Which of the following is true about the dynamic stability of the following nonlinear differential equation? ý = y +4y +3 a) O y=-1 is stable and y=-3 is unstable b) y=-3 is stable and y=-1 is unstable y=-2 is stable and y=-1 is unstable d) y=3 is stable and y=1 is unstable
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- For a competitive equilibrium in a two-period model, must there be an equal amount of borrowing and lending?A key skill in economics is the ability to use the theory of supply and demand to analyse specific markets. In this assignment, you get a chance to demonstrate your ability to analyse the effects of several “shocks” to the market for coffee. Answer all parts of each of the scenarios below. Suppose the National Institutes of Health publishes a study finding that coffee drinking increases the probability of getting colon cancer. How do you imagine this will affect the market for coffee? Why? Which determinant of demand or supply is being affected? Show graphically with before- and after-curves on the same axes. How will this change the equilibrium price and quantity of coffee? Explain your reasoningSuppose the aggregate price level has decreased, but workers did not notice this initially. Suppose the supply curve of labor initially looked as follows. According to our self-correcting model, once workers notice that the aggregate price level has decreased, Group of answer choices a) the SL curve will increase (shift right). b) none of the other options. c) the SL curve will decrease (shift left). d) nothing will happen to the Supply of Labor (SL) curve. e) the equilibrium wage level, W, will rise.
- Let the demand and supply be Qd = a - bP - cdP/dt and Qs =dP where a, b, d, c > 0. a) Assuming that the market is cleared at every point of time, find the time path P(t) (general solution). b) Does this market have a dynamically stable intertemporal equilibrium price?Q25. Given demand and supply for the Cobweb model as follows, find the intertemporal equilibrium price, and determine whether the equilibrium is stable; (i) Qdt = 18-3P Ost = -3 +4Pt-1 (ii) Qdt = 22-3P Qst = -2 + Pt-1Carefully examine and discuss the major differences of the Mundell Fleming Model in the short run as opposed to in the long run. Thereafter, analyse the impact of these differences on the Model. (provide graphical illustrations where needed)
- Compare the effects of a change in money supply and technology in a model with fully sticky prices and partially sticky prices. Describe the dynamics that makes the model move from a short run equilibrium to a long run equilibrium. How would your answers be different if the model had perfectly flexible prices. Why short run equilibrium output level is not efficient? Give proper economic reasoning.True/ False Macroeconomics deals with the study of Cotton textile industry.What are the limitations of Samuelson general equilibrium model
- Assume the following model of the closed economy in the short run, with the price level (P) fixed at 1.0: C=0.5(Y-T) T=1000 I=1500-250r G=1500 Md/p=0.5Y-500r Ms=1000 a) Derive a numerical formula for the IS curve, showing Y as a function of r alone. B)Derive a numerical formula for the LM curve, showing Y as a function of r alone. C) What are the short-run equilibrium values of Y, r, and national saving (S)?d)Assume that G increases by 1,500 (i.e., G = 3; 000). By how much will Y increase in short-run equilibrium? e)You are the chief economic adviser in this hypothetical economy. Do you believe that fiscal policy is more potent than monetary policy? Briefly discuss f)Derive the numerical aggregate demand (AD) curve for this economy, expressing Y as a function of PUsing the one factor Ricardian model concept and the unit labor requirements information in the table below, determine a) What is the opportunity cost of domestic and foreign Cheese production?b) What is the opportunity cost of domestic and foreign wine production?c) In which commodity production, domestic has a comparative advantage.Explain.d) In what commodity production, foreign has a comparative advantage.Explain.e) Which country has an absolute advantage. Explainf) If PC is the price of Cheese and PW is the price of Wine, and PC = PW, thenWhat commodities will domestic specialize in?g) If PC is the price of Cheese and PW is the price of Wine, and PC = PW, thenwhat commodities will foreign specialize in?h) Using the comparative advantage information above, determine the commodity thatexported and imported by domestic and foreign respectively?i) If PC = PW or PC/PW = 1, what is the gain from trade obtaineddomestic and foreign if each country specializes inwhich production has a…Consider again the canonical OLG model with log preferences and a Cobb-Douglas production function, but assume that individuals now work in both periods of their lives. (a) Define a competitive equilibrium and the steady-state equilibrium. (b) Characterize the steady-state equilibrium and the transitional dynamics in this economy. (c) Can this economy generate overaccumulation?