609 Words3 Pages

Problem Set 1

Macroeconomics, ECON 2123

(Instructor: Partha Sen; TA: Peter Tsui)

------------------------------------------------------------------------------------------------------------------------------------

Posted: Friday, 19 September 2014

Due: 5:00 PM Friday, 26 September 2014

(Submit your homework into the homework collection box outside the department office)

100 marks total

Part I: True/False/Uncertain (20 marks, 4 marks each)

1. GDP is the value of all goods and services produced in the economy during a given period.

2. When disposable income equals zero, consumption equals zero.

3. The multiplier is greater than 1 if T = 0 and G = 0.

4. Paradox of saving occurs when the attempts by people to save more lead to a decline*…show more content…*

What was the rate of inflation in the year of 2010? (8 marks)

Part III: The Goods Market (55 marks)

Note Questions 2(c), 3(c) and 4(c) require short answers—no more than 5 sentences each.

1. Suppose that the economy is characterized by the following behavioral equations: (16 marks) C = 16 + 0.6 YD I = 15 G = 15 T = 10

Solve for the following variables:

(a) Equilibrium GDP (Y)

(b) Disposable income (YD)

(c) Consumption spending (C)

(d) What is the value of marginal propensity to consume (MPC)?

(e) What is the value of marginal propensity to save (MPS)?

(f) Find the multiplier and autonomous spending.

(g) What are private saving and public saving?

2. Use the economy described in problem 1 in Part III. (9 marks)

(a) Solve for equilibrium output. Compute total demand. Is it equal to production?

(b) Assume that G is now equal to 11. Solve for equilibrium output. Compute total demand. Is it equal to production?

(c) Assume that G is now equal to 11, so output is given by your answer to (b). Compute private plus public saving. Is the sum of private and public saving equal to investment? Briefly explain.

3. Consider the following behavioral equations: (15 marks) C = c0 + c1 YD T = t0 + t1 Y YD = Y – T

G and I are both constant. Assume that t1 is between 0 and 1.

(a) Solve for equilibrium output and equilibrium taxes.

(b) What is the multiplier?

(c) Does the economy respond more to changes in autonomous spending when t1 is 0 or when t1

Macroeconomics, ECON 2123

(Instructor: Partha Sen; TA: Peter Tsui)

------------------------------------------------------------------------------------------------------------------------------------

Posted: Friday, 19 September 2014

Due: 5:00 PM Friday, 26 September 2014

(Submit your homework into the homework collection box outside the department office)

100 marks total

Part I: True/False/Uncertain (20 marks, 4 marks each)

1. GDP is the value of all goods and services produced in the economy during a given period.

2. When disposable income equals zero, consumption equals zero.

3. The multiplier is greater than 1 if T = 0 and G = 0.

4. Paradox of saving occurs when the attempts by people to save more lead to a decline

What was the rate of inflation in the year of 2010? (8 marks)

Part III: The Goods Market (55 marks)

Note Questions 2(c), 3(c) and 4(c) require short answers—no more than 5 sentences each.

1. Suppose that the economy is characterized by the following behavioral equations: (16 marks) C = 16 + 0.6 YD I = 15 G = 15 T = 10

Solve for the following variables:

(a) Equilibrium GDP (Y)

(b) Disposable income (YD)

(c) Consumption spending (C)

(d) What is the value of marginal propensity to consume (MPC)?

(e) What is the value of marginal propensity to save (MPS)?

(f) Find the multiplier and autonomous spending.

(g) What are private saving and public saving?

2. Use the economy described in problem 1 in Part III. (9 marks)

(a) Solve for equilibrium output. Compute total demand. Is it equal to production?

(b) Assume that G is now equal to 11. Solve for equilibrium output. Compute total demand. Is it equal to production?

(c) Assume that G is now equal to 11, so output is given by your answer to (b). Compute private plus public saving. Is the sum of private and public saving equal to investment? Briefly explain.

3. Consider the following behavioral equations: (15 marks) C = c0 + c1 YD T = t0 + t1 Y YD = Y – T

G and I are both constant. Assume that t1 is between 0 and 1.

(a) Solve for equilibrium output and equilibrium taxes.

(b) What is the multiplier?

(c) Does the economy respond more to changes in autonomous spending when t1 is 0 or when t1

Related

## Problem Set 1

842 Words | 4 PagesPROBLEM SET # 1 Instructions: 1) Open book, open notes limited to only class materials. 2) Unlimited time. 3) This must be reflective of your individual effort. GMU Honor Code applies. 4) The Problem Set #1 (only the question solutions portion) is due at the end of the day on September 24th. 5) Show all work, as partial credit will be given for each question’s answer. Organize your work so it is easy to follow. You can use word, power point, excel or combinations

## Problem set 1

788 Words | 4 PagesECP 6705 – First Problem Set Fall, 2014 Name or Names: (if a group of two) 1. Write a memo to UWF COB Dean Tim O’Keefe explaining why you believe offering a tuition increase for the next semester MBA students will increase total revenue (assume that he has heard of elasticity, but is no expert on the subject). 2. Mentone Cabins recently reduced price by 20 percent and saw volume increase by 10 percent. Should the owners reduce price further

## Economics Problems Set 1

1365 Words | 6 PagesMBA-FP6008: Assessment 1, Economics Problem Set 1 Dennis J. Johnson Capella University 08/12/2015 Problems A, B, and C Introduction This assessment will be an analysis of graphed data and changes in supply and demand for three economic problems. Problem A involves production possibilities for consumer and capital goods, problem B is an evaluation of changes in supply and demand equilibrium, and finally, problem C involves pricing with relevance to supply and demand. Successful completion

## Essay about Problem Set 1

1638 Words | 7 PagesCACL 2014 Case studies and problem sets Problem Set 1 The following problems and questions should be answered after you have read Chapters 1 and 2. 1. GML is a public company. Its shares are listed for quotation on the ASX. What does it mean to say that a company is listed? Are all public companies listed on the ASX? See [¶1-120], [¶1-140] and key terms [¶1-500] If a public company is listed on the ASX, members of the public can buy and sell securities (such as shares) issued by the company

## A Cell Bio Problem Set 1

1411 Words | 6 PagesBSC 515, A Cell Bio Problem Set 1 Q1. In 1944, at the beginning of his book What is Life, the great physicist Erwin Schrodinger asked the following question: “How can the events in time and space which take place within the spatial boundary of a living organism be accounted for by physics and chemistry?" What would be your answer today? Living organisms contain molecular and cellular machinery that maintain homeostasis. All of this machinery is governed by the laws of Physics and Chemistry and

## BRAE 340 Problem set 1 Essay

2725 Words | 11 Pages1. a. Power– kilowatt, b. Area – acres, c. Application Rate – in/hr, d. Pressure – head, e. Depth – inches, f. Length – miles, g. Velocity – ft/sec, h. Volume – ac-in, i. Flow Rate – cu-ft/sec 2. Statements (1) and (2) refer to water volumes. Are these Net or Gross volumes? (1) Crop water use (cu-ft) = Seasonal ET (ft) x Crop area (acres) x 43,560 sq-ft/acre (2) Volume applied by system (ac-in) = Application rate (in/hr) x Irrigation time (hr) x Area (acres)

## The Solution For Problem Set 1, Required A Route Through A Maze

955 Words | 4 PagesSolution 1, The solution for Problem Set 1, required a route through a maze. Elkner et al. (2010) suggested that, “A program is a sequence of instructions that specifies how to perform a computation.” Given this information, it was concluded that rules and disciplines were required in order for the knight to understand and process any instructions given to it. Having prior knowledge that the knight would foremost, need a full understanding of movement as a program platform, it was evaluated, that

## Location Convenience Is An Important Factor When Customers Select A Financial Institution

2500 Words | 10 Pagesacquiring or partnering with already established ATM and / or branch networks. Although the second option is a relatively quick way to increase network coverage, an acquired branch / ATM network is unlikely to be a ‘perfect’ complement to an existing 1 ATMs are common in the USA (and much of the world). Customers can use ATMs to access their bank accounts to obtain cash money or check available funds, etc. ATMs are available in banks and in facilities such as malls, shopping centers, gas stations,

## 1) Research the Problem a) When the lever is winded up and all set for release the Mousetrap Car

1000 Words | 4 Pages1) Research the Problem a) When the lever is winded up and all set for release the Mousetrap Car (MTP) has potential energy that will be used to accelerate the car. 2) When the lever is released the string is pulled from its ready position on the axle causing the level to pull the string causing a pulling force on the string by the lever. 3) When the lever is released and the string is pulled the back wheels of the MTC are beginning to move because of the potential energy that is now kinetic energy

## Bus 308 Statistics for Managers Complete Week 1 to 5

3515 Words | 15 PagesWeek 1 to 5 Purchase here http://homeworkonestop.com/bus-308-statistics-for-managers-complete-week-1-to-5 Product Description BUS 308 Statistics for Managers, New Syllabus WEEK 1 Assignment Problem Set 1. Using the Excel Analysis ToolPak function descriptive statistics, generate descriptive statistics for the salary data. Which variables does this function not work properly for, even though we have some excel generated results? 2. Sort the data by Gen or Gen 1 (into

### Problem Set 1

842 Words | 4 Pages### Problem set 1

788 Words | 4 Pages### Economics Problems Set 1

1365 Words | 6 Pages### Essay about Problem Set 1

1638 Words | 7 Pages### A Cell Bio Problem Set 1

1411 Words | 6 Pages### BRAE 340 Problem set 1 Essay

2725 Words | 11 Pages### The Solution For Problem Set 1, Required A Route Through A Maze

955 Words | 4 Pages### Location Convenience Is An Important Factor When Customers Select A Financial Institution

2500 Words | 10 Pages### 1) Research the Problem a) When the lever is winded up and all set for release the Mousetrap Car

1000 Words | 4 Pages### Bus 308 Statistics for Managers Complete Week 1 to 5

3515 Words | 15 Pages