Assume the following model of the economy: Y =C+I+G C = 120 + 0.5 (Y-T) I= 100 -10r G = 50 T=40 Identify each of the variables and briefly explain their meaning.
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Assume the following model of the economy:
Y =C+I+G
C = 120 + 0.5 (Y-T)
I= 100 -10r
G = 50
T=40
Identify each of the variables and briefly explain their meaning.
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- Find equilibrium GDP using the following macroeconomic modelWhich of the following is an example of a macroeconomic indicator? A)The price of a specific product B)The income of an individual household C)The unemployment rate D) The sales of a particular companyName two macroeconomic variables that decline when the economy goes into a recession. Name one macroeconomic variable that rises during a recession.
- In a simple model of the supply and demand for pizza, when aggregate income increases, the price of pizza ______ and the quantity purchased ______.Why do economists and managers pay attention to the measurements of macroeconomic activity? several elements of these measurements such as durable goods, non-durable goods, etcAssume the following model of the economy Y =C+I+G C = 120 + 0.5 (Y-T) I= 100 -10r G = 50 T=40 Derive the equation for the IS curve, showing Y as a function of r alone. Solve for the value of Y when r=10%, r=15%, r=20%
- T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the followingequations:(i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30(iii) y = c + x − s (iv) x = 93.53Here x denotes total investment, y is disposable income, s is the total saving by firms, and c istotal consumption. Write the system of equations in the form (1) when the variables appear inthe order x, y, s, and c. Then find the solution of the system.please answer the following macroeconomic questionUse the following macroeconomic model structure to answer the questions followed. 8 pts C = 300 + 0.8Yd; C = consumption function; Yd (Y-T) = disposable income I = 200; I = Investment G = 400; G = Government expenditure T = 200; T = Tax revenue Also assume that Yf = Full employment GDP (Potential GDP) = 5,000 8.1. The equilibrium GDP level (income) is _________. Hint: Ye = C+I+G a. 2,850 b. 3,700 c. 3,145 d. 3,800 8.2. At the equilibrium level of output, the aggregate consumption level is: a. 3,100 b. 3,250 c. 3,400 d. 3,625 8.3. At the equilibrium level of output, the aggregate saving level is: a. 550 b. 450 c. 400 d. 350 8.4. The MPC and MPS for the economy is respectively: a. 0.9 and 0.1 b. 0.85 and 0.15 c. 0.75 and 0.25 d. 0.80 and 0.20
- With the aid of the diagram, describe the four major sectors in an economy according to the macroeconomic point of view.President Biden recently boasted of his administration’s success in lowering the deficit of the US government. This reduction could be considered “budget austerity”. Budget austerity usually involves a reduction in federal government spending and/or the raising of taxes to keep the budget deficit under control. Assume that just as austerity was beginning that we found the economy at a level of Ye that was below full employment (Ye < YN), as we did in the first two quarters of 2022. Illustrate graphically using the simple expenditure model developed in class what austerity will mean when for the level of planned spending when we start at Ye<YN, in theory, for the level of planned spending and equilibrium output as it takes effect. Lastly, given the movement you show in planned spending, if any, does the policy of austerity make sense if your goal is use policy to achieve YN? Explain.Which statement below is false regarding the circular flow diagram? It depicts interaction between the three main parties in the economy. It is a common misconception that the circular flow diagram and GDP are related. It is a simple model that gives a big picture view of economic activity. A household is an initial holder of resources in an economy.
