Given a four sector economy model, equilibrium income will be achieved when Select one: OA I+G+M = S+T+X B. H+S=T+G S+T+M = I+G+X 1+T+M=S+G +X O C. OD.
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- (50 points) Consider the two-period economy with investment discussed in class. Forthe sake of simplicity, assume that the utility is time separable and that the per-periodutility is equal to:u(C) = log CAssume also that the technology to produce the consumption goods has constant returns to scale. Moreover, capital is the only input to production. Hence the currentperiod technology can be represented as:Y = zK1where Y , K, and z stand for output, capital and total factor productivity in the currentperiod. The future period technology is akin to the current period technology. There isno government expenditure in the current and future period so that G = 0 and G0 = 0.Finally there is full capital depreciation, namely δ = 1.(a) (10 points) Write down the social planner’s problem. State the variables withrespect to which the social planner maximises.(b) (10 points) Derive the first order conditions to the planner problem. Rearrangethere condition to find the conditions characterising the…Exercise D25 What role does government play in stabilizing the economy and what are the tradeoffs that must be considered?If all quantities produced rise by 5 percent and allprices fall by 5 percent, which of the following bestdescribes what occurs?a. Real GDP rises by 5 percent, while nominalGDP falls by 5 percent.b. Real GDP rises by 5 percent, while nominalGDP is unchanged.c. Real GDP is unchanged, while nominal GDP risesby 5 percent.d. Real GDP is unchanged, while nominal GDP fallsby 5 percent.
- G. Menges developed the following econometric model for the West German economy*: Yt = β0 + β1Yt−1 + β2 It + u1tIt = β3 + β4Yt + β5 Qt + u2tCt = β6 + β7Yt + β8Ct−1 + β9 Pt + u3tQt = β10 + β11 Qt−1 + β12 Rt + u4t where Y = national incomeI = net capital formationC = personal consumptionQ = profitsP = cost of living indexR = industrial productivityt = timeu = stochastic disturbances Required: a. Which of the variables would you regard as endogenous and which asexogenous?b. Is there any equation in the system that can be estimated by thesingle-equation least-squares method?c. What is the reason behind including the variable P in the consumption function?Good morning. Please help me with this question from my textbook. Refer to figure 1 which shows the income flows(Rm) in the economic circular flow model for a small economy.Assume a three-sector economy where: Y= C+I+G, C=C0 + bY, and I=I0= 83; G=G0 =27. Assume further that C0 = 93; b=0.84. Find the value of I. Income (Y) and II. Consumption (C) of this economy.
- Good evening Please help me with this question from my textbook. Refer to figure 1 which shows the income flows(Rm) in the economic circular flow model for a small economy.suppose the production formula is given by yt= kt ^1/3 where y is the output per worker and k is the capital per worker. futhermore assume that the saving rate is exogenous and the capital deprecitates at delta rate. if the sum of both deprectiation rate and saving rate equals 1, answer the questions below 1. find the steady state values of capital, output, investments and consumption as functions of the saving rate only? 2. in a diagram show the steady state value values in a part (a)?Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 a. Investment rate doubles b. depreciation rate falls by 10% c. Productivity level rises by 10% d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double
- 16 True or False? The key difference between the Solow and production/expenditure models of the economy is that the Solow model endogenizes the saving rate.(a) Explain the characteristics of the production function used in the Heckscher-Ohlin (H-O)model. (b) Explain with the help of a graph how we can determine the specific combination oftwo goods that can be produced in the economy in the H-O model.In macroeconomics, the connection from inputs to outputs forthe entire economy is called _______________. a)physical capital b)a production function c)human capital d)an aggregateproduction function