Suppose that a simple economy has the following parameters. C = 100 + 0.8Y | = 100 a. Complete the following table. AE 100 200 300 400 500 600 700 800 900 1,000
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- The Montag Family purchased a house in 2020 and expects its value (in thousands of dollars) t years in the future will be well-modeled by the function V(t)=310(1.08). By what percentage does the model predict the house will increase in value each year?Use the two-period model from the Appendix to answer this question.Your current income is 40,000. Your next period (future) income is known to be 40,000.If your current consumption expenditure is 32,000, your (current) level of savings S=____(Enter your answer as a whole number.)Find the value of MPC if the value of the MPS is given as 0.33
- When the average propensity to save (APS) is 0.35, then this means people are spending 35 percent of their disposable income. people are spending 65 percent of their disposable income. people are saving $0.65 of the last dollar earned. people are spending 35 percent of their disposable income and investing the remaining 65 percent.T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the followingequations:(i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30(iii) y = c + x − s (iv) x = 93.53Here x denotes total investment, y is disposable income, s is the total saving by firms, and c istotal consumption. Write the system of equations in the form (1) when the variables appear inthe order x, y, s, and c. Then find the solution of the system.Suppose you estimate the consumption function
- Suppose you have quarterly data on new housing starts, interest rates, and real per capita income.Specify a model for housing starts that accounts for possible trends and seasonality in the variables.If consumption function is C = 500 + 0.8Yd. Then, autonomous consumption is ____________.Find the average propensity to consume and consumption is given as $1300 and income is given as $1500...
- Calculate the value of average propensity to save when savings is given to be as $400 and income is $1100“Permanent Income of consumption is just the average of all current and future incomes. Thus, one does not need to do the maximisation of intertemporal utility”. True or False. Discuss according to the model. Note that you need to discuss according to the model?Assume a model economy with the following parameters: C= 100+0.25Yd I=100+0.5Y-3000i G=125 T=100 (M/P)d= 6Y-24000i (M/P)s=4500 Derive the IS and LM relation