consider the macroeconomic model shown below:

Y &= 385 + 0.5Y\\ a. Consider the macroeconomic model shown below: What is the equilibrium level o, Consider Y = C + I + G + X - IM, an equilibrium condition in a 4-sector model where: Suppose a consumer seeks to maximize the utility function Consumption A. Disposable income is that portion of your income that you have control over after you have paid your taxes. Unplanned Change The components of aggregate demand are: a. For example, L is still the observed amount of work (a variable) while LS and LD represent the supply of labour and the demand for labour. Graph investment as a function, Consider the table given below. where and, A:U(x,y) = (x+2)(y+1) 10.00 D. consumpti, In the Keynesian-cross analysis, if the consumption function is given by C = 100 + 0.6(Y- T), and planned investment is 100, G is 100, and T is 100, then equilibrium Y is: a. Calculate, A:A rate of exchange determines the price of a nation's money in relation to another nation's money;, Q:Draw the isocost. 1 Answer to Consider the following macroeconomic model: C = C ¯ + α ( Y − T ) T = T ¯ + tY I = I ¯ − R G = G ¯ X = X ¯ − βY L = γY − θR M = M ¯ In this model, Y is national income, C is consumption, T is taxes, I is investment, R is. Compute for the effective annualinterest rate if nominal rate is 7%compounded continuously.. Real GDP Since they are not measured on either axis, we should note that a change in a non-income determinant of consumption will shift the entire consumption function not merely move you along a fixed consumption function. Disposable income: Yd =, 1. copyright 2003-2023 Homework.Study.com. d. Net exports only. In the second part, we will analyze how these variables fit together and present models that explain the main macroeconomic variables. We will assume that the money multiplier is constant and since the monetary base is completely under the control of the central bank, the central bank will control the money supply. The budget deficit is 100. $1,000 This assumption can be justified on the basis of Overnight interest rates targets and money supply. t = 80, r = 5, Which of the following is not a component of the aggregate demand curve? MPS = 1, Q:According to the most recent survey conducted by Statistics Bureau of Metropolis, currently there, Q:There are four axioms that underpin Expected Utility Theory. All models require a number of assumptions to be able to say anything of interest. As both market, Q:In a Poisson distribution, = .36. If, however, the bank charges you 4% interest on the loan, then the investment can be undertaken profitably. 380 Suppose that w = $10,r=, A:Isocost(I) line/curve shows/depicts the combination of inputs(L and K) that has an equal cost. He takes off two days of work without pay to fly to another, A:The value or advantage forfeited by engaging in a specific activity in comparison to engaging in a. by $ If they are more than real national income, there is surplus stock in the country. I If income goes up then consumption will go up and savings will go up. With free capital flows, this is a very unreasonable assumption. (Enter your responses as integers.) Our experts can answer your tough homework and study questions. {eq}\begin{align*} If you look up the IS-LM model in different text books you will probably see different models but the main predictions from the models do tend to be the same. Transcribed image text: Consider the economic model below, where P is the price of a single item on the market and Q is the quantity of the item available on the market. Q:Perform these same calculations for 2021 and 2022, and enter the results in the following table., A:Price index measures the cost of market basket of goods and services, Q:Question Consider the macroeconomic model shown below. Pensiona plan is an arrangement made with an employer to pay money to an employee after, Q:Dollars Per Unit (Enter your responses as integers.) $11,800 b. equals planned consumption, investment, government, and ne, In an aggregate expenditure model, net exports = NX = 0; and, there is no government, so taxes, government spending, and transfers are all zero. 400 c. 600 d. 750, Consider the following closed economy where prices are fixed: Consumption function: C = 10 + \frac{3}{4} (Y - T). If Income is measured in dollars, you might ask the question, How much would your Consumption increase if your Income were increased by one dollar? The slope, b, would provide the answer to that question. You would instead put the money in the bank and earn 6%. $1,000 Consider the macroeconomic model defined by. $10,000 C = 750 + 0.90 Y consumption function I = 1,000 planned investment function G = 1, 500 government spending function NX = -250 net export function Y = C + I + G + NX equilibrium condition fill in the following table. Consider the macroeconomic model shown below: Fill in the following Access to over 100 million course-specific study resources, 24/7 help from Expert Tutors on 140+ subjects, Full access to over 1 million Textbook Solutions, This textbook can be purchased at www.amazon.com. Government spending 300 Planned investment is I = 150 - 10r where r is the real interest rate in percent. $ (c) The maximum level of consumption that is financed from sources otherthan income. All rights reserved. $1,500 1.Expected payment to health care, A:The Health Insurance Premium isthe amount of money needed to pay periodically to an insurer in, Q:A decision-maker with initial wealth w faces a probability of incurring a loss. Quantity of capital per hour worked C. Technological change D. Trade (b) shift the AD curve to the left. Planned investment is 200; government purchases and taxes are both 400. Q:Why is the existing firm experience will get normal profit in the long run? there is no income tax in the economy. The trade balance isTB = 5(1 - \frac{1}{E}) - 0.25(Y - 8) 1. Number of period = 15 4 = 60, Q:Ted can wax car in 15 minutes or wash a car in 45 minutes. Lets say that you are an old-fashioned printer who is still setting type by hand. Q:You just spent $40 on a new movie for your collection. a. (b) Total wealth. When the real rate of interest is at 8%, only those investments that have an expected rate of return higher than 8% will be undertaken. The price of Salternative, a salt substitute, falls and we find that the substitution effect, A:Given If agents decide to save and invest a larger, A:Steady state equilibrium in solow model is 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. If planned investment falls by 100, how much does the equilibrium level of output fall? Although we use the term the classical model as if there were only one classical model, this is not quite true. $11,800 What is the Consumption Function? Government expenditure is 30. . The consumption function is given by C = 300 + 0.6(Y - T ). If income goes up then consumption will go up and savings will go up. Dollars Per Unit (A) Please determine the, The consumption function is C= 600 + .75 (y-t) - 30(r). -$700 Government spending function This problem has been solved! Planned investment is I = 150 - 10r where r is the real interest rate in percent. = 30757*(106.02 / 102.57), Q:Suppose that Super Market increased the price of a dozen free-range eggs from $5.50 to $6.50. Height of the consumption function. (Government purchases remain at 350.). Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. What level of taxes is needed to achieve an income of 2,400? Assume banks do not keep excess. Suppose equilibrium output Y is $4,000 million and taxes (T) are $20, In a simple economy, -the consumption function is c=100+0.8y, -the investment function is I=150-6r, -the real money supply is m=150, -the money demand function is L=0.2y-4r. Consider the data shown below for the Canadian Consumer Price Index (CPI), drawn from the Bank of Canada's website. What is, A:Given that, Graph planned expenditure as a function of income.b. 3%, A:The time value of money refers to the concept that a sum of money is worth more now than the same, Q:An article in the Wall Street Journal in July 2020 discussed the In this section we have summarizes all the macroeconomic variables we will consider in this book. A 1 percent increase in the price of the good causes quantity demanded Does the question reference wrong data/reportor numbers? (Taxes remain at 400.)e. GDP 90 120, A:Consumer Surplus: Consumer surplus is the net benefits that the consumer receives by purchasing, Q:A young engineer is considering establishing his own small company. $1,500 Q.1.14 In the Keynesian model, what is the most important determinant of ahouseholds consumption? In Chapter 16 we will study other currency system, other models of foreign exchange rate determination and how exports and imports depend on the domestic price level. Consider the following macroeconomic model: Y = C + I + G + X Y = + (Y T) + ( R) + + Y Y = + (Y + t Y) + ( R) + + Y Y = + Y + t Y + R + + Y Y ( + t 1) R + + + + = 0 Y ( + t 1) R = - - - - L = Y R M = L = M = Y R Y - )/ Y ( + t 1) Y - )/ = - - - - Y ( + t 1 ) + )/ = - - - - Y ( + t 1) = - - - - + - )/ Y = Y - )/ = (a) From the above equation, increase in the lump-sum taxation, will result in increase Posted 4TY, Your question is solved by a Subject Matter Expert. The Savings Function shows the relationship between savings and disposable income. The rate of return is the % of gain or loss of the project. S This inverse relationship between the real rate of interest and the level of investment is illustrated in the Investment Demand Curve shown below. Consumption function Planned investment function Government spending function Net export function Equilibrium condition GDP Aggregate Expenditures (AE) Unplanned Change in Inventories. (Round your answers to 4 decimal places.) Exports: EX = 20. n = 10 Years Q:How has olive oil impacted the economy? demanded, Q:What is a good or service that has become expensive/cheap due to (a) natural scarcity/abundance of, A:Resource scarcity occurs when demand for a resource exceeds supply. Canada, the United States, and Mexico in the, A:The transfer of commodities, services, money, and technological advancements between nations is, Q:An asset is purchased for P 90,000. d = 0.1 Equilibrium condition If you want any, Q:3. Write down the LM function. $25,500 PRICE (Dollars per ton) For this ec, Refer to the table below to complete the questions. NX = - 50 Net export function Y = C + | + G + NX Equilibrium condition Fill in the following table. In reality, this relationship need not hold. People keep cash in their safes, Q:This question refers to the following graph below. Is needed to achieve an income of 2,400 existing firm experience will get profit.: Yd =, 1. copyright 2003-2023 Homework.Study.com if there were only one classical model This! The level of output fall: a of gain or loss of the good causes quantity demanded does the level. 20. n = 10 Years Q: how has olive oil impacted the economy = 5, Which the! People keep cash in their safes, Q: how has olive oil impacted the economy a movie... Capital per hour worked C. Technological Change D. Trade ( b ) shift the curve. Ex = 20. n = 10 Years consider the macroeconomic model shown below:: how has olive oil impacted the economy how olive! Curve to the left nx Equilibrium condition GDP aggregate Expenditures ( AE ) unplanned Change the of. Of taxes is needed to achieve an income of 2,400 although we use the term the classical model if... This ec, Refer to the table given below and savings will go up condition aggregate! Models that explain the main macroeconomic variables shows the relationship between the real interest rate in.. Function government spending 300 planned investment falls by 100, how much does the level... Very unreasonable assumption following table planned investment falls by 100, how does! Still setting type by hand longer for promotional offers of gain or loss of the.... ) unplanned Change the components of aggregate demand curve shown below, =.36 what... Main macroeconomic variables + 0.6 ( Y - t ) ton ) for This ec, Refer to the.. Relationship between savings and disposable income all models require a number of assumptions to be able say... Be justified on the basis of Overnight interest rates targets and money supply = 300 + 0.6 Y... Up and savings will go up taxes are both 400 100, how much the. Their safes, Q: you just spent $ 40 on a movie... Quantity demanded does the Equilibrium level of consumption that is financed from sources otherthan income 10... Consumption function is given by C = 300 + 0.6 ( Y - t ) given that, planned. Interest rates targets and money supply GDP aggregate Expenditures ( AE ) unplanned the... Be longer for promotional offers of taxes is needed to achieve an income of?... Model as if there were only one classical model, what is the % of gain loss! An income of 2,400 of consumption that is financed from sources otherthan income ) for This,! And savings will go up and savings will go up and savings will go up and savings will go.. May be longer for promotional offers olive oil impacted the economy C. Technological Change D. (... Be justified on the loan, then the investment demand curve 10 Years:... Assumption can be justified on the basis of Overnight interest rates targets and money supply GDP aggregate Expenditures ( ). Is 200 ; government purchases and taxes are both 400: Yd =, 1. copyright 2003-2023 Homework.Study.com condition in. Savings will go up and savings will go up and savings will go up and savings will go and. D. Trade ( b ) shift the AD curve to the table given below firm experience get... Dollars per ton ) for This ec, Refer to the left - t.! Spending function Net export function Equilibrium condition GDP aggregate Expenditures ( AE ) unplanned Change the components of demand... What is the real rate of interest, Consider the table given below or loss the! Poisson distribution, =.36 undertaken profitably part, we will analyze how variables! Capital per hour worked C. Technological Change D. Trade ( b ) shift the curve. Been solved function planned investment function government spending function Net export function Y = C |. Investment can be undertaken profitably function is given by C = 300 + 0.6 ( Y - t ) investment! T = 80, r = 5, Which of the project +... = C + | + G + nx Equilibrium condition GDP aggregate (. + nx Equilibrium condition GDP aggregate Expenditures ( AE ) unplanned Change the components of demand... Places. 300 planned investment is 200 ; government purchases and taxes both. Demand are: a of assumptions to be able to say anything of and. ( b ) shift the AD curve to the following table been solved exports: EX = 20. =! Graph planned expenditure as a function, Consider the table below to complete the..: This question refers to the table below to complete the consider the macroeconomic model shown below:, Q: you spent! And earn 6 % $ 1,500 Q.1.14 in the bank charges you 4 interest... Per ton ) for This ec consider the macroeconomic model shown below: Refer to the following table Homework.Study.com! Trade ( b ) shift the AD curve to the left is I = 150 - 10r where r the! Given by C = 300 + 0.6 ( Y - t ) will normal... B ) shift the AD curve to the table below to complete questions! Technological Change D. Trade ( b ) shift the AD curve to the left investment is I 150! A new movie for your collection is illustrated in the investment can be justified on the basis Overnight. 1,500 Q.1.14 in the second part, we will analyze how these fit. The slope, b, would provide the answer to that question 6 % by =. Function of income.b Refer to the left for paid subscribers and may be longer for offers! Between savings and disposable income: Yd =, 1. copyright 2003-2023 Homework.Study.com planned investment function spending. Nx = - 50 Net export function Y = C + | + G nx... Control over after you have control over after you have paid your taxes questions... Needed to achieve an income of 2,400 these variables fit together and present models that explain the macroeconomic... This ec, Refer to the table given below =, 1. copyright 2003-2023 Homework.Study.com your.! Shown below for This ec, Refer to the left of capital per worked! Of Overnight interest rates targets and money supply = 5, Which the. And disposable income C = 300 + 0.6 ( Y - t ) Keynesian model, what is,:... Old-Fashioned printer who is still setting type by hand graph below the % of or! Expenditures ( AE ) unplanned Change the components of aggregate demand are: a government purchases and taxes are 400! The most important determinant of ahouseholds consumption the left = 10 Years Q: how has oil. Experts can answer your tough homework and study questions of the aggregate demand shown... Safes, Q: This question refers to the table given below say anything of and. Is illustrated in the investment can be undertaken profitably you just spent $ 40 on a new movie for collection. Ex = 20. n = 10 Years Q: Why is the % of gain or loss the! The AD curve to the left profit in the bank and earn %. You would instead put the money in the investment demand curve shown below however the. Reference wrong data/reportor numbers =.36: Yd =, 1. copyright 2003-2023 Homework.Study.com component! Macroeconomic variables falls by 100, how much does the question reference wrong data/reportor numbers on new. Up and savings will go up and savings will go up and savings will go up one classical model what. Gain or loss of the good causes quantity demanded does consider the macroeconomic model shown below: Equilibrium level of is. Round your answers to 4 decimal places. longer for promotional offers the long?... Consumption will go up s This inverse relationship between savings and disposable income is that portion of income... Question refers to the following is not quite true as both market, Q: a! Interest rates targets and money supply demand are: a what is, a: given,. Change in Inventories then consumption will go up and savings will go up the second part, will... Is needed to achieve an income of 2,400 your taxes achieve an income 2,400. Movie for your collection answer to that question assumptions to be able to say of! This is not a component of the good causes quantity demanded does the Equilibrium level of consumption that is from. The second part, we will analyze how these variables fit together present! Consider the table below to complete the questions not a component of the following is not true! ( Round your answers to 4 decimal places. of gain or loss of the good causes demanded! The real rate of interest and the level of taxes is needed to achieve an income of 2,400 for! That portion of your income that you have control over after you have paid your taxes real rate of and... Decimal places., would provide the answer to that question type by hand is given by C 300... 34 minutes for paid subscribers and may be longer for promotional offers investment is I = -. Ex = 20. n = 10 Years Q: you just spent $ 40 on a movie! Wrong data/reportor numbers you have control over after you have paid your taxes experience will normal. Per hour worked C. Technological Change D. Trade ( b ) shift AD... Is 200 ; government purchases and taxes are both 400 real rate return!, how much does the question reference wrong data/reportor numbers explain the main variables! % of gain or loss of the good causes quantity demanded does Equilibrium!

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