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Let the
Y = C + I0 + G , C = a + b ( Y – T) , G = g Y
Identify endogenous variables
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- What type of solutions do you get in Samuelson´s Model of national income when the parameters satisfy αγ= 1?Generally, as the proportion of middle-income households in a country __________, the __________ a nation's purchasing power tends to be. A. increases; greater B. increases; less C. decreases; greater D. decreases; less E. There is no relationship at allGiven the national model Y= C + Io + Go + Xo - z C= Co + bYd Yd= Y - To Z= Zo + zY Explain the equilibrium level of income and consumption Explain the economic meanings of b and z. List the endogenous and exogenous variables of the model?
- Let the national-income model be: Y = C + I0 + G C= a+b +b(Y - T) (a > 0, 0 < b < 1) G = gY (0 < g < 1) Consider the national-income model found above. Provide a general equilibrium solution for each endogenous variable (Y, C, G) as a formula of the parameters given. Create a numerical example by selecting and justifying a set of parameters that are close to real estimates for the US economy of $19 trillion GDP.T/F National income is studied under macroeconomics.In the circular flow model: a) income and expenditures are equal. b) investment comes from government tax policy. c) consumption expenditures fund investment. d) the value of income earned by the government is determined by the foreign sector
- A National Income Model has been presented as:Y = C + I0 + G C = a + b (Y - T0)G = gYUsing Matrix Inversion Method, solve for equilibrium levels of National Income (Y), Consumption ( C )and Govt. Expenditure ( G )?Q2: Solve the national-income model by matrix Inversion:? = ? + ?0 + G … … … … … … … … … … . . … . (1)? = ? + ?(? − ?), (? > 0,0 < ? < 1) … … (2)? = ??, 0 < ? < 1 … … … … … … … . … . (3)What is sen capability approach in development briefly identifies five sources of disparity between (measured) real incomes and actual advantages as discussed by sen?
- The zero-growth proposal argues that, because higher measured GNP imposes _______ costs, it is best to aim for ________ growth of measured GNP. transaction, steady-state transaction, zero environmental, zero environmental, steady-stateG. 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?Derive the steady-state value of output per worker in the incomplete model.
