Question

II. Now consider the following model and answer related questions. Y-C+I+G+X-IM C- 49+0.9DI 1-300-2000r G-800 T-10+1/3(Y) X-IM = 60 a. If fed decides to set the interest rate at r = 0.05, how much will be the equilibrium GDP? b. At that rate how much is budget deficit or surplus? c. By how much GDP will change if govermment cuts tax rate from 1/3 to 0.20 and at the same time the Fed raises the interest rate from 0.05 to 0.06? Now suppose net exports drops by 20. In order to offset its contractionary impact on GDP, Fed decides to lower the rate of interest from 0.05 to 0.04 (just like during Asian crisis). How much is your prediction for a change in GDP? d.

Answer 1

Answe- e gven information .3 3 280 0 了

Assuming γ_o.os 3000-50. 3 The new lar revenue loto

(у 38,56 8110 Ду : aq10-2150