Question

Question: 1 Classical Model: The Long Run 1.1 Open Economy Solve for the following Y, W...

Question: 1 Classical Model: The Long Run 1.1 Open Economy Solve for the following Y, W P , L, C, I, Nx, r,...

1 Classical Model: The Long Run 1.1 Open Economy Solve for the following

Y, W P , L, C, I, Nx, r, i, Md ,

when 1. Labor supply increases

ansewer key

1. L s ?,? (W/P) ?

2. L ?? Y ?, ? S ?, ? r ?

3. r ?,? C, I ?

4. r ?,? CF ?,? e ?? E

5. r ?,? i ?? Md ?? P ?

6. e, P ?? E ?? Nx ?

Explain in as much detail as possible. (Just like we did in class)

Nx = net expoet

r= real interst

i= nominal interst

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
3- Classical Model: The Long Run 1.1 Open Economy Solve for the following Y, W P...
3- Classical Model: The Long Run 1.1 Open Economy Solve for the following Y, W P , L, C, I, Nx, r, i, Md ,   when 3. Investment increases answer key 1. Y , ¯ ¯ (W/P), L¯ 2. I ?? r ?? C ? 3. r ?? CF ?? e ? 4. r ?? i ?? Md ?? P ? 5. e, P ?? E ?? Nx ? Explain in as much detail as possible. (Just like we did...
Given a closed economy in the long run (classical model): Y=F(K,L) Y=C+I+G C=c(Y-T) I=I(r) G and...
Given a closed economy in the long run (classical model): Y=F(K,L) Y=C+I+G C=c(Y-T) I=I(r) G and T set by Government policy. For the following changes in the economy, show the impact of the change on the loanable fund market. Use a fully labeled graph. Also state the impact of the change on the following variables: Y, C, G, S, I and r. 1) A decrease in Government Spending. 2) A decrease in Taxes. 3) An increase in Investment demand.
Consider the following Keynesian (short-run) model along with the Classical (long-run) model of the economy. Labor...
Consider the following Keynesian (short-run) model along with the Classical (long-run) model of the economy. Labor Supply: Le = 11 Capital Supply: K=11 Production Function: Y-10K.3(Le).7 Depreciation Rate: &=.1 Consumption Function: C=12+.6Yd Investment Function: I= 25-50r Government Spending: G=20 Tax Collections: T=20 Money Demand Function: Ld= 2Y-200r Money Supply: M=360 Price Level: P=2 Find an expression for the IS curve and plot it. Find an expression for the LM curve and plot it. Find the short run equilibrium level of...
Consider the following short-run model of an open economy: Y = C+I+G+NX C = 100+(2/3)(Y-T) I...
Consider the following short-run model of an open economy: Y = C+I+G+NX C = 100+(2/3)(Y-T) I = 200 NX = X-(1/E)IM X = (1/E)400 IM = (1/6)E Y Domestic and foreign prices are constant with P=P*=1. Thus, the real exchange rate is equal to the nominal rate E. The policy makers want to achieve the following targets for output, consumption and net exports: YT=1200, CT=780 and NXT=0. Show how these targets can be achieved using government consumption (G), taxes (T)...
Consider the following short-run, open economy model of the economy. Goods Market C = 100 +...
Consider the following short-run, open economy model of the economy. Goods Market C = 100 + 0.9(Y − T) I = 50 − 7.5r; NX = −50 G = 200; T = 100 Money Market M = 4,000 P = 10 L(r, Y) = Y − 350r a. (4 pts) Derive the IS and LM equations and put them on a graph with the real interest rate (r) on the vertical axis and real GDP (Y) on the horizontal axis....
The following equations are those for a small open economy, which takes the world real rate...
The following equations are those for a small open economy, which takes the world real rate of interest ( r w ) as given. In particular: M/P = 24 + 0.8Y - 400r C =2+0.8(Y-T) - 200r I =30 - 200r NX =24-0.1Y - 2e Y =C +I +G+NX You are given the following values for various variables: rw = 0.05; M/P = 100;G = 10 and the budget is balanced. Using the model, find the values for Y, e...
Consider the closed-economy model. (a) Suppose the economy is initially in long-run equilibrium with Y =...
Consider the closed-economy model. (a) Suppose the economy is initially in long-run equilibrium with Y = Y¯ , r = ¯r, and P = P1. Draw IS-LM and AD-AS diagrams showing this equilibrium. (b) Suppose the economy is then hit by an adverse supply shock, which causes P1 to jump up to P2 > P1. Using Keynesian cross and money market diagrams, explain what will happen to the IS and LM curves in the short run as a result of...
) Explain expansionary monetary policy using the following four macroeconomic models. Indicate what happens to real...
) Explain expansionary monetary policy using the following four macroeconomic models. Indicate what happens to real GDP (Y), the components of real GDP (C, I, G, NX), and the price level (P). Why are the answers different depending on the model used? Short Run: Closed Economy (IS/LM) Short Run: Aggregate Demand/Aggregate Supply Long Run: Closed Economy (S = I) Long Run: Small, Open Economy (S – I = NX)
The next several questions refer to the case of an economy with the following equations: Y...
The next several questions refer to the case of an economy with the following equations: Y = 50K0.3L0.7 with K=100 and L=100 G=1000, T=1000 I = 2000- 1000r C = 200 + 0.5(Y-T) real money demand: (M/P)d = 0.2Y - 1000r nominal money supply: M = 3200 (Assume a closed economy: Y = C + I + G. Assume the economy is in the long run equilibrium.) compute the nomianl wage (W)
Assume the following model of the closed economy in the short run, with the price level...
Assume the following model of the closed economy in the short run, with the price level (P) fixed at 1.0 C= 0.5 (Y -T) T = 1,000 I = 1,500- 250r G = 1,500 Md/P = 0.5Y - 500r Ms = 1,000 a) Derive the numerical aggregate demand (AD) curve for this economy, expressing Y as a function of P b) You are the chief economic advisor in this hypothetical economy. Do you believe that fiscal policy is more potent...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT