Question
In: Economics
Given an economy described by the following set of equations. Y = C(Y - T) +...
Given an economy described by the following set of equations. Y = C(Y - T) + I(r) + G C = 200 + 0.80(Y - T) I = 300 - 2r G = 400 T = 200 (M/P)d = 0.80Y - 8r Ms = 5,600 Price-level = P = 2 What is the equilibrium interest rate?
(Same setup as above)
Given an economy described by the following set of equations.
Y = C(Y - T) + I(r) + G C = 200 + 0.80(Y - T) I = 300 - 2r G = 400 T = 200 (M/P)d = 0.80Y - 8r Ms = 5,600 Price-level = P = 2
What is the equilibrium level of GDP?
(Same setup as above)
Given an economy described by the following set of equations.
Y = C(Y - T) + I(r) + G C = 200 + 0.80(Y - T) I = 300 - 2r G = 400 T = 200 (M/P)d = 0.80Y - 8r Ms = 5,600 Price-level = P = 2
What is the equilibrium level of consumption?
(Same setup as above)
Given an economy described by the following set of equations.
Y = C(Y - T) + I(r) + G C = 200 + 0.80(Y - T) I = 300 - 2r G = 400 T = 200 (M/P)d = 0.80Y - 8r Ms = 5,600 Price-level = P = 2
What is the equilibrium level of investment?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
An economy is described by the following equations: C = 40 + 0.8 (Y – T)...
An economy is described by the following equations:
C
= 40 + 0.8 (Y –
T)
I
= 70
G
= 120
NX
= 10
T
= 150
a. When Y = 600, aggregate expenditure is .
b. Consumers and businesses alike become more pessimistic about the
future and reduce their respective expenditures by 10 each.
Immediately following this change, what is aggregate expenditure if
Y is still 600? (In other words, what is the initial change in
aggregate expenditure?)...
An economy is described by the following equations: C = 3000 + 0.5 (Y – T)...
An
economy is described by the following equations: C = 3000 + 0.5 (Y
– T)
Ip =
1500
G =
2500
NX =
200 T = 2000 Y* = 12000
a. For
the economy, find the following: autonomous expenditure, the
multiplier, short- run equilibrium output, and the output gap if
any.
b.
Illustrate this economy’s short-run equilibrium on a
Keynesian-cross diagram.
c.
Calculate the amount by which autonomous expenditure would have to
change to eliminate the output gap if...
An economy is described by the following equations: C = 100 + 0.8 (Y – T)...
An economy is described by the following equations:
C
= 100 + 0.8 (Y – T)
I
p
= 80
G
= 140
NX
= 20
T
= 170
Y*
= 980
The multiplier in this economy is 5.
a. Find a numerical equation relating planned aggregate expenditure
to output.
Instruction: Enter your response for mpc rounded
to one decimal place.
PAE = + Y.
b. Construct a table to find the value of short-run equilibrium
output.
Instruction: If you...
A small open Economy is described by the following equations: C= 50 + 0.75(Y – T),...
A small open Economy is described by the following
equations:
C= 50 + 0.75(Y – T), I = 200-20r,
NX = 200-e, M/P = Y-40r, G= 200, T = 200, M = 3,000, P = 3,
and r* = 5
A. Drive the IS* and LM* equations
B. Calculate the equilibrium Exchange Rate, level of income, and
net exports
C. Assume a floating exchange rate, calculate what happens to
exchange rate , the level of income, net exports, and money...
Exercise: A small open economy is described by the following equations: C = 50 + .75(Y-T)...
Exercise:
A small open economy is described by the following
equations:
C = 50 + .75(Y-T)
I = 200 – 20r
NX = 200 – 50e
MD = Y – 40r
G = 200, T = 200, M = 3000, r* = 5
a. Derive the IS* and LM* functions;
b. Based on a, graph the IS* and LM* curves.
c. Calculate the equilibrium exchange rate e*, output/income
Y*.
d. Suppose G increases to 250, redo a, b, c.
Consider an economy described by the following equations: Y = C + I + G Y...
Consider an economy described by the following equations:
Y = C + I + G
Y = 5000
G = 1000
T = 1000
C = 250 + .75 (Y - T)
I = 1000 - 50r
a. In this economy, compute private saving, public saving, and
national saving
b. Find the equilibrium interest rate
c. Now suppose that G rises to 1250. Compute private saving, public
saving, and national saving
d. Find the new equilibrium interest rate.
Consider an economy described by the following equations: Y = C + I + G +...
Consider an economy described by the following equations: Y = C
+ I + G + NX Y = 8,100 G = 2,300 T = 2,100 C = 500 + 2/3 (Y – T) I
= 900 – 50r NX = 1,500 – 250e r = r* = 8.
a. (4 points) In this economy, solve for private saving, public
saving, national saving, investment, the trade balance, and the
equilibrium exchange rate.
b. (3 points) Suppose now that G is...
Consider an economy described by the following equations Y = C + I + G Y=4,000...
Consider an economy described by the following equations Y = C +
I + G Y=4,000 G= 1,000 T=800 C =400 + 0.75(Y–T) I = 1,000–50r(a)
For this economy, compute the following [1.5 Points each; 6 Points
total]1. Private Savings2. Public Savings3. National Savings4.
Equilibrium interest rate
(b) Is this economy running a budget surplus, budget
deficit or a balanced budget? Explain.
[2 Points]
(c) Suppose that
Congress
decides to reduce government spending.
The new level of government spending is...
Consider the economy described by the following equations: Y = 2400; C = 100 + 0.75(Y...
Consider the economy described by the following equations:
Y = 2400;
C = 100 + 0.75(Y – T) –
10r;
I = 450 – 15r;
G = 250;
NX = 0;
T = 0;
Use the information above to calculate an expression (equation)
for national saving S as a function of the real interest
rate r.
Calculate the goods market equilibrium real interest rate, and
levels of desired national saving and investment, and
consumption.
Calculate government (or public) saving. Comment...
Consider a classical economy described by the following equations Y = C + I + G...
Consider a classical economy described by the following
equations
Y = C + I + G
Y = 6000
G = 1200
T = 0
C = 3600 – 2000 r + 0.1 Y
I = 1200 – 4000 r
a. Develop an equation relating national savings to r and y.
(Hint solve for private savings and then public savings)
b. Find the real rates interest that clears the good market.
c. Suppose government produces rises to 1440. How does...
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