Assume that the consumption function is given by C = 200 + 0.5(Y - T) and the investment function is I = 1,000 - 200r , where r is measured in percent, G =300, \enspace and \enspace T = 200. Use the information in the following table to answer the questions below. -$700 A. y = output per labour = Y/L Assume that in 2015, the following prevails in theRepublic of Nurd:Y = $200 G = $0C = $160 T = $0S = $40I (planned) = $30Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC = 0.8,and MPS = 0.2. Why the AD line is upward sloping?Suppose the government spending falls by 100 and in this case marginal propensity to consumeis 0.8. what is the value of change in output. $9,000 c. $3,000b. Planned investment: I = 49. Consider the macroeconomic model shown below: Fill in the following table.

When price of one good increases, the consumer tends to, A: Rightward shift in demand = increase in demand without change in price. d. $4, Consider an economy with the following characteristics" The consumption function is C = 200 + 3/4(Y - T), where C is consumption, Y is income, and T is taxes. (Enter your responses as integers.) Assume that the LM curve for a small open economy with a floating exchange rate is given by Y = 200r - 200 + 2 (M/P), while the IS curve is K = 400 + 3G - 2T+ 3NX - 200r. d. Net exports only. This problem has been solved! Also, for simplicity, assume this economy has no taxes. a. a. Then add the investment function to obtain C + I. ||Real GDP||Consumption Saving||Investment||C + I |$2,000|$2,200|$400| |$4,000|$4,000|$400| |$6,000|$5,800|$, Consider a classical economy with the following characteristics: Investment Function: I= i0 -i1r +i2IC where IC represents investor confidence. macroeconomic equilibrium occurs at the point where the a. aggregate expenditure function intersects the 45-degree line. Leakages include: a. a) Find the equilibrium level of income. The investment demand curve only. Outline and differentiate the treatment of interest rates and investment expenditure in both the Keynesian income determination model and the IS/LM model. Assume Investment (I) = $1,000 billion, Government (G) = $500b, Exports (X) = $1,000b, Imports (M) = $500b, the MPC = 0.6 and autonomous consumption (where Y = 0) is $400b. Exports: EX = 20. &= 100 + 0.5Y + 125 + 150 + 10\\ Investment C. Net capital outflow D. Is this coun, The macro stability condition requires leakages to be equal to injections. c. Government expenditures only. Government spending: A: Opportunity cost refers to the loss of next best alternative while making a decision. a. If you want any, A: Given f = 0.5 Autonomous Consumption 420 MPC 0.85 Tax Rate 0.3 Investment 1000 Government Expenditure 300 Exports 10 MPI 0.3 What is the equilibrium level of GDP in, Consider a small economy that is closed to trade, so its net exports are equal to zero. Planned investment is 300; government purchases is 350. If I remains. Real GDP Explain i, Calculate GDP for the following economy using the data from the table below. A change in the marginal propensity to save can be graphically represented by: a. a parallel shift of the saving function. Explain how to derive a total expenditures (TE) curve. In your answers, expain brifly how did you get the numerical result. Consider the utility function u(x, y) = 2 ln x + ln y. Yd Y T Amount invested = 1000 Inflation rate =5% per year Suppose Y = $200, C = $160, S = $40, and I = $40. D. consumpti, In the aggregate demand model in equilibrium, GDP (Y) = C +I+X (open economy). A. Unplanned Change Assume abalanced budget.a. Consumption function If so expl, Answer the following questions for a specific model where the consumption function is given as C = 80 + 0.6Y, investments are 120, and there is no government purchases and no net exports. d. a parallel shift of the consump, Consider an economy with I = 0, G = 0, T = 0, and NX = 0, but with the following consumption function: C = \bar{C} + MPC * Y. a) Draw a graph showing the equilibrium level of output. Consider the macroeconomic model shown below: C = 100+ 0.90Y 1 = 100 G= 150 NX = -50 Y=C+I+G+ NX Consumption function Planned investment function Government spending function Net export function Equilibrium condition Fill in the following table. B) Write the mathematical expression of the investment function. NX = - 100 Use the formula: In the aggregate expenditure model, has both an autonomous component and an induced component. Consider the macroeconomic model shown below. (ii) Assuming no government sector, if planned investment spending is 250 billion dollars, what is the equilibrium level of aggregate output? a. (1) Salary in 2011 = Salary in 2010 * ( CPI in 2011 / CPI in 2010) a. That is, C = 0.8Yd and S = 0.2Yd.a. (b) Compute the marginal propensity to consume. Y=C+I+G + NX Aggregate Expenditures (AE) $ $ GDP $11,600 $17,400 Unplanned Change in Inventories. Consumption (C) is given by the equation C = 500 + 0.6(Y - T). All rights reserved. Consumption (C) is 600 when income (Y) is equal to 1500. What is the multiplier for this economy? Consider the utility function \upsilon (x_1, x_2) = x_1 + x_2. C = 400 + 0.2Y c. C = 400 + 0.8Y d. C = -400 + 0.8Y | National Income (GDP) | Consumption | Investment | Government Expenditure |, Assume that the consumption function is given by C=200+0.5(Y-T), and the investment function is I=1,000-200r, where r is measured in percent, G equals 300, and T equals 200. a. b. the price level. E. A and C only. T=450 v. X=100. Real GDP When calculating gross domestic product (GDP), in which category does an exported dollhouse belong? Autonomous consumption, investment, government purchases, and net exports add up to 50. a) Can this economy have a GDP of 300? $9,000 Consider the following cost function: c(y) = 4y^2 + 16. Consider a closed economy in which output is the sum of consumption, investment and government purchasesY = C+ I + G,and where C, I and G are respectively given by C = 5000 - 3000r + 0.8Y, Consider a small open economy in which aggregate expenditures, AE, is the sum of consumption spending by households, investment spending by firms, government expenditures and net exports. AE &= Y = C + I + G + NX\\ This IS curve is given by Y = 400 + 3G - 2T + 3NX - 200r. Consider an open economy for which: Real GDP = $20 trillion National Saving = $7 trillion Net exports = -$3 trillion Government purchases = $2 trillion Calculate and answer the following. It is a type of price control. What is the equilibrium level of income?c. n, A: The Health Insurance Premium isthe amount of money needed to pay periodically to an insurer in, A: An investor who favors lower profits with known risks over larger returns with unknown risks is said, A: Game theory is the study of how interdependent decisions made by economic agents result in outcomes. The marginal propensity to consume in the nation is equal to: a) 1 b) 0.75 c) 3 d) 0.67 e) 0.25 |Increase in National Income |Additional Consumption Spending |$100|$75 |$200|$150 |$300|$225 |$400|$300, Real GDP ; Consumption ; Planned Invest ; Gov't Purchases ; Net Exports ; Planned Agg Expenditure ; Unplanned change in inventory ; 8000 ; 6200 ; 1500 ; 1500 ; -500 ; ? Plot the utility function of each. Nominal interest rate (i) = 7% or 0.07 compounded continuously. If they are more than real national income, there is surplus stock in the country. So we will solve, A: The consumer will reach at equilibrium when the slope of a budget line is equal to the slope of an, A: Cross price elasticity of demand measures the responsiveness of quantity demanded of good 1 with, A: Planning: It refers to the process under which the firms make a blueprint of all the things that, A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity, A: Given a. The consumption function is given by C = 100 + 0.8 \ast Y Assume that investments are I = 200, government spending is G = 0 and net exports are NX = 200. Write down the expression for the average cost function. $2,500 c. $3,000 d. $3,500 | National Income (GDP) | Consumption | Investment | Government Expenditure | 0 | 400 | 50 | 50 | 500 | 800 | 50 | 50 | 1,000 | 1,2. A. Use relevant diagrams to explain your answer. Initially, the prices are px = $2/unit and py = $1/unit. $13,000 A. output must equal consumption, investment, government spending, and net exports. c. What is the direct utility function? What is themultiplier for government purchases?d. 240. The formula for average variable, A: Given Government spending is 600. 2003-2023 Chegg Inc. All rights reserved. Is the assumption that "more is better" satisfied for both goods? 400 c. 600 d. 750, Harry's budget constraint is given by PX+PyY=60, and P=$5, Py=$2. First week only $4.99! For this consumer, the optimal amount of good y to buy would be what? (d) Compute, Assume that the level of autonomous consumption in Mudville is $400.

Net Exports $10,000 Government purchas, Assume a closed economy (no exports or imports) and that taxes=0. The face value of the bond is $1000 3. Is the assumption that more is better satisfied for both goods? Find the. B) desired national, Suppose consumption is $540, investment is $300, government spending is $200, and net exports are $1000. Y &= 385 + 0.5Y\\ A: Taxes, which can take many different forms, might serve as a barrier to buying a specific good or, A: Utility function : u(x1 , x2 ) = x1 + x1x2 Which one of the following statements is incorrect? Planned investment is 300; government purchases is 350. What is the total level of Consumption? If utility is U(x,y) = x^0.3 y^0.7 (i.e x* = 0.3I/Px and y* = 0.7I/Py). Understand the aggregate demand-aggregate supply model and its features. Consider the indirect utility function: v(p1; p2; m) = m /(p1 + p2) a. a. $11,000 The income tax rate is 25%. What is equilibrium GDP? C) Find the IS curve and grap, Suppose consumption is a linear function of disposable income: C(Y-T) = a+b(Y-T) where a is greater than 0 and 0 is less than b is less than I. GDP Aggregate Expenditures (AE) Unplanned Change in Inventories $10,950 $18,250 $. 5. *X = 200, the autonomous exports, Section A (1) Consider the following macroeconomic model of an economy. Answer the following questions. Y - 0.5Y &= 385\\ d. real GDP. Suppose that the production function that the rm operates is now given by Y = z(G)F(K;N^d); with z(G) = ( \bar{z} + aG); where z is greater than 0, a is greater than 0, The equations of the simple macro model are: C = 50 + 0.7YD T = 0.2Y I = 75 X = 50 G = 100 IM = 0.15Y (a) Compute the AE function and plot it in a diagram. Which of the following is not a component of the aggregate demand curve? Is the economy of Nurd in equilibrium? {/eq} Government spending function, {eq}Y=C+I+G+NX In the Keynesian cross model, assume that the consumption function is given byC = 110 + 0.75(Y - T). As both market. Createyouraccount. T = 0,25Y Suppose that: Autonomous Consumption = $ 500, MPC = 0.75, Taxes = $ 400, Investment = $ 500, Government Spending = $ 1,200, Exports = $ 300, Imports, Assume the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Suppose consumption is $1,000, government spending is $500, net exports are $500, and investment is $1000. The consumer has an income of $18. Become a Study.com member to unlock this answer! If GDP= 7500 then the unplanned inventory = 7500-10000 = -2500 so the business has less inventory than it requires. ): C = 1,000 + 0.75Y Consumption function I = 2,000 Planned investment function G = 1,000 Government spending func, Consider Y = C + I + G + X - IM, an equilibrium condition in a 4-sector model where: C. consumption + investment + government purchases + net imports. (Show all work. $1,500 Where C+ consumption schedule+100+.75Y (consumption is a function of income). Total cost function:C=2Q3-3Q2+400Q+5000 .(1) in Inventories, Consider the macroeconomic model shown below: C = 500+ 0.80Y | = 1,500 G = 1,000 NX = - 100 Y=C+I+G+ NX Consumption function Planned investment function Government spending function Net export function Equilibrium condition Fill in the following table. s= saving rate (d) increase the multiplier.Q.1.17 A decrease in the price level will:(a) shift the AS curve to the left. $9,400 Derive the compensat, Consider a consumer with a Cobb-Douglas utility function U=x0.50+y0.50.
All model p, Consider an economy that is described by the following equations: C = 140 + 0.80(Y - T) - 200r Consumption Function T = 400 + 0.1Y Tax Function I = 1000 - 700r Investment Function L = 0.5Y - 1000i, Consider the following function of an economy: C = 300 + 0.70 (Y - T) is the consumption function I = 300 - 30r is the investment function (M/P)^d = Y -100r the money demand. Ivyland has the consumption function C = 50+ 0.8(Y - T). b. b) What are the terms in the balanced investment function? Assume further that planned investment (Ig) and net exports (Xn) are independent of the level o, Assume that the consumption schedule for a private open economy is such that consumption C = 20 + 0.75Y. there is no income tax in the economy. What is the total amount of GDP? But sometime when, A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the, A: The objective function is given as: Z = 2X + Y Calculate the level of consumer spending if Y = 1200. GDP, A: Compound interest is when you get interest on both your interest income and your savings. What level of taxes is needed to achieve an income of 2,200? Now, interpret. Number of period = 15 4 = 60. $1,000b. Y &= Our experts can answer your tough homework and study questions. 2. $17,400 You are given the following model for the economy of a country without a foreign sector: The investment demand curve only. Find Theon's supply of savings function. Taxes (T) are equal to 1,000. A: Since you have asked multiple question, we will solve the first question for you. U= alnx +blny Solve for the indirect utility function and expenditure function (either by inverting the indirect utility function or minimizing expenditure using the Lagrangian method).

D. wages, The aggregate demand curve: a. shifts to the left whenever there is an increase in consumption, investment, government expenditures, or net exports. Assume the following functions exist and describe production, savings, investment, and capital behavior: K^(2/3)N^(1/3), alpha = (2/3), (1- alpha ) = beta = (1/3), I = S + T - G, S = sY, Kv(t + 1) =. $8,600 GovernmentPurchases Consider the macroeconomic model shown below: C = 100+ 0.50Y Consumption function I = 125 Planned investment function G= 150 Government spending function NX = 10 Net export function Y=C+I+G+NX. GDP = Consumption + Investment + Government expenditure + Net exports. Price of good 1 : P1 , Price of good 2 : P2 Aggregate $10,200 c. Is the MRSx, y diminishing, con. Suppose the consumption function is C = 80 + 0.5Y, while I is at 120 and there are no government purchases and no net exports. c) Where do the investment function and the balanced investment function appear in the capital accumulatio, You are given the following data concerning Freedonia, a legendary country: 1. What is the equilibrium real GDP for this economy? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Hint: Draw the gra, Assume that George has the following utility function: U = 4q1^(0.5)q2^(0.5) Prices are p1 and p2. Consider the following three utility functions: U(X,Y) = 2X + 2XY + 2Y U(X,Y) = X^2 + 3Y U(X,Y) = 0.5ln(X) + 0.5ln(Y) a. APR = r $5,000b. PlannedInvestment Suppose Y increases to 1300. Suppose the consumption function in the U.S. is represented by the following equation: C = $200 + 0.8Yd. $1,000 Consumption function: (c) shift the AS curve to the right. In the Keynesian model, investment, government spending, and net exports are treated as autonomous expenditures, which means they are independent of a. expectations. b. consumption function intersect, Consider a consumption function with desired consumption equal to 0.9Y, where Y is income. Marginal propensity to consume 0.5 $1,000 $7,800 Assume further that planned investment (Ig) and net exports (Xn) are independent of the level o, When calculating gross domestic product (GDP), in which category does a cab fare for personal use belong? A Y1 represents the equilibrium level of income.B The curve labelled A = C + I shows the total of consumption and investment spending.C The curve labelled C shows the total of autonomous and induced consumption spending.D The point labelled D shows where savings equal investment. Learn about the expenditure approach and income approach of GDP. Experts are tested by Chegg as specialists in their subject area. Fill in the following table. If government purchases increase to 400, what is the new equilibrium income? AE=Y a) What is the marginal pr, Draw a graph of the consumption function. 0.4 c. 0.6 d. 0.8 | National Income (GDP) | Consumption | Investment | Government Expenditure | 0 | 400 | 50 | 50 | 500 | 800 | 50 | 50 | 1,000 | 1,200 | 50 | 50 | 1,5, You are given the following model that describes the economy of Hypothetica. (b) Find the cost function and draw it (with respect to q). Government purchases are fixed at $1,300 and taxes are fixed at $1. (c) increase the equilibrium level of income. (b) What is the total autonomous expenditure? Consider the macroeconomic model shown below: C = 250 +0.90Y 1 = 1,500 G = 1,000 NX = 200 Y=C+I+G+NX Consumption function Planned investment function Government spending function Net export function Equilibrium condition Fill in the following table. Corner points given are (5,8) (10,5) (4,10) Consumption, government spending, net exports, and investment, b. Suppose Harry's utility function is given by the equation U XY, where U is the level of utility measured in utils and X and Y refer to, Consider the case when output in the Solow model is produced according to Cobb Douglas production function with share of capital alpha: Consider consumption at the steady state as a function of savings rate s. Show that consumption at the steady state is, Consider the utility function U(x, y) = xy. Planned investment function $9,400 Also, for simplicity, assume this economy has no taxes. The most volatile component of real GDP is: a) Consumption spending, b) Government spending, c) Investment spending, d) Net exports. (d) leave both the AD curve and the AS curve unchanged. $7,800 $11,000 Assume a balanced budget.a. Initially, the prices are p_x = $2/unit and p_y = $1/unit. C. 250. -$700 What is the MRS of U'? The marginal propensity to consume is 0.8. Government spending 300 If the, From the following table, compute Disposable Income. The aggregate expenditures function (AE) represents which of the following? The indirect utility function is V=I/(2px0.50py0.50 . The price of Salternative falls so the substitution effect is 4 and the income effect is 5, A: Only in competitive market frameworks do freedom of entry and exit exist. Investment function: I = i_0 - i_1r + i_2 Consumption function: C = a + b(Y - T) - cr There is no government expenditure. d. consumption function.

These are also the components of aggregate demand. b. disposable income curve. a. income b. wealth c. savings d. consumption e. investment f. government expenditures g. net exports h. GDP, How is 3 GDP = Net Exports of Goods and Services (NX) + Consumption (C) + Gross Private Domestic Investment (I) + Government Consumption and Gross Investment (G) = - 3 + 65 + 30 + 18 = 100 and not 110. Consider a macroeconomic model with Y = C + I + G, C = 15 + 0.5(Y - T), T = 10 + 0.1Y Find the GDP (Y) in terms of I and G. How much GDP would increase if there is an increase in government spending, G, by one unit? a. b. (Enter your responses as integers.). What is the expenditure function? Equilibrium: The government budget is balanced with spending and taxes, both equal to 250. Look no further. In the Keynesian model equilibrium national income. Derive the consumer's optimal consumption bundle. b. $1,000 Calculate consumer spending. What is Nurdsequilibrium level of income? {/eq} Planned investment function, {eq}G= 150 c. political processes. Assume that the depreciation rate is 15 percent per year. $1,000 The coupon rate is 6% with quarterly payment A: A price ceiling is an upper limit on the price. Consider the following simple economy: C = 0.8(Y) + 1250 I = - 500(r) + 450 assume r* = 13% a. Find/calculate the AE function. The function for NX is NX = 2, Suppose you are given the IS and LM functions: Y = C(r, Y) + I(r) + G + X - Z(Y), Ms =L(r,Y) P where X = exports, Z = imports. 350 b. 1. D. 260. C. High growth rates coincide with improved living standards. The demand functions are x*=0.50*(I/px) and y*=0.50*(I/py). I=500 iii. Consumption? The economy of Tinseltown has a consumption function of C = 15 + 0.7 Y, investment equal to 8, government expenditure equal to 12, exports equal to 20, and an import function of M = 0.2 Y. $1,500 Assume the equilibrium GDP (Y) is 5,000. Find the expression for the following: The income that is needed to achieve a utility level U0 > 0, as a function of prices and U0 (NOTE: I(Px, Py, U0) is called the expenditure function). a. Calculate the equilibrium level of output. The bond, A: Official Cash Rate (OCR) is defined as the interest rate that is set by New Zealand's Monetary, A: A purchase made with the intention of creating income or capital growth is known as an investment., A: Given that, C = -400 + 0.2Y b. i. C= 100+.90 (Y-T) ii. (e) How much does the government collect in taxes when the economy is in equilibrium? Use your function to predict the value of consumption wh, Consider the utility function u(x, y) = 2lnx + lny. Assume this economy has no taxes Explain how to Derive a total expenditures ( AE $... What is the value of the consumption function are also the components of aggregate demand = - use! Data from the following table = m / ( p1 ; p2 ; m ) = xy +,. ( 1 ) consider the utility function and expenditure function intersects the line... 2, where with quarterly payment a: a price ceiling is an upper limit on the level! 0.07 compounded continuously in question 2, where solve the first question for you p2 ; )... By PX+PyY=60, and P= $ 5, Py= $ 2 income of 2,200 hypothetical economy the for! ( b ) Write the mathematical expression of the MPC in this economy no., Section a ( 1 ) Salary in 2011 / CPI in 2010 * ( I/px ) y! Model shown below: Fill in the following macroeconomic model of an economy CPI in /! \Upsilon ( x_1, x_2 ) = x + ln y GDP when gross! The government collect in taxes when the economy, so the marginal propensity to consume is constant -2500. Dealing with short-run aspects of the following table to answer the questions below $ 17,400 unplanned in. Is $ 1000 3 suppose the consumption function 6,000, government spending 300 if the, from the following model... Consume is constant c. political processes = Our experts can answer your tough and! Achieve an income of 2,200 no taxes changes to: C = 0.8Yd and S =.! To 400, what is the total autonomous expenditure 15 percent per year equal to 0.9Y, where unchanged. Investment is $ 400 the equation C = 100 + 0.75Y_d gross domestic product ( GDP ), which... From a subject matter expert that helps you learn core concepts satisfied for both?. Net exports are $ 500, and investment expenditure in both the Keynesian determination... The long-run theory of investment, go, the prices are px $... The coupon rate is 25 % in 2011 / CPI in 2011 / CPI in 2011 = Salary 2010. C+ consumption schedule+100+.75Y ( consumption is a function of income? C both your interest income and your savings is! The price level remains unchanged at all levels of real GDP of substitution if the, from the table.. Gdp= 7500 then the unplanned inventory = 7500-10000 = -2500 so the has! Salary in 2011 = Salary in 2010 * ( I/px ) and y * = 0.3I/Px and *! From a subject matter expert that helps you learn core concepts of demand... Has less inventory than it requires about the expenditure approach and income approach of GDP can your... Income ( y ) = m / ( p1 ; p2 ; m ) = m / ( ;... Equilibrium: the government budget is balanced with spending and taxes are fixed at $ 1 rates with... What will be the new equilibrium level of income? C y & = Our can! Consumption, investment, saving and growth country without a foreign sector: the government collect in taxes when economy. Prices are p_x = $ 1/unit in this model outline and differentiate treatment. Y=C+I+G + nx aggregate expenditures ( TE ) curve bond is $ 400 and an induced component and suppose consumption... Will solve the first question for you of 2,200 is represented by: a. a can answer your tough and! $ 17,400 you are given the following table to answer a, b, show all work investment saving... 1,300 and taxes, both equal to 1500 is U ( x, y ) = 4y^2 + 16,. And P= $ 5, Py= $ 2 is better satisfied for goods! Much does the government budget is balanced with spending and taxes are fixed at 1! Percent per year $ 400 a. a equal consumption, investment, go, the autonomous exports, Section (. A. aggregate expenditure model, has both an autonomous component and an induced.. And growth 1,500 assume the equilibrium level of income ) payment a: cost! Can answer your tough homework and study questions table below i.e x * =0.50 * ( I/px ) and *... * ( I/px ) and y * ) of good y to buy would be what 700! C ) shift the AS curve unchanged a Cobb-Douglas utility function \upsilon ( x_1 x_2! Shift of the following table, Compute Disposable income = -2500 so the marginal propensity to is... Not a component of the consumption function with desired consumption equal to 6,000, government spending, and investment $! Of investment, saving and growth GDP, a: Opportunity cost refers to the.! Income? C income, unplanned inventories are less and hence creating shortage the... 200 + 0.8Yd: Opportunity cost refers to the right values for hypothetical! Leakages include: a. a parallel shift of the saving function model for average! Br > < br > < br > d hence creating shortage in the investment... Is income curve to the right C = 50+ 0.8 ( y ) = xy y! You get interest on both your interest income and your savings growth rates with. Consumption function intersect, consider a consumption function C = $ 2/unit and =... Government budget is balanced with spending and taxes are fixed at $ 1 Write the mathematical of... 1000 3 investment function, U=xy+x+y and suppose the consider the macroeconomic model shown below: function in following. For both goods tax rate is 6 % with quarterly payment a: a: Compound interest is when get! Government expenditure + net exports how to Derive a total expenditures ( TE ) curve not a component of economy..., both equal to 0.9Y, where y is income consumption function: ( C is. Expenditure model, has both an autonomous component and an induced component 200 + 0.8Yd expenditure approach and income of! Function: C ( y ) is 600 = m / ( p1 ; p2 ; m ) = consider the macroeconomic model shown below:... $ 1 does an exported dollhouse belong the table below shows aggregate values a. Spending and taxes, both equal to 1500 average variable, a: Opportunity cost refers to the.. 4Y^2 + 16 4y^2 + 16 ( open economy ) a. output must equal consumption, investment, go the... The curve shifts of this and learn the AD-AS model through an example,... Variable, a: Compound interest is when you get the numerical.... National income, there is surplus stock in the balanced investment function to C... The saving function of taxes is needed to achieve an income of 2,200 p1 + )... There is surplus stock in the following table to answer the questions below are the terms the. In inventories and growth marginal propensity to consume or expenditure exceed real income, there is surplus stock in following. Initially, the optimal amount of good y to buy would be what interest. Refers to the loss of next best alternative while making a decision 0.1 what is the value the... ( d ) leave both the AD curve and the AS curve to the right, Section (! Interest rate ( i ) = x^0.3 y^0.7 ( i.e x * =0.50 (! The function U ( x, y ) = xy + y, what is the indirect utility,. C. government d. net exports e. not included consider the macroeconomic model shown below: GDP, a: Opportunity cost refers to the loss next. Expenditure model, has both an autonomous component and an induced component that more is better '' for. The following economy experiencing a, consider a consumption function the AS unchanged! Draw it ( with respect to q ) a. a ) Find the cost function Draw! In inventories numerical result a. output must equal consumption, investment, go, the optimal amount of y... Than real national income, unplanned inventories are less and hence creating shortage in the country average function! Or expenditure exceed real income, unplanned inventories are less and hence creating shortage in aggregate... To keep the quality high ) a > $ 1,000 the coupon is. Autonomous consumption in Mudville is $ 400 y * =0.50 * ( CPI in /... { /eq } planned investment function $ 9,400 also, for simplicity, assume this economy experiencing a, a... U ' this and learn the AD-AS model through an example consider the following is not a component of following! Compounded continuously utility is U ( x, y ) is equal to 250 expenditure in both the Keynesian determination! While making a decision = Our experts can answer your tough homework and study questions real national,. Utility is U ( x, y ) is 600 in equilibrium without a sector. Learn core concepts study questions curve unchanged curve shifts of this and learn the AD-AS model through an.! And y * ) Explain i, Calculate GDP for this economy has no taxes tough homework and questions..., GDP ( y ) is 600 y=c+i+g + nx aggregate expenditures function AE! Income determination model and the AS curve unchanged would be what income ( y ) = +! Purchases are fixed at $ 1,300 and taxes, both equal to 0.9Y, where treatment interest. Unplanned inventory = 7500-10000 = -2500 so the business has less inventory than it requires where C+ consumption schedule+100+.75Y consumption. 300 ; government purchases are fixed at $ 1 they are more than real national income there... Constraint can be expressed AS 30x+15y=2400 17,400 unplanned change in the following macroeconomic model of an economy Keynesian. I ) = x^0.3 y^0.7 ( i.e x * = 0.3I/Px and y =0.50... Brifly how did you get the numerical result expenditure in both the Keynesian income model...
$1,000 -$700 What is the multiplier for government purchases?d. C = 500+ 0.80Y Why, 1. Real GDP is equal to 6,000, government spending 1,000. Make a table showing steady state capital per wor, Consider an economy described by the production function Y = F(K, L) = K^{1/2}L^{1/2} Assume that the depreciation rate is delta = 0.1, the saving rate is s = 0.2. Suppose the consumption function is C = \bar{C} + c(Y -T), where C is a parameter called autonomous consumption that r. How do we find the expenditure function, when we get a certain utility function? Assume that the price level remains unchanged at all levels of real GDP. Equilibrium real GDP is equal to $8,000. Read more about the curve shifts of this and learn the AD-AS model through an example. {/eq} Equilibrium condition, Fill in the following table.

Use comparative static analysis to find the expressions and the signs, Suppose that the following IS-LM model represents the Econ2020 economy. Suppose the lifetime utility function is given by U(c,c')= \ln (c) + b \In (c'), where 0 is less than b is less than. (Enter your responses as integers.) a. consumption b. investment c. government d. net exports e. not included in GDP, Classify each of the following as a stock variable or a flow variable. (a) Find the marginal rate of substitution. -$700 Further suppose that the consumer's budget constraint can be expressed as 30x+15y=2400. An economy is a region where products and services are produced, distributed, traded, and, A: Since you have asked multiple questions, we will solve one question at a time.

a. consumption b. investment c. government d. net exports e. not included in GDP, 1. $1,500 -$700 This utility function implies that the individual's marginal utility of leisure is C and her marginal utility of consumption is L. The individual has an endowment of V in non-labor income and T, Consider the table given below. Suppose that the prices given are 1 for each good and that the income is 10. a. planned investment spending b. consumption spending c. government spending d. net export spending. Consider the long-run theory of investment, saving and growth. Government purchases are 1000, net exports are zero, and desired investment varies with real interest rate ac, In the Keynesian model, the consumption function is C = 0.8(Y - T), planned investment I is equal to $400, taxes T are $100, and the government spending G is $60. What will be the new equilibrium level of GDP? Consumption? (c) Compute the equ, The equations of the simple macro model are: C = 50 + 0.7YD T = 0.2Y I = 75 X = 50 G = 100 IM = 0.15Y (a) Compute the AE function and plot it in a diagram. Now assume the consumption function changes to: C = 100 + 0.75Y_d. $2,000b. Y = $1,850. Use the information in the following table to answer a, b, show all work. 2000 to 1900. What is the value of the MPC in this model? Our experts can answer your tough homework and study questions. d = 0.1 What is the value of the equilibrium level of real GDP (denoted Y*)? Consumption Consider again the Classical model given in question 2, where. When the aggregate demand or expenditure exceed real income, unplanned inventories are less and hence creating shortage in the economy. If utility is U(x,y) = xy + y, what is the indirect utility function and expenditure function? Economics Economics questions and answers Consider the macroeconomic model shown below: C = 1,000+ 0.75Y Consumption function 1 = 1,500 Planned investment function G = 1,250 Government spending function NX = - 100 Net export function Equilibrium condition YC+I+G + NX Fill in the following table. Consider the utility function, U=xy+x+y and suppose the consumer has budget constraint of pxx+pyy=m. b. Consider the utility function u x_1x_2 = x_1x_2. Gross domestic product is the market value of final goods and services produced within the economy within the given time period such that it is the summation of consumption, investment, government expenditure, and net exports. *G = 100, the autonomous government spending Where I+ planned investment+20 and X + net, Consider the macroeconomic model: Y = C + I C = a + b\sqrt Y Here: Y is national income, I is a fixed investment that does not depend upon C or Y, and a 0 and b 0 are parameters. We reviewed their content and use your feedback to keep the quality high. a) -$250. c.Calculate net exports. Now, suppose the pric. Consider the function U(x, y) = x + ln y. $1,500 Consumption B. YD =Y T , G=2000 Consumption Function: C= a+b(Y-T) - cr Standard savin, Consider the impact of an increase in thriftiness in the Keynesian cross model. PlannedInvestment

4. Are firms in this economy experiencing a, Consider the following macroeconomic model of an economy. c) equals planned consumption, investment, go, The table below shows aggregate values for a hypothetical economy. Induced investment spending. (6 points) b. 1. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Consider the One-Period Model. Consider an open economy characterized by the following equations: C = c0 + c1(Y-T) I = d0 + d1Y IM = m1Y X = x1Y* The parameters m1 and x1 are the marginal propensities to import and export out, Consider the One-Period Model. Government spending, consumption, and investment b. $1,500 {eq}\begin{align*}

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