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- H0w d0es price stickiness phen0men0n lead t0 an increase in the sh0rt run level 0f 0utput acc0rding t0 the Keynesians?H0w w0uld y0u define price stickiness ?Illustrate and interpretthe short-run andlong-run aggregatesupply curvesHi I want the answer as soon as possible Given the following informations Consumption(C)= 800+0.9Y Investment( I)=8000-800r Money Supply(Ms)=28500 Demand for Money(Md)=0.75Y-1500r Find an equation for LM schedule
- What is the mariginal propensity to consume? Can the mariginal propensity to consume be grreater than 1? Explain.Autonomous Spending: $1,000 Invest2, 000 Government Spending: $3, 000 Exports: $500 C1: .55 Tax Rate: .22Marginal Propensity to Import: .09 If Investment drops by 20%, and if the government decides not to spend, whatwould the new tax rate have to change to in order to offset the drop in Y?Inventories typically increase starting at the beginningof recessions, and begin to decline near the end ofrecessions. What does this say about the relationshipbetween planned spending and aggregate output overthe business cycle?
- Assume that in 2015, the following prevails in theRepublic of Nurd:Y = $200 G = $0C = $160 T = $0S = $40I (planned) = $30Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC = 0.8,and MPS = 0.2. That is, C = 0.8Yd and S = 0.2Yd.a. Is the economy of Nurd in equilibrium? What is Nurd’sequilibrium level of income? What is likely to happen inthe coming months if the government takes no action?b. If $200 is the “full-employment” level of Y, what fiscal policy might the government follow if its goal is fullemployment?c. If the full-employment level of Y is $250, what fiscalpolicy might the government follow?d. Suppose Y = $200, C = $160, S = $40, and I = $40. IsNurd’s economy in equilibrium?e. Starting with the situation in part d, suppose the government starts spending $30 each year with no taxationand continues to spend $30 every period. If I remains"H0w w0uld y0u define price stickiness ? H0w d0es this phen0men0n lead t0 an increase in the sh0rt run level 0f 0utput acc0rding t0 the Keynesians?" C0mmentUse the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result. Real GDP Consumption PlannedInvestment GovernmentPurchases Net Exports $9,000 $7,800 $1,500 $1,000 -$700 $10,000 $8,600 $1,500 $1,000 -$700 $11,000 $9,400 $1,500 $1,000 -$700 $12,000 $10,200 $1,500 $1,000 -$700 $13,000 $11,000 $1,500 $1,000 -$700 $14,000 $11,800 $1,500 $1,000 -$700 Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?
- Use the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result. Real GDP Consumption PlannedInvestment GovernmentPurchases Net Exports $9,000 $7,800 $1,500 $1,000 -$700 $10,000 $8,600 $1,500 $1,000 -$700 $11,000 $9,400 $1,500 $1,000 -$700 $12,000 $10,200 $1,500 $1,000 -$700 $13,000 $11,000 $1,500 $1,000 -$700 $14,000 $11,800 $1,500 $1,000 -$700 (a) What is the equilibrium level of real GDP in this economy? (b) Compute the marginal propensity to consume. (c) Compute the government expenditures multipler. (d) Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?Autonomous consumption = R100mInvestment spending = R300mGovernment spending = R200 millionExports = R150 millionAutonomous imports = R100 millionMarginal propensity to consume =2/3Tax rate = 1/10Marginal propensity to import = 1/10Yf = R2 150 million Q.1.2 Calculate the size of the multiplier. Q.1.4 Calculate the change in government spending required to reach full employmentin the economyIf consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government spending is G=150 Investment is I=200 Usethemultiplierapplicabletoexport,toexplainhowa100–billiondeclineindemand forexportcouldaffecttheeconomy’s: (i) Balanceofpayment