Suppose you are developing a Keynesian Cross Model with the
following information:
C = 220+(0.75(Y-T), Planned...
Suppose you are developing a Keynesian Cross Model with the
following information:
C = 220+(0.75(Y-T), Planned Investment I = 500, G = T= 500
a.
Please find out the equilibrium income.
b.
Please find out what is the consumption at the equilibrium
level.
c.
Please graph the Keynesian Model to locate the equilibrium
between the income and
expenditure.
d.
What level of government purchase is required to achieve an
income level of $ 3700?
e.
What is the mpc for...
Let AE = C +I +G+NX where AE is the aggregate expenditure, C is
the consumption...
Let AE = C +I +G+NX where AE is the aggregate expenditure, C is
the consumption function, I is investment, G is government
expenditure and NX is the net export.
Given C = 100+0.65Y where Y is the national income and I = 100,
G = 100+0.10Y, NX = 0
(a) Graph the consumption function with Y on the horizontal axis
and C on the vertical axis.
(b) Graph the aggregate expenditure function with Y on the
horizontal axis and...
1. Given the following functions which represent an open
economy: Consumption: C=100+0.8Y Investment: I= 50 Government...
1. Given the following functions which represent an open
economy: Consumption: C=100+0.8Y Investment: I= 50 Government
Expenditure: G=130 Exports: X=100 Imports: M=50+0.2Y Equilibrium:
Y=C+I+G+X-M a) determine the values of the equilibrium level of
income, and b) determine the values of C and M at the
equilibrium
2. Given the following functions: Consumption: C=50+0.8Y
Investment: I= 750 -30r Money supply: Ms=4000
Transaction-Precautionary demand for money: L1=100 Speculative
demand for money: L2=3825-20r Determine the values of the national
income (Y), and interest...
In the Keynesian cross model, assume that the consumption
function is given by C=120+0.8(Y−T).
Planned investment...
In the Keynesian cross model, assume that the consumption
function is given by C=120+0.8(Y−T).
Planned investment is 200; government purchases and taxes are
both 400. Y, C, I G&T are all in billions.
1. Graph planned expenditure as a function of income.
2. What is equilibrium income?
3. If government purchases increase to 420, what is the new
equilibrium income? What is the multiplier for government
purchases?
4. What level of government purchases is needed to achieve an
income of...
a. Consider the following long-run model:
Real GDP (Y) = 2,000; Consumption (C) = 300 +...
a. Consider the following long-run model:
Real GDP (Y) = 2,000; Consumption (C) = 300 + 0.6 (Y-T);
Investment (I) = 500 -30r where r is the real interest rate; Taxes
(T) = 450;
Government spending (G) = 400.
i. Compute consumption, private savings, public savings, national
savings, investment
and the real interest rate.
ii. Using the same model, except now C= 200 + 0.6(Y-T). Compute
consumption,
private savings, public savings, national savings, investment and
the real interest
rate.
iii....
A. Classical/General Equilibrium
Model: Assume that GDP (Y) is 8,500B. Consumption (C) is
given by the...
A. Classical/General Equilibrium
Model: Assume that GDP (Y) is 8,500B. Consumption (C) is
given by the equation C = 210B + 0.9(Y – T). Investment (I) is
given by the equation I = 1,200B – 100B(r), where r is the real
rate of interest. Taxes (T) are 400B and government spending (G) is
500B. Show/type your work/calculations!
1. In this economy, compute private savings, public savings, and
national savings (9 points)
Private savings =
Public savings =
...
3. The IS-LM Model
Consider an economy characterized by the following equations for
consumption (C), investment...
3. The IS-LM Model
Consider an economy characterized by the following equations for
consumption (C), investment (I), government spending (G), taxes
(T), aggregate demand (Z), output (Y), and the interest rate
(i):
C = 54 + 0.3*(Y – T)
I = 16 + 0.1*Y – 300*i
G = 35
T = 30
Z = C + I + G
i = ?
Suppose the central bank has set the interest rate equal to 2%
(this is, ? = 0.02).
a)...
3. The IS-LM Model
Consider an economy characterized by the following equations for
consumption (C), investment...
3. The IS-LM Model
Consider an economy characterized by the following equations for
consumption (C), investment (I), government spending (G), taxes
(T), aggregate demand (Z), output (Y), and the interest rate
(i):
C = 54 + 0.3*(Y – T)
I = 16 + 0.1*Y – 300*i
G = 35
T = 30
Z = C + I + G
i = ?
Suppose the central bank has set the interest rate equal to 2%
(this is, ? = 0.02).
a)...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000
$11,000
$2,500
$5,000
$12,500
12,000
14,000
2,500
5,000
12,500
20,000
20,000
2,500
5,000
12,500
30,000
27,500
2,500
5,000
12,500
50,000
42,500
2,500
5,000
12,500
100,000
80,000
2,500
5,000
12,500
Calculate savings, MPC, MPS, break even income, and the
equilibrium level of income (Y = AE = C + I + G +NX) in the above
given information.
Draw a graph showing disposable income (Yd)...