= = 2. Consider an IS/LM model of an economy with the following equations:C = 300 +0.6Ydl = 100 5iG = 200TR = 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?

= = 2. Consider an IS/LM model of an economy with the following equations:C = 300 +0.6Ydl = 100 5iG = 200TR = 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?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 26CTQ: Suppose, as an economist, you are asked to analyze an issue unlike anything you have ever done...

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2. Suppose an economy is given by the following equations: C = 150 +0.25Yd I= 150 +0.25Y - 1000i G = 250 T = 200 (M/P) = 1400 Y L(i)=2Y - 8000i Yn (Natural level of output) = 1200 Using the above information, answer the following. (a) (5) Derive the IS and LM equations. (b) (5) Find equilibrium Y and equilibrium i. Is the economy in a recession or a boom?
Please help solve and explain this equation
(1.4) Consider the following IS-LM model: I Y=C+I+G C=100+0.4(Y-T) I= 150 +0.2Y - 4,000r r = 0.01 with G = 200 and T = 100. (a) Derive the IS curve and draw it in an appropriate diagram. (b) Calculate the equilibrium values of Y, C, I and r. (c) What is the impact of decreasing government spending to G' = 180 in terms of the new equilibrium value Y"? (d) Suppose the central bank decides it wants to counteract the restrictive fiscal policy. What exactly (i.e. we look for graphical and numerical answers) can the central bank do in order to keep equilibrium output at the value obtained for Y in (b)?
You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)
7) Suppose an economy is given by the following equations: C = 150 +0.25Yd I= 150 +0.25Y - 1000i G = 250 T = 200 Yd=Y-T (M/P) = 1400 Y L(i)=2Y - 8000i Yn (Natural level of output) = 1200 Using the above information, answer the following. Derive the IS and LM equations. (a) (b) Find equilibrium Y and equilibrium i. Is the economy in a recession or a boom? Suppose that real money supply (M/P) increases to 2800. Calculate the new equilibrium output (Y) and the new equilibrium interest rate (i). Did the economy arrive at the natural level of output? Explain why or why not? (d) If your answer to part "c" above is no, is there an alternative policy that can help the economy arrive at the natural level of output? Does the alternative policy have limits? Explain.
Which are behavioural equations in the model?
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(1)The following macroeconomic model describes the economy of Sunderland. 1. Y= C +I + G + NX 2. C = 220 + 0.63 Y 3. 1 = 1000- 2000R 4. G = Go 5. NX = 525-0.10Y-50OR 6. M (0.1583Y-1000R)P (a)ls it a fair characterization to refer to equation #2 as a "simple" consumption function? Explain. (b)Derive the expression for equilibrium real output, Y, for this economy. Note: In your final expression for Y, restrict coefficient values to three decimal points. (c) Suppose government spending is 1200 , money supply by the Central Bank is 900 and the price level is 1, find the value of GDP (Y) and equilibrium interest rate (R) for Sunderland. Income Identity Consumption function Investment function Government Expenditure Net export function Money market equilibrium (2)The questions in this section are related to the macroeconomic model of Sunderland. (a)The expression you are asked to derive in question #1b can be considered an aggregate demand curve. Do you agree? Explain your answer. (b)Sketch…
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?
How do i trace this scenario on the circlar flow model, firms inventories unexpectedely rise?
1. Suppose that an equation for infant mortality is described by the function: i= Y()". where i is the infant mortality rate (expressed in per 1,000 children), Y is the gross domestic product (in US dollars), P is the population, and B and b are constants. d. Assume that b = 492.7 and ß = 0.2. Derive a specific linear equation on the relationship of i and y from the linear equation in (a). Interpret the slope coefficient. Using the equation in (d), compute for the infant mortality rate given that a GDP per capita of $3, 650 and of $4, 100. e. f. If GDP per capita GDP increases from $3,650 to $4, 100, estimate the percent change in infant mortality rate by using the computed values in (e). g. If GDP per capita increases from $3,650 to $4, 100, estimate the percent change in infant mortality by using the elasticity in the equation in (d). Compare this result to that in (f).
1. Suppose that an equation for infant mortality is described by the function: - VD (P)1². where i is the infant mortality rate (expressed in per 1,000 children), Y is the gross domestic product (in US dollars), P is the population, and 3 and b are constants. a. Derive a linear (in parameters) equation from the function above with In i as the left Y -hand side variable and In y on the right-hand side. Note that y =, which is the P' GDP per capita. b. Identify the slope and intercept in the derived equation in (a). What could be the relationship between i and y? Provide an economic explanation. c. Derive a formula of the slope parameter in the linear equation in (a) for the interpretation of the changes in the variables. Interpret the resulting equation.