A. We are in a world with a real interest rate of 7%. The economy of Smoothiland is hit by a temporary shock to GDP of 200 million units at time T. The population of Smoothiland have a strong preference for consumption smoothing, and Smoothiland has an open economy. By how much does consumption to fall in time T+1? (in millions, round to the closes decimal)._______________ B. How much does the country have to borrow to maintain smooth consumption? (round to the closest decimal)________________

Q: explain whether the given statement is true, false or uncertain. Start your answer by selecting one…

A: Savings are treated as leakages in the economy where as investments are treated as injections for…

Q: The PH debt as of today amounts 12 trillions. This balloons with an interest rate of 0.16% yearly.…

A: Let us firstly calculate debt on every working individual . 12 trillion = 12 million millions   ( 1…

Q: Consumption expenditure: Investment expenditure: Government budget balance Money demand C= 100 +0.8…

A:

Q: Theory QUESTIONS (1) Given CD PF of - If A = 25, and a = Q = AK“L-a || /2 %3D - Determine: - AP =…

A: Marginal product of labour means a unit change in labour how much TP will change . Whereas MPK…

Q: Which of the following would shift the FE line to the right? A- An increase in the future marginal…

A: In a market, FE line represents the full-employment level of output that can be achieved in the…

Q: True of False? In the short run, stock market returns always align with macroeconomic performance…

A: 1. As a general rule, the stock markets in an economy are directly correlated with the GDP of the…

Q: ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that…

A: a) Given, Consumption         C=100 + 0.75Y Investment             Ig= 60 Govt. expenditure  G= 0…

Q: ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that…

A: Equilibrium level of GDP Y = C + I + G + NX Where C is consumption I is investment G is government…

Q: Over the last 25 years, real interest rates in the developed world have O have increased have fallen…

A: When a borrower repays a loan with interest, the real interest rate represents the percentage gain…

Q: One reason for an increase in aggregate demand (AD) on the investment side is a a rise in the…

A: An increase in aggregate demand on the investment side may occur due to a rise in the expected rate…

Q: In an economy, desired consumption and investment are given by 35- cd - 4,500 + 0.20Y-5,000r = 3,000…

A: Answer: National saving = Private saving + Government saving Now, Private saving = Income (Y) -…

Q: Using the appropriate graphs, consider the short run impact of a natural disaster that causes a…

A: Intertemporal Model is defined as a model which describes which emphasizes on how current decisions…

Q: Show the effects of a decrease in current period productivity in the Keynesian model? Why does the…

A: Keynesian Theory of Employment and Output: Keynesian Theory of employment and output determination…

Q: 20 Net Capital Outflow 10 -5 8 9 -15 -10 0 5 10 NET CAPITAL OUTFLOW (Billions of dollars) 15 20 NCO…

A: Net capital outflow (NCO) is the net progression of assets being contributed abroad by a country…

Q: (a) Using the appropriate graphs, consider the short run impact of a natural disaster that causes a…

A: Solow Model is an exogenous model of economic growth which shows the changes in the level of output…

Q: Consider a closed economy. A decrease in the price of goods that firms produce and an increase in…

A: Aggregate demand (AD) is defined as the total amount of commodities and services that is bought by…

Q: Which of the following is the real effect of the increase in the level of prices in Oman? a.…

A: Rate of inflation impacts the value currency of a country.

Q: Do not type in dollar signs or round any of your answers. Solow Mode Suppose a country's production…

A: The Solow model is the one which helps to answer the levels of growth in the economy. The production…

Q: Consider a 2-period small open economy with a capital share a = 0.33 that faces a constant worl…

A: Given: α=0.33r=0.0255A2 = 1.14A2'=1.52δ=1

Q: What could increase autonomous consumption (Ca)?     a) An increase in the products price level.…

A: The level of autonomous consumption can shift in response to events that limit or eliminate sources…

Q: Please answer all sub-parts questions. Consider an open economy with following economic numbers in…

A: Aggregate Expenditure equation for an open economy  is given by : AE = C + I + G + NX  where , C =…

Q: 1) With a nominal interest rate of 4%, an expected inflation rate of 2.5%, and interest income taxed…

A: Dear Student as you have posted multiple questions here, but we are allowed to attempt only 1…

Q: If national saving in a closed economy is greater than zero, which of the following must be true? O…

A: We know that saving is the rest part of income after consumption . Therefore income = Consumption+…

Q: 13) Which of the following is NOT an implication of Ricardian equivalence? a) Tax cuts have no…

A: 13) Which of the following is NOT an implication of Ricardian equivalence? The answer is - d) The…

Q: Let's say that consumer credit balances are low, leaving lots of money to spend --way more than in…

A: Consumer credit is a type of personal debt used to buy goods and services. One type of consumer…

Q: Valdemar is a small, open economy. If the world real interest rate increases, in the long run, which…

A: In the international market, Anu change in the interest rate of a country will affect the demand for…

Q: 18, U.S. output was $20.5 trillion, and Chinese output in 2017was $13 5 trillion. Suppose that fro…

A: All calculations given below, Equilibrium level were demand is equivalent to supply.

Q: a)Consider an increase in Government spending ∆ > .Assume for now that both price and expected price…

A: Note: Since, you've posted question with multiple sub-parts, we will solve the first the first three…

Q: Assume that the four-sector model is at play. C+I+G. All expenditures are autonomous. Given: C- 700…

A: C=700+0.80(1-t)Yt=0.25I=210-75iG=1000TR=100L=0.20Y-40iM/P=800NX=800…

Q: COVID-19 on the economy can be thought of as a permanent negative productivity shock, i.e., a…

A:

Q: option for blank #1: current and future government spending are, only future spending is, current…

A: INTRODUCTION  The Ricardian equivalent theorem  According to the economic principle known as…

Q: 12. Use the classical model of a closed economy to predict how each of the following shocks should…

A: Classical closed model is known  as a basic model of employment and output determination. It is…

Q: Refer to Table 8.9. At an aggregate output level of $400 billion, aggregate saving Select one: a.…

A: Aggregate output is defined as the total amount of goods and services which are manufactured in an…

Q: Q5 Homework • Unanswered Assume an economy can be modeled with these equations: C = 280 + 0.75 Yd, I…

A: In equilibrium, Y = C + I + G + X - M,  where Yd = Y - T

Q: (b). Consider an economy described by the following equations Y =C+I+G Y = 5000; G = 1000; T = 1000;…

A:

Q: 1. Suppose an economy is currently in the steady state. Show in clear and well labelled labelled…

A: Steady-state is necessary to understand the Solow model. At the steady-state, the rate of investment…

Q: The saving rate (gross domestic saving as a % of GDP) in Singapore, a small open economy, was 48% in…

A: In an economy, an individual uses his disposable income either in consumption or saving that money.…

Q: 9.Money neutrality is a long-run prediction of which model? a.the solow growth model b.the RBC model…

A: Money neutrality says that the change in the amount of MS (money supply) in an economy affects only…

Q: The PH debt as of today amounts to 12 trillion. This balloons with an interest rate of 0.16% yearly.…

A: Introduction Total amount of debt is 12 trillion. So 12 trillion in dollars will be…

Q: Question  Consider that the Ghanaian economy is a small and close, which is characterised by the…

A: Hello. Since you have posted multiple parts of questions and not specified which part needs to be…

Q: (a) Using the appropriate graphs, consider the short run impact of a natural disaster that causes a…

A: Since the question you have posted consists of multiple parts, we will answer the first two…

Q: Consumption expenditure: Investment expenditure: Government budget balance Money demand C = 100 +0.8…

A: The government financial system that analyses the health of an economy, expected growth, economic…

Q: How much more (or less) output will the average American have next year if the $18 trillion GDP…

A: Answer: Given,  Initial GDP = $18 trillion Population = 320 million To find the initial average…

Q: Given problem: A farmer selling eggs at 57.84 pesos a dozen gains 20%. If he sells the eggs at the…

A: Given information,  Selling price: 57.84 per dozen Profit: 20% An increase in cost: 0.133 To find:…

Q: В Current investment Points A and B in Figure 2-3 2-3.png indicate consumption and investment for…

A: Answer: Option B (economy B) Explanation: Investment is a very important factor in growth. An…