In order to prevent economies from the harmful effects of covid-19, governmentsall around the world increase their spending and central banks lower the interest rate.Investigate the impacts of these two policies on the following small open economy;C = c(y,r)I = i(r)Ex = x(fx)Im = m(fx,y)Md = L(y,r, fx)0< cy <1i' < 0andCr < 00 00 < my < 1L, < 0andandwhere r is interest rate, Ex is export, Im is import, fx is exchange rate and Md is moneydemand. Like Turkey, this small open economy suffers from dollarization problem. Thus,money demand is affected by exchange rate (fx). Equilibrium conditions are Y = C + I + G + Ex- Im, Ms = Md and r = r* (Ms is money supply and r* is world interest rate). Define tradebalance as TB = Ex – Im. Find the effect ofincrease in G on TB. (Hint: Find TB/ac)decline in world interest rate (r*) on TB. (Hint: FindOTB/ar:)a.b.

We have to find the effects of increase in G on TB, decline in world interest rate (r*) on TB.

Answered: In order to prevent economies from the…

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 27EQ

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2. Suppose that in Example 2.27, 400 units of food A, 500 units of B, and 600 units of C are placed in the test tube each day and the data on daily food consumption by the bacteria (in units per day) are as shown in Table 2.7. How many bacteria of each strain can coexist in the test tube and consume all of the food? Table 2.7 Bacteria Strain I Bacteria Strain II Bacteria Strain III Food A 1 2 0 Food B 2 1 3 Food C 1 1 1
Explain the differences between Gaussian elimination and Gauss-Jordan elimination.
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