Suppose the marginal product of capital is MPK=2-0.001K, the capital stock depreciates at 20% rate, the tax rate on revenues is 20% and price of capital is assumned to be 1. Furthermore, the economy has full- employment level of output of 5000, government purchases are 1000. Desired consumption is given by C^d=3000- 2000r+0.1Y, where Y is output and r is expected real interest rate. Initial level of capital is 100O. Refer to Scenario 2. What is goods market clearing real interest rate? A)r=13.84 B)r=15% C)r=2% D)r=16%
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- Scenario 2Suppose the marginal product of capital is MPK=2-0.001K, the capital stock depreciates at 20% rate, the tax rate on revenues is 20% and price of capital is assumned to be 1. Furthermore, the economy has full-employment level of output of 5000, government purchases are 1000. Desired consumption is given by C^d=3000-2000r+0.1Y, where Y is output and r is expected real interest rate. Initial level of capital is 1000.Refer to Scenario 2. what is the expression for desired gross investment ? A) I^d=950-1250r B)I^d=950+1250r C)I^d=1750-1250r D)I^d=1950-1250r.Scenario 2Suppose the marginal product of capital is MPK=2-0.001K, the capital stock depreciates at 20% rate, the tax rate on revenues is 20% and price of capital is assumned to be 1. Furthermore, the economy has full-employment level of output of 5000, government purchases are 1000. Desired consumption is given by C^d=3000-2000r+0.1Y, where Y is output and r is expected real interest rate. Initial level of capital is 1000. Refer to Scenario 2. What is goods market clearing real interest rate? A)r=13.84 B)r=15% C)r=2% D)r=16%Please no written by hand solutions 14)An economy has full-employment output of 5000. Government purchases are 1000Desired consumption and desired investment are given by C ^ d = 3000 - 2000r + 0.1Y I ^ d = 1000 - 4000r where Y is output and r is the expected real interest rate(a) Find the real interest rate that clears the goods market. Assume that output equals full- employment output. (b) Calculate the amount of saving, investment, and consumption in equilibrium. (c) If a shock to wealth causes desired consumption to decline by 200 (so that the new equation for desired consumption is C ^ d = 2800 - 2000r + 0.1Y ). find the equilibrium real interest rate, saving, investment, and consumption.
- When we add depreciation to net investment, we arrive at............... what is the answer, we arrive at gross depreciation or gross investment? Step 1 Depreciation: The term depreciation refers to the fall in the monetary value of a commodity over the time period due to the use of the commodity. During the use of commodity, normal wear and tear, and obsolescence is the measure reason for the depreciation of the commodity. Step 2 Gross Investment Is the answer. The gross investment is the investment that encompasses the net investment and depreciation. If the depreciation is removed from the gross investment then the remaining investment will be the net investment. Similarly, if we add the depreciation with the net depreciation then the resulting investment amount will be the gross investment. Gross Investment = Net Investment + Depreciation Step 3 Answer. Gross depreciation.What are the equilibrium effects of an increase in the depreciation rate? Explain using the two period model with consumption - saving as well as labor - leisure choice. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Find the NDP from given data. GNP at MP $ 97503, net rector income from abroad $-201, net indirect of fixed capital $10576, consumption of fixed caoicap $5699
- ) Consider the following closed economy SImodel set upY = 18000C = 300 + 0.8(Y − 2500)I = 3500 − 400(r)G = 3000T = 2500(a) Compute the impact on r and I, if Gincreases by 500.(b) Compute the impact on r and I, if Gincreases by 500.(c) Compute the impact on r and I, if bothG and T increase by 500.Define the term the NPW of the project?The equation for the marginal productivity of capital is given by: Real Interest Rate (%) 22.5- MPK : = 1,000 - 1OK 20.0- The price of a unit of capital is 2,000. The rate of depreciation is: 10% per year. The real rate of interest is: 15% per year. 17.5- If the existing level of capital K, is equal to 50 units, what is the level of gross investment? 15.0- I4 = 5 (enter your answer rounded to one decimal place). 12.5- If the real interest rate changes to 5%, what will be the new level of investment (holding the rate of depreciation, the price of capital, the amount of 10.0- existing capital and MPK constant)? 7.5- I'; = |(enter your answer rounded to one decimal place). 5.0- 2.5- 0.0+ 0.0 10.0 20.0 30.0 40.0 50.0 Investment (units)
- 3 Jlgw ?Provide 2 situations why diminishing return could happen in AlbaAnna has an income of $1000 this year, and she expects an income of $2500next year. She can borrow and lend money at an interest rate of 10%.Consumption goods cost $1 per unit this year and there is no inflation. What is the net present value of Anna’s endowment?Economics Question