. What is the output gap for this economy?
Instructions: If you are entering any negative
numbers be sure to include a negative sign (-) in front of those
numbers. The actual unemployment rate should be rounded to two
decimal places.
Output gap: where Y* = 29,000
If the natural rate of unemployment is 5 percent, what is the
actual unemployment rate for this economy (use Okun’s law given
Y* = 29,000).
Actual unemployment rate: %
Homework Answers
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Consider the economy described by the following equations: C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a. Complete the table shown below to find short-r...
If the natural rate of unemployment is 6 percent, what is the actual unemployment rate for...
If the natural rate of unemployment is 6 percent, what is the
actual unemployment rate for this economy (use Okun’s law given
Y* = 29,000).
Actual unemployment rate: ?? %
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Actual unemployment rate: ?? %
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