Define simultaneous causality bias. Explain the potential for simultaneouscausality in a study of the effects of high levels of bureaucratic corruptionon national income?
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Define simultaneous causality bias. Explain the potential for simultaneous
causality in a study of the effects of high levels of bureaucratic corruption
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- both life cycle and permanent income hypothesis rely on Fischer's intertemporal choice model estimating present value of income. however both make different assumptions about the present value of income. explainQ2: Solve the national-income model by matrix Inversion:? = ? + ?0 + G … … … … … … … … … … . . … . (1)? = ? + ?(? − ?), (? > 0,0 < ? < 1) … … (2)? = ??, 0 < ? < 1 … … … … … … … . … . (3)Consider the following national income model : Y = C + I + Go C = 102 + 0.6Y 3.3000000000000003I = 253 + 0.21Y Where Go = 184 (i) Identify the exogenous variable/s. if there are more than one variable, separate each variable with a comma Convert this system of equations in matrix form. (ii) What is the determinant of the coefficient matrix? (Give your answer to 'three' decimal places, if possible) (Note: you can use either inversion or Cramer's rule to find the values of Y, C, and I.) (iii) What is the equilibrium value of Y? (Give your answer to 'three' decimal places, if possible) (iv) What is the equilibrium value of C? (Give your answer to 'three' decimal places, if possible) (v) What is the equilibrium value of I? (Give your answer to 'three' decimal places, if possible)
- Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y Identify endogenous variablesFrom the press release of the statistics of Retail Sales for January 2021, a government spokesman said that, “The figure for January was conceivably distorted by the difference in timing of the Lunar New Year, which fell in mid-February this year but late January last year.” Explain the rationale of this statement. Is the year-on-year percentage change of retail sales for January 2021 expected to be higher or lower than usual?Question 3: National Income Determination Model Consider the following three-sector national income determination model assuming equilibrium in the economy: C = 20 + 0.85 (Y − T) T = 25 + 0.25Y I = 155 G = 100 Determine the exogenous and endogenous variables in the system. Solve the model presented in the above system of equations using the matrix inverse and the Crammer’s rule for the equilibrium values of the unknown variables. Verify your solution in part (2) above by solving these simultaneous equations.
- Aggregate U.S. health care spending in 2017 was approximately Group of answer choices 5.2 percent of domestic output (GDP). 13.1 percent of domestic output (GDP). 17.9 percent of domestic output (GDP). 21 percent of domestic output (GDP). The unemployed are disproportionately represented among the uninsured because Group of answer choices one must be working to qualify for Medicaid. most workers obtain health insurance through their employers. most are young and in excellent health, so they choose not to purchase health insurance. a large percentage of the unemployed are heads of single-parent families.Explain what is meant by serial correlation and discuss its underlying causes.Read the analyst's analysis (see below) of the relationship between the minimum wage and employment across states, study the table of regression results (See below), and answer the following questions: a. Interpret the coefficient on Minimum Wage in Column 1.
- Consider the two-period household-maximization model discussed in class. The model is modified in order to look at applications including credit constraints, interest-rate markups, and taxation. A representative household lives for two periods and maximizes utility of consumption in period 1 and in period 2. The utility is represented by log(c) where c denotes consumption. Assuming no discounting between period 1 and period 2. The maximization problem for the representative household can be written as a) Explain what is meant by a representative household. Briefly explain the budget constraints of the representative households and of the government. Explain the role played by the assumption that the representative households lives for only two periods and the assumption of “no discounting”.Consider the two-period household-maximization model discussed inclass. The model is modified in order to look at applications including credit constraints,interest-rate markups, and taxation. A representative household lives for two periods andmaximizes utility of consumption in period 1 and in period 2. The utility is represented bylog(c) where c denotes consumption. Assuming no discounting between period 1 and period 2. The maximization problem for the representative household can be written asmax{log c1 + log c2}c1 + a1 = y1 − τ1 + (1 + r)a0c2 = y2 − τ2 + (1 + r)a1where y1 and y2 denote income levels in period 1 and period 2, τ1 and τ2 are taxes in the twoperiods, and a0 and a1 denote the assets of the households in each period. a0 is exogenouslygiven. Assume the interest rate r = 0, and the government can borrow or save at the sameinterest rate so that its present-value budget constraint is given byg1 + g2 = τ1 + τ2where g1 and g2 are exogenous government expenditures in the two…Consider the two-period household-maximization model discussed in class. The model is modified in order to look at applications including credit constraints, interest-rate markups, and taxation. A representative household lives for two periods and maximizes utility of consumption in period 1 and in period 2. The utility is represented by log(c) where c denotes consumption. Assuming no discounting between period 1 and period 2. The maximization problem for the representative household can be written as below (see image): Question: Show consumption c1 and c2 (you can use algebraic or graphical methods). In theanswer, you should discuss whether a1 ≥ 0 or a1 < 0 and provide an economic interpretation.What determine(s) the sign of a1 and why?