and the LM equations. Calculate the equilibrium interest ra taxes are cut by 20% and the money supply is held constant interest rate and level of income? that the Federal Reserve changes the money supply to hold t. What is the new level of income? What must the new mo
Q: Total Population 2019 1174960 2020 1178460 2021 1182030 Your answer What is real GDP for year 2021?…
A: The real GDP is the GDP that is calculated at constant price. It is the real measure of calculating…
Q: In developed countries main reason for unemployment is Lack of supply O Excess demand O Lack of raw…
A: Unemployment is defined as a situation in which individuals are actively looking for a job but are…
Q: 5. Complaints are often made that the gasoline industry colludes to maintain monopoly profits for…
A: As we know that 1970s case where OPEC ( a big cartel ) decided to reduce the supply of OIL which…
Q: Suppose in the model there is a limited commitment friction and the possibility the nation could…
A: Answer-
Q: Many US and European Multinationals have expanded in Asian countries and have established…
A: A multinational can be a company that operates in its home country, as well as in different…
Q: High-powered money consists of O demand deposit and currency. O paper money and coins. O deposit…
A: High Powered Money is also called the monetary base of the country. So it should include everything…
Q: vid purchases two goods: bananas (x) and tea (y). Her indifference curves are smooth and convex.…
A: Introduction This topic is related to indifference curve of two different goods.
Q: the technology for producing a good enables one firm to meet the entire market demand at a lower…
A: 7) In a perfect competition market structure, there are a large number of buyers and sellers. So…
Q: Organisational Behaviour Select a company on your choice that undergoes organisational failure in…
A: There are many types of phones that we can consider on market, Nokia was one of the varieties of the…
Q: According to the Reserve Bank of Australia (RBA), which of the following is a monetary policy goal?…
A: Reserve bank of Australia has different policy targets which it tries to achieve.
Q: Government economic planning has a historically better record of creating prosperity than the free…
A: Free market refers to the economic system in which the private sector dominates the economy. In this…
Q: Why is the answer different to the answers for this question? The questions are all the same.
A: The questions are all not the same. Here is only one question. And rest are the option of the…
Q: Consider a market with the following demand and supply = 500 - 2p, Qs = p + 50. At the market…
A: Consumer surplus is the measure where we calculate the consumers benefit , this is the surplus of…
Q: Assume that pickled eggs are an inferior good and its market is currently in equilibrium. What will…
A: Given: Pickled Goods are inferior good and its market is currently in equilibrium.
Q: 1. Competitive market, Practice Question Wheat farmer Joe has the cost function of C(q) = 160,000 +…
A: A perfectly competitive firm is a price taker, which means it takes the price set by the market…
Q: 2. What is the significance role of financial institutions, is and how it operates? of understanding…
A: The business entities that tend to provide services as being intermediaries for various monetary…
Q: MCQ's 1) The long run average total cost curve is a) tangent to all…
A: In perfect competition firm sell homogeneous product and where price is given and firmscare price…
Q: Producer sale the goods at below the cost to drive out his competitors from the market is called…
A: The producer surplus is the distinction between the price got for an item and the minimal expense to…
Q: Which of the following statements is/are correct? i. The Reserve Bank of Australia (RBA) has…
A: Reserve Bank of Australia: The Reserve Bank of Australia will be Australia's national bank and…
Q: Change in Stock (tons) 50
A: The given graph shows the change in stock on the verticle axis and population stock on the…
Q: 4. Suppose that, with the goal of stimulating aggregate demand in the next period (t + 1), the…
A: The aggregate demand curve shows the inverse relationship between price and the total quantity of…
Q: Which factor of production is almost never included in a firm's fixed costs? Land Labor Capital All…
A: Fixed costs will be costs that don't differ with the sum created. Models are interest on debt,…
Q: The cost for maintaining a car cost as follows: 2 years- P20,000 4 years- P40,000 8 years- 80,0000…
A: Given, Maintenance Cost: 2years=P20,000 (P1) 4years=P40,00 (P2) 8years=P80,000 (P3) Interest…
Q: In the real sector, the following data are available: Consumption Function C = 100 + 0.75Y…
A: Given information Consumption function C=100+0.75Y I=60-200r Money in circulation=500 Demand for…
Q: There are three (3) stages in the movement of developing countries where subsistence farming is…
A: The above problem is based on tracing the development path of the given nation. There is a…
Q: A copayment is a shared medical expense belween. A.a parent and child B.the insured and the…
A: Health insurance companies have introduced Co-payment systems in order to reduce the chance of moral…
Q: 2. In February 2009, BLS statistics for the American population were: Employed 29.164 million…
A: Here, information about employed, unemployed and not in labot force is given using which one is able…
Q: The economy of Ghana is made up of three sectors namely: Agriculture, Industry and Services. These…
A: As of late notwithstanding, the area has been a minimal supporter of the public results. Patterns in…
Q: Often, firms offer a larger quantity (milk, paint, toilet paper, a cup of Coke, second dress, second…
A: Sellers frequently give a bulk discount to persuade customers to buy in bigger numbers. The vendor…
Q: Consider a country with a flexible exchange rate, and which initially has a current account surplus…
A: Economic equilibrium is that the mixture of economic variables towards the normal economic…
Q: solve 5 min this is the answer plz write hand written Here, the given graph shows the price for…
A: We can not provide handwritten solutions due to the company's policy. Taxes are the duties imposed…
Q: Consider two firms with identical cost structures competing each other in the market of a good whose…
A: P=50-Q =50-Q1-Q2TR1=(50-Q1-Q2)Q1 =50Q1-Q12-Q1Q2MR1=50-2Q1-Q2C=10+Q2MC1=2Q1Now, for…
Q: 2. Monopoly, Practice Question Firm P is a monopolist for a new drug that makes people feel thinner,…
A: Cost function : C(Q) = 200 + 10Q + Q2 Demand function : P(Q) = 82 - Q A monopolist optimizes its…
Q: Take a practical example to describe a form of market structure. Draw illustrations if needed.
A: Market Structure refers to different categories in which industries are classified based on the…
Q: 2. What has lead to increase globalization?
A: The Globalisation refers to the integration of world economies through trade and commerce or flow of…
Q: the early nineteenth century. 1.8 1.4 Wages relative to the cost of capital 5 0.9 England France 0…
A: Isocost lines denote the different combinations of the inputs that can be used to produce different…
Q: If period 1 is the base year, the bundle price of goods in period 1 is $200, and the bundle price of…
A: Price bundling (item packaging or item group evaluating) is a showcasing methodology that joins at…
Q: 2. Suppose Jill derives utility from not only consuming goods, but also from enjoying leisure time.…
A: Labor supply function is function that says how much labor hours are supplied are different wage…
Q: Imagine that you work for the World Bank and you have been called to Ghana to aid the new president…
A: Given information Ghana is agricultural dominated country. It's 50% population is working in…
Q: Based on the following table, how many barrels of oil is efficient? How might transaction costs…
A: Transaction costs basically refers to the costs associated with purchasing or selling a product or…
Q: Protectionism is most likely to be justified to
A: Introduction Protectionism. protectionism is used for the economical purpose in which any country…
Q: Ed received an income tax refund of $3,200 in September 2019. He put the money in a drawer and spent…
A:
Q: In the table below are the demand and cost data for ECON Drugs, a pure monopolist. Complete the…
A: Profit is maximized where marginal revenue is greater than or equal to marginal cost
Q: Consider Robinson Crusoe who lives alone on the island. He can produce two good eggs (good X) and…
A: A production–possibility frontier (PPF) is a graphical representation of all possible output options…
Q: Benson Manufacturing is considering ordering electronic components from three different suppliers.…
A: Given that Electronic component is ordered from three different suppliers. Sample shipment of 500…
Q: solve 5 min this is the answer plz write hand written Here, the given graph shows the price for…
A: Note: As student ask for handwritten we are submitting the answer in handwritten.
Q: Assume that a business firm finds that its profit is greatest when it produces $42 worth of product…
A: There are 4 factors of production given, i.e., labor, land, capital, and entrepreneurial ability.…
Q: If price discrimination is the option to implement within the context of elasticity of demand, what…
A: Price discrimination refers to charging different prices to different customers for the same…
Q: What are the factors affecting the demand for air travel within the United States?
A: Introduction Low flight prices, rising standard of living, and an anticipated recovery in global…
Q: What are the similarities and differences between a monopolistic competitive market structure and an…
A: marketplace is a platform wherein transaction takes area among the manufacturers of a commodity and…
Step by step
Solved in 4 steps
- Y6 4.) The following equations describe an economy. Y = C + I + G C = 50 + 0.7(Y-T) I = 108 -200r G = 120 T = 120 (M/P)d = 2Y -200r M = 1000 P = 1 a.) Use the relevant set of equations to derive the IS curve. Graph it on an appropriately labeled graph. b.) Use the relevant set of equations to derive the LM curve. Graph it on an appropriately labeled graph. c.) What is the equilibrium level of income and the equilibrium real interest rate? d.) Now consider that the LRAS curve is Y = 600. Draw the LRAS curve on the IS-LM Model and the AD-AS Model for this economy. (Remember, P= 1) e.) What will happen for this economy to reach long run equilibrium?An economy is described by the following equations: C= 2,600+ 0.8(Y-T) - 10,000r IP = 2,000-10,000r G = 1,800 NX = 0 PAE = C+1²+ GANX T = 3,000, Where the definitions of each variables are the same as our lecture notes. The real interest rate, r, expressed as a decimal, is 0.10 (that is, 10 percent). a. Find a numerical equation relating planned aggregate expenditure to output. b. Solve for short-run equilibrium output. c. Show your result graphically using the Keynesian-cross diagram. d. Now, suppose that potential output Y* equals 12,000. What real interest rate should the Fed set to bring the economy to full employment? e. Recalculate question (d) for the case in which potential output Y* equals 9,000.Consider an economy with the following information: Y = C + I + G, C=180+0.7( Y-T), I= 100-18i + 0.1 Y, T =400, G=400, P=1, M=5400, L=6Y -120i, M/P=L Derive the IS equation. Derive the LM equation. Solve the IS-LM to obtain the equilibrium output and the interest rate
- Macroeconomics Question 1) Given the following: Money supply is 1400, C = 120+0.7(Y-T). I = 200 – 10r, where r denotes the real interest rates, and T denotes the Taxation = 200, G = 400. The real money demand function (m/p = 0.1Y100r). Required: Calculate the equilibrium income and equilibrium rate of interest. II. If autonomous investment I0 increases by 300 calculate the investment multiplier (k) and analyze the impact on income (Y) and consumption (C).2. In the IS-LM model, what is the effect of an increase in government purchases? Draw an IS-LM diagram to illustrate. In this question, it is not necessary to include the FE line. a) What is the effect on output and the real interest rate? b) What is the effect on investment spending? c) If the LM curve had been horizontal, explain how your answers to a and b would have been different.Assume the following IS-LM model:Expenditure sector: Money sector:C = 100 + (4/5)YD I = 300 - 20i M = 700G = 120 TA = (1/4)Y P = 2 YD = Y - TA NX = -20 Md = (1/3)Y + 200 - 10i a) Derive the IS and LM equations for the above model.b) Draw the IS and LM curves. What are the equilibrium values of output (Y) and interest rate(i)? Show these values on the graph you drew. Derive the equilibrium values of consumption (C) and money demand (Md).c) How much investment (I) will be crowded out if the government increases its purchases by ΔG = 160 and nominal money supply (M) remains unchanged? Show how this increase in government purchases would affect the graph in part (b) by drawing a new graph.
- . Consider the following IS-LM model (all amounts are in millions of dollars): C = 50 + 0.6 YD T = 20 G = 300 I = 450 + 0.2 Y - 1500 i Derive the IS equation in the form Y = function (i, ….). The central bank sets an interest rate of 10%. What is the full SR model eqm Y? Use (M/P)d=3Y– 4000i to calculate what the real Ms is at this full SR eqm. Graph this eqm in 3 separate graphs: i-Y, i-(M/P), and Z-Y spaces. You may link these graphs up or leave them separate. Suppose Congress decides to decrease G from 300 to 295, cet. par. Provide a specific $ amount for the new eqm Y. Show this “shock,” with its appropriate name, in the 3 graphs of part b. above. Present and discuss all changes in all components of IS and LM using…1- If government expenditure (∆G) is increased by AED 400, and tax (∆T) has also increased by AED 400, Marginal propensity to save is given as 0.25, what would the increase in National Income (∆Y)? 200 300 400 500 2- For an economy, the central bank has increased the money supply, what would happen to LM curve? It will shift to right It will shift to left It will not shift None of the options are correct 3- Which of the following sequence of events follows an contractionary fiscal policy? Increase in government expenditure and tax Decrease in tax and government spending Decrease in government expenditure and increase in ta Increase in government spending and decrease in Tax 4- Suppose for an economy following information is given. Consumption (C) = 40+0.75(Yd), Tax (T) = 80 Million AED ; I= 140-10r; Government spending (G) =100; Money demand = 0.2Y -5r ; Money supply = 85 million AED. a. Compute the equilibrium Income Y and rate of Interest (r) ? b. Suppose…The consumption function is given by: C = 200+0.75 (Y-T). The investment function is I = 200-25r. G =100 T=100 1. The money demand function is Md = Y-100r. The Money supply M is 1000 and price is 2. Derive the LM equation.2. Find the equilibrium interest r and the equilibrium level of income Y, investment and consumption3. Suppose that the government purchases (G) raised from 100 to 150. How much does the IS Curve shift? What are the new equilibrium interest r and level of income, y? If there is no crowding out effect, what is the full multiplier effect of the change in G?
- Consider the following IS–LM model: C = 100 + .25YD I = 50 + .25Y - 1000i G = 150 T = 100 (M/P) d = 2Y - 8000i (M/P)s = 1000 a. Derive the IS relation b. Derive the LM relation c. Solve for equilibrium real output. d. Solve for the equilibrium interest rate e. Solve for the equilibrium values of C and I f. now suppose that the money supply increases to M/P = 1010. Solve for T, f. suppose that government spending increases to G = 155 What is the value of money supply? g. From what we studied, which policy, expansionary fiscal policy or expansionary monetary policy will undoubtedly increase investment.Question Consider that the Ghanaian economy is a small and close, which is characterised by the following. AD=C+I+G+NX C=a+bY* Y*=disposal income T=T0 I=I0 G=G0 Md/P=Ld(Y,i) Ms=money supply ,which is given . AD=Aggregate demand ,C=consumption,G=Government expenditure ,T=Tax,P= Pricelevel,I=Investment,NX=Netexports (a) Consider an increase in Government spending ∆ > .Assume for now that both price and expected price are fixed. Also assume that government does not implement any other policy than the increase in Government spending. What is the effect of this policy on the goods market? (b) What is the effect on equilibrium in the money market? Present your answer in swells labelled diagram, showing both money supply and demand before the policy was implemented, and that after the policy was implemented in the same graph. (c) Solve for equilibrium in the goods market. d) Suppose the policy change is rather a increase in real money supply not a decrease in government spending.What…Assume the following model of the economy: Y = C + I + G C = 120 + 0.5(Y - T) I = 100 - 10r G = 50 T = 40 Md = Y - 20 r Ms = 600 P = 2 Graph both the IS and the LM curves. Use r = 5, 10, 15 What are the equilibrium level of income and equilibrium interest rate?