Problem 2: Consider a closed three sector economy. Given the following equations: (1) (2) (3) (4) |(5) (6) Y C+I+G C=120+0.8Yd Yd=Y-T T- 2000.25 Y = 320 G 480 a) Solve for equilibrium level Y* b) What does the variable Y* stand for? How does it differ from Yd? Explain
Q: The price of crude oil during the period 2000-2010 can be approximated by P(t) = 6t + 18 dollars per…
A: Given, Q(t) = −0.08t2 + 1.2t + 5.5 million barrels per day (0 ≤ t ≤ 10).
Q: Consider the following closed economy SI model set up Y = 18000 C = 300 + 0.8(Y − 2500) I = 3500 −…
A:
Q: In the context of the closed economy flexible-price model, an increase in aggregate demand will…
A: Classical economist asserts that wage and prices are flexible. Therefore, the aggregate supply (AS)…
Q: How did De Beers acquire a monopoly in the market for diamond? b) How did De Beers increase the…
A: Monopoly refers to a situation where a single firm possesses a dominant power over the entire…
Q: The following table shows macroeconomic data for a hypothetical country. All figures are in billions…
A: Gross domestic product (GDP) is the money value of all final goods and services produced in a…
Q: Using the five sector model, give ONE example of an injection into the economy FOR EACH the…
A: The circular flow of revenue is an economic model that depicts the movement of money, goods, and…
Q: An open economy is described by the following system of macroeconomic equations, in which all…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: . Consider an economy in which the amount of investment is equal to the amount of saving (i.e., the…
A: The golden rule may be explained in terms of capital's marginal product of capital and depreciation.…
Q: Suppose that a hypothetical economy has the following relationship between its real domestic output…
A: Factors of production ,also called inputs , refer to resources needed for the development of final…
Q: Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category…
A: Net exports can be defined as the total amount of trade that a country is doing with its…
Q: 16. The input-output table for a two-sector economy is given as follows: Input to sector AInput…
A: (a) Assumptions : 1. In the economy there are two sectors -(i) inter industry sector (ii) final…
Q: Consider a simple two-sector economy containing manufacturing and agricultural industries.…
A: Primary industry sector of a nation's economy includes agriculture, forestry, fishing, mining,…
Q: Suppose the stock of capital increases by 2% and employment increases by 2%. Given this information,…
A: Per capita income or total income measures the average income earned per person in a given area in a…
Q: Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: The curve in the figure at right will shift to the right when A. the proportion of the population…
A: Answer: option D (labor productivity increases) Explanation: According to the figure, the vertical…
Q: Consider an open economy described by the following equations: C = 400 + 0.90 (Y – T)…
A: It has been provided that C = 400 + 0.90 (Y – T) X = 100 - 0.10 Y I = $300 G = $200…
Q: TRUE or FALSE. The household sector can outbid the office sector & manufacturing sector in areas…
A: The household sector is the sector that includes the population that satisfies their needs and wants…
Q: Which of the following statements about point E is FALSE? a) production of both X and Y can…
A: Production possibility frontier: It represents various possibilities of production of two…
Q: How would the closed-economy equilibrium change if fixed cost of entry, a, were larger? Use the…
A: Please find the answer below. KRUGMAN MODEL: This model uses economies of scale, differentiated…
Q: Refer to the above table. Between years 1 and 2, real GDP grew by __________ percent in Alta:…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: The following public policies can facilitate economic growth in an economy. For each policy below,…
A: All three policies are the functions of the government in order the regulate the health of the…
Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: National income is the sum of expenditure incurred by various sectors of the economy in the form of…
Q: the economy is at point D, a) more can be produced of both X and Y, without an increase in…
A: A production possibility frontier (PPF) shows the maximum possible output combinations of two goods…
Q: Refer to the information provided in Table 21.10 below to answer the question that follow. Table…
A: Real GDP formula =(Quantities in current year) (Price in base year)
Q: Refer to the figure below and assume that the values for points a, b, and c (the combined value of…
A: a. The economy was able to produce at point ‘a’ and the value at point ‘a’ was $20 billion. In 10…
Q: Define Closed and Open Economies, Explain the circular flow of income and expenditure in Closed…
A: An economy is said to be closed or open based on the area of trading goods and services that are…
Q: The following problem refers to a closed Leontief ee model. Suppose the technology matrix for a…
A: The Leontief model is related to the entire country or economy. In this model, n industries engage…
Q: Assume a three-sector economy where: Y= C+I+G, C=C0 + bY, and I=I0= 83; G=G0 =27. Assume further…
A: In three sector economy, equilibrium occurs at Y = C + I + G. ------- Where C is the consumption…
Q: Given a production function Yt = AKt1 /3L2 /3 , if K0=8, A = 2, L = 4, s = 0.2, and d = 0.05: (a)…
A: Solow growth model is a exogeneous growth model. It states that in the short run, growth rate is…
Q: Category Expenditure (in billions of 2020 Q2 NZ Dollars) Household final consumption 40.3…
A: Total investment has two components: Depreciation, that is the expenditure on capital replacement,…
Q: Suppose that the table presented below shows an economy's relationship between real output and the…
A: Input Quantity Real GDP 150 400 112.5 300 75 200
Q: An economy consists of three industries: an agricultural industry, a mining industry, and a…
A: An economy consists of three industries: an agricultural industry, a mining industry, and a…
Q: Do not type in dollar signs or round any of your answers. Suppose a country's production function is…
A: We are going to find the expression for capital per worker to answer these questions correctly.
Q: The Clark-Fisher model explains the significant shift within the economy over time by emphasizing:…
A: The Clark Fisher Model demonstrates how the importance of various sectors varies across countries,…
Q: An economy is currently at it's steady state. Their depreciation rate is 6% and their capital stock…
A: Capital refers to the goods that are used in the process of production of other consumption goods.…
Q: Suppose that the table presented below shows an economy's relationship between real output and the…
A: a) The productivity of an economy represents the relationship between an economy's real output and…
Q: Suppose that there are only two goods produced in an economy haircuts and banking services Prices,…
A: “Since you have asked multiple questions, we will solve the first 3 subparts of the question for…
Q: Comparative statics in the steady-state: draw a new version of the graph from the previous question.…
A: Solow model ensures steady growth in the long run period without any pitfalls. It is also known by…
Q: Q. 4 The Services sector has been steadily rising in relative importance in GDP of the United…
A: Service can be understood as the intangible benefits received by the firms or individuals. The…
Q: Consider an economy where the dominant industry is automobile production for domestic consumption as…
A: The Gross Domestic Product (GDP) is the summation of money value of all the final goods and services…
Q: QUESTION 10 Consider the scenario given in the table below for two economies, Economy X and Economy…
A: According to the information provided above : Production function : Y = A*KakN Change in Capital :…
Q: The tab;e below shows data for five economies of similar size. Real GDP is measured in billions of…
A: The correct solution is option c.
Q: Consider the following is the economy of Country Z: C = 200 + 0.85Y I= 100 Answer the following…
A: According to saving investment approach we equate saving function with investment function.
Q: What will be the impact of Covid 19 on global economy and local economic system? Explain.
A: The pandemic has spread quickly, affecting millions of people and bringing economic activities to a…
Q: Malaysia’s import and export activities have been reduced due to some form of lockdown implemented…
A: COVID 19 pandemic has impacted each and every country and
Q: Is a planned economy just the same as a large MNC in allocating the means of production?
A: Planned economy: - a planned economy is a controlled economy where all economic decisions are taken…
Q: Suppose the actual level of output in the economy is $1,765 million and the estimated natural rate…
A: Given Information, Actual level of output in the economy = $1,765 million Estimated level of output…
Q: "Do you think that the COVID-19 has a Microeconomic impact on the US Economy"? If yes or no,…
A: Microeconomics is the study of individual things. For example, microeconomics studies about the…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Consider an economy of four sectors, Agriculture, Energy, Manufacturing, and Transportation. Agriculture sector sells 12% of its output to Energy, 35% to Manufacturing, 25% to Transportation and retains the rest. Energy sector sells 30% of its output to Agriculture, 30% to Manufacturing, 15% to Transportation and retains the rest. Manufacturing sector sells 30% of its output to Agriculture, 27% to Energy, and retains the rest. Transportation sector sells 20% of its output to Agriculture, 10% to Energy, 30% to Manufacturing and retains the rest. a. Construct the exchange table for this economy. b. Write down the system of linear equation that leads to prices at which each sector’s income matches its expenses, and solve these equations by Gaussian method to find these prices.You have been tasked with developing a research report based on an economy of your choice anywhere in the world. The economy you select should be a growing economy or an economy that has experienced growth at some stage in its development. Present the finding of your research under the following headings. CRITICAL INDSUTRIES Identify the industry (industries) that are strategically important and critical for economic growth in your chosen economy. Provide a brief background into the nature of each of these industries and their contribution to the economy as a whole. Limit your discussion to two industries. (150 - 200 words)How so gains in worker productivity lead to gains in per capita GDP? A. as workers produce, their wages will rise and they will have more disposable income for consumption, leading to a rise in GDP per Capita. B.The amount a worker can produce and that worker's income are exactly equal so that these numbers stay the same. C.The amount a worker can pproduce and that workers's income are not always exactly equal, so these numbers may differ. D. An aggregate production function describes the input of an entire economy based on various outputs such as capital, labor and technology.
- Consider an economy where the dominant industry is automobile production for domestic consumption as well as export. Now suppose the auto market is hurt by an increase in the length of time people use their cars before replacing them. Describe the probable effects of this change on (a) GDP, (b) unemployment, (c) the government budget deficit, and (d) interest rates.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.Suppose that in a closed economy GDP is equal to 15,000, government purchases are equal to 3,000, consumption equals 10,500, and taxes equal 3,500. What are private saving and public saving? Group of answer choices 1,500 and -500, respectively 1,500 and 500, respectively 1,000 and -500, respectively 1,000 and 500, respectively
- Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Wages and Salaries 1000 Consumption 1700 Investment 700 Depreciation 50 Government Expenditure 100 Taxes 300 Exports 50 Imports 40 Income receipts from rest of the world 10 Income payment to rest of the world 50 What are net exports for China? Suppose that GDP in Japan is 1030 and then grows to 1160 (all numbers in billions) What is the growth rate of GDP in Japan?Is a planned economy just the same as a large MNC in allocating the means of production?Consider an economy with the following aggregate production function: Y = 3K1/3(AL)2/3 Capital grows through investment but also decays due to wear and tear at a constant rate δ per period. Assume that A is growing at the exogenous rate g, that L is growing at the exogenous rate n, and that households save a constant proportion s of their income. (a ) Find the steady state level of the capital per effective worker (k*), output per effective worker (y*) and consumption per effective worker (c*) - in terms of the parameters of the model. (B) What is the level of k (k**) that maximizes consumption? (C) Given a depreciation rate of 7%, population growth rate of 2%, technological progress of 1% and a saving rate of 30%, calculate the steady state levels of k, y and c. (D) To move to the level of capital that maximizes consumption, how should the saving rate be changed? Explain. (E) Calculate the saving rate needed to reach the golden rule level of capital per effective worker.
- Assume that a economy holds two factors of production, human capital managed by native-born workers and low skilled employees. If large migration of low skilled migrants occurs, how will the influence the aggregate GDP of the native population?Using the law of motion for physical capital accumulation (K), what is the amount of capital for the next period if the amount of physical capital today is 20 and Investment is 15 (Assume a depreciation rate of 10%) a) 23 b) 33 c) 34 d) 35 3- Using the law of motion for physical capital accumulation (K), what is the steady state level of capital when investment is 10? (Assume a depreciation rate of 10% and remember that physical capital is constant at the steady state) a) 100 b) 50 c) 120 d) 123 4- What is the key difference between catching up growth and cutting edge growth? a) Cutting edge growth is based on capital accumulation while catching up growth is based on technological advances b) Cutting edge growth is based exclusively on natural resources unique to every country c) Cutting edge growth is based on innovation, new ideas. Catching up growth is based on physical capital accumulation d) None of the aboveThe following problem refers to a closed Leontief ee model.Suppose the technology matrix for a closed model of a simple economy is given by the following please. P M H A = 0.5 0.1 0.7 0.1 0.3 0 0.4 0.6 0.3 Products Machinery Households Find the gross productions for the industries. (Let H represent the number of household units produced, and give your answers in terms of H.) products units machinery units households H units