Question
In: Economics
Consider IS-LM model. Let the money demand function be left parenthesis M over P right parenthesis...
Consider IS-LM model. Let the money demand function be left parenthesis M over P right parenthesis to the power of d equals 60 minus 20 r plus 4 Y, the consumption function be C equals 12 plus 0.8 left parenthesis Y minus T right parenthesis and the investment function be I equals 30 minus 2 rI where r is the real interest rate in %. Let T denote taxes, G denote government purchases, P denote the price level and M to the power of S denote the money supply. Calculate the following (Round up to TWO decimal places if needed. Enter only numbers) (1) Assume that T = 20, G = 10, P = 3 and M to the power of S= 300. (a) Calculate the equilibrium real interest rate r (b) Calculate income Y (c) Calculate consumption C (d) Calculate investment I
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Consider IS-LM model. Let the money demand function be left parenthesis M over P right parenthesis...
Consider IS-LM model. Let the money demand function be left
parenthesis M over P right parenthesis to the power of d equals 60
minus 20 r plus 4 Y, the consumption function be C equals 12 plus
0.8 left parenthesis Y minus T right parenthesis and the investment
function be I equals 30 minus 2 rI where r is the real interest
rate in %. Let T denote taxes, G denote government purchases, P
denote the price level and M...
Let f left parenthesis x comma y right parenthesis equals cos left parenthesis pi space x...
Let f left parenthesis x comma y right parenthesis equals cos
left parenthesis pi space x right parenthesis plus 3 y squared
minus 6 y. Which of the following are TRUE? Select ALL that apply.
a. f has a saddle point at left parenthesis k comma 1 right
parenthesis whenever k is an odd integer b. f has a saddle point at
left parenthesis k comma 1 right parenthesis whenever k is an even
integer c. f has a local...
Fill in the blanks to complete the following statements. Bold left parenthesis a right parenthesis(a) For...
Fill in the blanks to complete the following statements.
Bold left parenthesis a right
parenthesis(a)
For the shape of the distribution of the sample proportion to
be approximately normal, it is required that
np(1minus−p)greater than or equals≥______.
Bold left parenthesis b right
parenthesis(b)
Suppose the proportion of a population that has a certain
characteristic is
0.10.1.
The mean of the sampling distribution of
ModifyingAbove p with caretp
from this population is
mu Subscript ModifyingAbove p with caretμpequals=______.
(This is a...
Fill in the blanks to complete the following statements. Bold left parenthesis a right parenthesis (a)...
Fill in the blanks to complete the following statements. Bold
left parenthesis a right parenthesis (a) For the shape of the
distribution of the sample proportion to be approximately normal,
it is required that np(1−p) greater than or equals ≥.. Bold left
parenthesis b right parenthesis
(b) Suppose the proportion of a population that has a certain
characteristic is 0.05. The mean of the sampling distribution of p^
from this population p^ with t μ^ p equals =______. . Bold...
A record club has found that the marginal profit, Upper P prime left parenthesis x right...
A record club has found that the marginal profit, Upper P prime
left parenthesis x right parenthesis, in cents, is given by Upper
P prime left parenthesis x right parenthesis equals negative 0.0008
x cubed plus 0.27 x squared plus 55.9 x for x less than or equals
300, where x is the number of members currently enrolled in the
club. Approximate the total profit when 180 members are enrolled by
computing the sum Summation from i equals 1 to...
Express the confidence interval left parenthesis 0.066 comma 0.140 right parenthesis(0.066,0.140) in the form of ModifyingAbove...
Express the confidence interval left parenthesis 0.066 comma
0.140 right parenthesis(0.066,0.140) in the form of ModifyingAbove
p with caret minus Upper E less than p less than ModifyingAbove p
with caret plus Upper Ep−E
In an IS-LM model, if we assume that money demand is completely insensitive to changes in...
In an IS-LM model, if we assume that money demand is completely
insensitive to changes in the interest rate
A.) interest rates cannot be lowered by fiscal policy
B.) fiscal policy can neither change the level of output nor the
composition of GDP
C.) monetary policy can change income
D.) monetary policy is totally ineffective in changing the rate
of interest
E.) the economy cannot be stimulated by fiscal or monetary
policy
(a) Explain why LM curve shift towards the right if demand for money decreases (say due...
(a) Explain why LM curve shift towards the right if demand for
money decreases (say due to decrease in uncertainty).
(b) Every point above the LM curve imply excess supply
of money and income will increase to bring the money market back
into equilibrium. True/false? Explain your answer.
Consider the following economy with: Real Money demand 〖 (M/P)〗^d = – 12 R + 0.38...
Consider the following economy with: Real Money demand 〖
(M/P)〗^d = – 12 R + 0.38 Y Real Money supply (M^s/P)= 4510 Derive
the LM curve Derive the LM curve when the money supply increases by
680. Derive the LM curve when money supply decreases by 12% Compare
the LM curves from a, b and c by graphing them using any graphing
tool (excel preferably). Comment on the differences. Find the value
of money demanded when income Y = 15,000...
Real money demand: (M/p)d = 0.5Y – 7,500r and money supply: Ms = 280, and P...
Real money demand: (M/p)d = 0.5Y – 7,500r and money
supply: Ms = 280, and P =1.
Try to keep decimal fractions (like 0.0667) in the form of simple
fractions (2/30) until calculating your final values for Y, r, and
so forth.
f. Now suppose that government spending
increases by 500 to 700. Summarize the effects of the expansionary
fiscal policy in part f by stating what happened to Y, r, C, I and
the budget balance.
...
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