Question
In: Economics
: Consider a simple economy with only two sectors with consumption and government. Show how a...
: Consider a simple economy with only two sectors with consumption and government. Show how a balanced budget results. Explain your working and answer in words
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Consider an economy with two sectors: agriculture and production of computers. There are two factors used...
Consider an economy with two sectors: agriculture and production
of computers. There are two factors used in the production of both
industries: labor, mobile between the industries, land specific to
agricultural production and capital specific to the production of
computers. This economy is involved in international trade and
workers spend most of their earnings on computers. Now assume that
the world price of agricultural products increases and the price of
computers does not change, then
A.Both nominal and real wages...
Consider an economy with two sectors: agriculture and production of fidget spinners. There are two factors...
Consider an economy with two sectors: agriculture and production
of fidget spinners. There are two factors used in the production of
both industries: labor, mobile between the industries, land
specific to agricultural production and capital specific to the
production of fidget spinners. This economy is involved
international trade andworkers spend most of their earnings on
agricultural products. Now assume that the world price of
agricultural products decreases and price of fidget spinners does
not change, then
A. Nominal wage of...
Consider a two-period, small, open, endowment economy without investment and government expenditures, but with durable consumption...
Consider a two-period, small, open, endowment economy without
investment and government expenditures, but with durable
consumption goods. Purchases of durable consumption goods in period
1, denoted C1, continue to provide utility in period 2. The utility
of households in period 2 depends on purchases of durable
consumption goods in period 2 , denoted C2, and on the
un-depreciated stock of durables purchased in period 1. Durable
consumption goods are assumed to depreciate at the rate δ ∈ [0, 1].
Household...
consider a simple economy that produces only two products: A, B. GOOD A GOOD B Price...
consider a simple economy that produces only two
products: A, B.
GOOD A
GOOD B
Price
Quantity
Price
Quantity
2015
20
500
30
500
2016
50
1000
40
500
2017
50
1000
50
1000
Compute nominal GDP, real GDP, and the GDP deflator for
each year, using 2018 as the base year.
1. Consider an economy with no international trade, no government spending and no taxes, whose consumption...
1. Consider an economy with no international trade, no
government spending and no taxes, whose consumption function and
investment function are given by the following equations: C =
100,000 + .92Y I = 40,000
a. What is the equilibrium level of aggregate output for this
economy?
b. What is the saving function for this economy?
c. Check the solution, as we did in class, by showing that at
the equilibrium level of Y total spending exactly matches the level
of...
Consider the following equations that describe a closed economy with no government. Assume consumption is represented...
Consider the following equations that describe a closed economy
with no government. Assume consumption is represented by the
following: C = 200 + 0.9Y. Also assume that planned investment (I)
equals 300.
Obtain the saving function for this economy. What are the
marginal propensity to save (MPS) and marginal propensity to
consume (MPC)?
Write the equation for the planned aggregate expenditure.
Find the equilibrium level of output and calculate the level of
consumption and saving that occurs at the equilibrium...
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations: L m = 320 − 8 Wm ,L s = 150 − 4 W s
where L is labor (in number of workers), W is the wage (in
dollars), and the subscripts denote the sectors. The economy has
248 workers who are willing and able to work in either sector. If a
minimum wage of $25 is imposed in...
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations:
??=1321–20??
??=1204–22??
where L is labor (in number of workers), W is
the wage (in pesos), and the subscripts denote the sector. The
economy has 500 workers who are willing and able to work in either
sector.
Since the number of workers employed cannot be
fractions and must be whole numbers, round answers for the values
of employment to...
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations:
Lm = 400 –
12Wm
Ls = 200 –
8Ws
where L is labor (in number of
workers), W is wage (in dollars), and the scripts denote the
sectors. The economy has 200 workers who are willing and able to
work in either sector.
If workers are free to move between sectors, what relationship
will there be between Wm...
Consider an economy with two sectors: manufacturing and services. Demand for labor in manufacturing and services...
Consider an economy with two sectors: manufacturing and
services. Demand for labor in manufacturing and services are
described by these equations:
Lm=200-6Wm
Ls=100-4Ws
where L is labor (in number of workers), W is
the wage (in dollars), and the subscripts denote the sectors. The
economy has 100 workers who are willing and able to work in either
sector.
If workers are free to move between sectors, what relationship
will there be between Wm and
Ws?
Suppose that the condition in...
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