- Given: C = 102 + 0.7Y , J = 150 - 100 M_{S} = 300, M_{t} = 0.25Y and M_{s} = 124 - 200 ,. Find: a- The equilibrium level of income and the equilibrium rate of interest, b- The level of C. I, Mr and M_{z} when the economy is equilibrium
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2- Given: C = 102 + 0.7Y , J = 150 - 100 M_{S} = 300, M_{t} = 0.25Y and M_{s} = 124 - 200 ,. Find:
a- The equilibrium level of income and the equilibrium rate of interest,
b- The level of C. I, Mr and M_{z} when the economy is equilibrium
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- An economy is described by the following set of equations: C = 2,600 + 0.8(Y – T) – 5,000r, I = 3,000 – 15,000r, G = 800, X = M = 0, T = 1,000 + 0.3Y. The real interest rate, expressed as a decimal, is 0.10 (that is, 10 percent). Suppose the flow of GDP consistent with full employment is 10,000. What real interest rate would achieve full employment?1) In the loanable funds market model, assuming everything else is constant, which curve (supply of funds or demand for funds) is affected if there is an increase in national saving? How will equilibrium real interest rate and equilibrium quantity of loans change as a result?Suppose Jack starts 1st period with 0 wealth but earns 200, his second period income is 700 and his last and 3rd period income is 300. He does not care about a 4th round. The real interest rate is 0 but he can not borrow . He wants to smooth consumption perfectly across the 3 periods. His consumption and saving in the first period are?
- 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?Suppose a closed economy is characterized by: Y=12000, G = 3000, T = 3000, I = 5000 - 2000r, C = 500 + 0.5(Y-T) where r in the real interest rate. Calculate the following: Public savings, Private savings, investment and real interest rate. please answer step by step.Answer must be correct.Show all calculation. please Don,t copy from anywhere.In the year of 2019, the U.S. economy produced a total output of $20.75 trillion. During the same year, the U.S. federal government spent $7.88 trillion. The desired consumption and desired investment in the U.S. for the year is described by: Cd=15-150r, Id=10-200r Where Cd is the desired consumption in trillions of $, Id is the desired investment in trillions of $, and r is the real interest rate in decimal form. if the average real interest rate during the year 2019, is 4.1%, how much is the desired national saving, Sd, in trillions of $? round answer to at least 2 decimal places.
- a) What generally happens to the major macroeconomic variables such as GDP, unemployment rate, and inflation rate during an economic recession? b) Define economic expansion using the reference terms of actual GDP and potential GDP. c) Explain how investment spending and interest rate related. What is the reason behind such a relationship? d) Find the correlation coefficient between interest rate and Real Investment. Does this (actual) value support the theoretical relationship between the variables? Explain. (e) Explain the importance of investment spending for the economy. Only typed answerSuppose the incoming Biden administration permanently increases taxes and government purchases by equal amounts. 1)What will be the impact (if any) on output in the short run? 2)What will be the impact on the economy’s normal real interest rate (r*) and normal investment (I*, which is the same as normal saving, S*)?Assume that GDP (Y ) is 5,000 in a closed economy. Consumption (C) is given by the equationC = 1,200 + 0.6(Y −T)−100r, where r is the real interest rate, in percent. Investment (I) is givenby the equation I = 2,000 − 200r. Taxes (T) are 1,000, and government spending (G) is 1,500.(a) What are the equilibrium values of C, I, and r? (b) What are the values of private saving, public saving, and national saving? (c) For the given consumption function, what does the relationship between consumption and theinterest rate imply about the saving schedule?
- Suppose that the real interest rate is 6%. Next, assume that some factors changes, such that the expected rate of return, declines by  two percentage points at each prospective level of investment. Assuming no change in the real interest rate, by how much and in what direction will the investment change?  which of the following might cause this change: (a) a decision to increase inventories; (b) an increase in excess production capacity.Assume an economy with 1000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units, and pays a lump-sum tax of 10 in the current period and 20 in the future period. The market real interest rate is 8%. Of the 1000 consumers, 500 consume 60 units in the future, while 500 consume 20 units in the future. Determine each consumer’s current consumption and current saving. Current Consumption: Current Saving: Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, and the quantity of debt issued by the government in the current period. Aggregate Private Saving Aggregate Consumption Government spending: Current Future Current period government deficit Quantity of debt#3 . Assume an economy with 1000 consumers. Each consumer has income in the current period of 50 units and future income of 60 units, and pays a lump-sum tax of 10 in the current period and 20 in the future period. The market real interest rate is 8%. Of the 1000 consumers, 500 consume 60 units in the future, while 500 consume 20 units in the future. (a) Determine each consumer’s current consumption and current saving. (b) Determine aggregate private saving, aggregate consumption in each period, government spending in the current and future periods, the current-period government deficit, and the quantity of debt issued by the government in the current period.
