Given the condition for equilibrium national income Y = E, and the expenditure equation E=C, where C=Co+by: (a) Describe the constants Co and b. Are there any restrictions on the range of values which b can assume? (b) Find an expression for the equilibrium level of income (the reduced form). (c) Deduce how the equilibrium level of income changes as: (i) b increases. (ii) b decreases.
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- == 2. Consider an IS/LM model of an economy with the following equations:C = 300+ 0.6Ydl 100 5iG 200TR = 200T 200T = 0.1YL = 0.4Y 30iM/P = 500(a) Using the above data, derive the equation for the IS schedule. (b) In this example, what is the equation for the LM schedule? (c) Using simultaneous equations calculate the equilibrium level of income and interestrates. Sketch the IS/LM equilibrium position. (d) What are the values of the monetary policy multipliers with respect to income andinterest rates? If the money supply is increased by 30, what are the new market clearing income and interest rate levels?Assume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?An economists estimate the govermment expenditure multipller to be Mgov-1.25. The current value of GDP is $15.18 trillion and the government is planning to increase spending by $800 billion (all in one year), the percentage increase in GDP using the multipler estimate of the economist is: 6.59% O 4.25% 5.75% 3.16%
- Given the following model of an Economy as follows:- (10 marks) C = 50 + 0.7 Yd (Yd = Y-T) (Consumption & Expend) I = 100 (Investment Expend) X = 20 (Exports ) M = 10 – 0.27 (Imports) T=25 interepret the consumption Function i) Determine Equilibrium level of National Income ii) Consumption level at Equilibrium level of Income iii) Total import at equilibrium IncomeWhat is the formulae to find Increase in sales?Solve for the MPK, assuming that the MPL in the production of smartphones is 50 per smartphone per hour and the MRTS is ¼.
- . Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y Identify endogenous variables Find the equilibrium national income Find equilibrium consumption(using static equilibrium & matrix algebra both)please assist Which of the following represent injections into the circular flow of income (2) and spending?(a) Exports and investment;(b) Government spending and imports;(c) Government spending and saving; (d) Imports and saving.In the circular-flow diagram, the goods markets are where: (2) (a) The households purchase goods from firms;(b) Firms purchase goods from government;(c) Firms purchase goods from households;(d) The government purchases goods from households.Money overcomes the problem of a double coincidence of wants inherent in (2) the barter system through its function as a:(a) unit of account.(b) store of value.(c) medium of exchange.(d) standard of deferred payment.(a) precautionary; interest rates (b) transactions; national income (c) speculative; interest rates(d) precautionary; national income Multiple-choice questions: Select one correct answer for each of the following. In your answer booklet, write…The question is an expenditure minimization question. The answer should be very detailed and clear, THANK YOU!!!
- 7. We ran a Vector-autoregresive model with two variables: with dtrade (change in trade balance), doilpr (change in oilpr) with one-lag and the result is as follows: dtrade 1st Lag of Trade Balance 1st Lag of Oil Price doilpr 1st Lag of Trade Balance 1st Lag of Oil Price Coef 0.48 275 0.04 1291 0.02 2939 0.35 7591 Std. Err 0.04 2789 0.02 1304 0.09 2198 0.04 5904 Z- statistic 11. 28 1.9 4 0.2 5 7.7 9 P>| zl 0 0.0 53 0.8 04 0 a) What can you infer from the result? b) Can you say anything about the long-run equilibrium value for change in trade- balance given the result?Solve for (i) Equilibrium income and (ii) Income-expenditure multiplier for GYear GDP Disposable Income Consumption Imports 2036 $1050 $840 $830 $111 What is the marginal propensity to import? 2037 $1000 $800 $800 $100 Round to two decimal places. If your answer is 0.064 (i.e., 6.4%) enter .06. If your answer is 0.065 (i.e., 6.5%) enter .07. Do not forget to enter the negative sign, if appropriate.