Why is the interest rate irrelevant in the one-period general equilibrium model? What is the mechanism for the interest rate affecting labour supply in the two period model?
Q: TRUE OR FALSE:
A: Since you have posted multiple questions, we will answer the first two questions for you. If you…
Q: Case Study: Petrol price regulation in South Africa In South Africa, government has intervened in…
A: Given information set is related to liquid fuels or oil market. It is unregulated. Prime objective…
Q: How can humanity possibly find a balance between economic growth and social justice
A: Social justice is an essential and irreplaceable component of social economic development.Reforms…
Q: 1. Suppose that the reserve requirement against deposits is 0%, but that cautious banks voluntarily…
A: Banks keeps voluntary reserves of 5% . Assets for a bank => Loans , shares /bonds , interbank…
Q: A $1-per-gallon tax on the sale of gasoline will raise the price by $1 per gallon if Select one: the…
A: Tax incidence depends on the price elasticity of demand and supply.
Q: IMPORTS (M) 16.6% 40.5% 23.8% Which of the following is CORRECT according to the above table (GDP…
A: here we find the correct option among the given options as follow:-
Q: Which of the folloving represents a change in today's banking policies that should prevent a…
A: Given, The Bank panic of 1930-1933 Between 1930-1933, more than a thousand banks in the United…
Q: Which of the following statements about sending foreign aid to low-income countries is TRUE? Group…
A: Foreign aid is any type of assistance provided voluntarily by one country to another in the form of…
Q: 14. 7-5: Income Elasticity *4* When Braxton's income decreased 20 percent (-20%), his demand for…
A: Elasticity of income is defined as type responsiveness of the quantity demand when income…
Q: The economy is also characterised by the following features; Total deposits = $250,000, Total…
A: As per the question, Total deposits = $250,000,Total currency in circulation = $45,000Total reserves…
Q: 8) Imports A) bring foreign exchange, and thus they are registered as credit in the balance of…
A: Meaning of Exchange Rate: The term exchange rate refers to the situation under which a particular…
Q: ) Suppose that the figure below shows the returns to skills in a source and destin ountry. Discuss…
A: The labor economics aspect is the investigation of the workforce as a component during the time…
Q: 3. If money is so versatile and can buy anything, why don't people demand all the money they can get…
A: Opportunity cost of holding money:- The rate of interest foregone on investment instruments, that…
Q: Which of the following is the concept of Neoliberalism? * Intensification of worldwide social…
A: Neoliberalism is a policy model that combines politics and economics, with the goal of transferring…
Q: Determine and discuss the impact of diesel prices on fuel revenues and the impact of gasoline prices…
A: In the study of economics, elasticity is used for measuring the changes in quantity demanded of a…
Q: 1. The country of Florlandia is the world’s largest producer of plants and flowers. In 2021, the…
A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…
Q: We
A: The study of the work force as a component of the production process is known as labor economics.All…
Q: hat political factors are driving the new global innovation economy?
A: Political factors include the policies and rules made by the government of the country.
Q: Identify the nature of supply relationship that nestle has tied up with the farmers in Ecuador?
A: Meaning of Microeconomics: The term macroeconomics refers to that situation under which the…
Q: Consider an increase in a country’s technology such that the relative supply of domestic products…
A: Here, it is given that a country is experiencing an improvement in the technology, which further…
Q: What type's of goods and services should the United States produce based on its comparative…
A: Comparative advantage refers to the production of goods and services at a lower opportunity cost…
Q: R,' EER' EER2 Rates of Retum (in dollar terms) O 1) a decrease in the European money supply which…
A: In the international market, the return on investment depends upon its value in the market, which is…
Q: QUESTION 11 Assuming that all the original predictions are correct ($75,000 revenue/year, Salvage…
A: Given that; A new machine is to be purchased for $200,000. It is believed that it will generate…
Q: A manufacturer has $600 to spend on the production of a certain product and knows that if "x" units…
A: We have to maximize the output given the cost constraint. Output function = 120x4/5Y1/5 Cost…
Q: Selim has no income in period 1 (consumption now) and an income of 1800Ł in period 2 (consumption…
A: Here we find the maximum amount that Salim can borrow to spend in period 1 by the following method…
Q: Suppose the government wishes to provide college aid assistance to one of the following of high…
A: Economic aid is the unilateral transfer of resources from one economic entity (the donor) to another…
Q: Rational Ignorance (per Anthony Downs) implies that voters will. O Essentailly flip a coin when…
A: When the perceived expense of educating oneself on a topic outweighs the predicted potential…
Q: Imagine the government wants to conduct an expansionary fiscal policy and needs an expert to answer…
A: Marginal propensity to consume shows how consumption changes as income changes. It is the ratio of…
Q: Describe the present day global innovation economy
A: The economy of a country means its economic position. A good economy means that the country gains…
Q: If Y =C+I+G C = 120 + 0.5 (Y-T) I= 100 -10r G = 50 T=40 What is an IS Curve? What factors…
A:
Q: How are social factors affected by the new global innovation economy
A: The most recent buzzword is innovation. Many individuals have high aspirations for technological,…
Q: QUESTION 4 Monetarization of economy spurred the progress of science, e.g. the Enlightenment and the…
A: Monetization of an economy refers to the structural change of an economy from barter system to money…
Q: Climate change and externalities. a. How is the issue of climate change related to the concept of…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: At 7.2%, a bridge cost P 280M with a life of 20 years. The bridge must be partially rebuilt at a…
A: Investors can use capitalized value to determine the price of a possible investment. Capitalized…
Q: Economics as a course is referred to as "Social Science". Is the term used, Social Science, valid?
A: Economics is considered as science, arts as well as social science based on its characteristics and…
Q: 1. Suppose that a bank’s customer deposits $20,000 in her checking account. The required reserve…
A: Bank Deposit = 20000 Required Reserve Ratio = 0.125 A bank after keeping certain portion of…
Q: n experiment can result in any of the outcomes 1, 2, or 3. (a) If there are two different wagers,…
A: The first matrix is R matrix which shows three possible outcomes across two wagers. The second…
Q: Suppose Spectrum is the only cable TV provider in a city. The table below shows the market demand…
A: Monopoly is a form of market structure in which a single firm sells a commodity for which there are…
Q: What level of responsibility does the developed world have to promoting development for the…
A: While governments in developing countries struggle to enhance the living conditions of their…
Q: 14) The A) increase; rigid C) decline; flexible in employment during a recession is smaller if wages…
A: Recession refers to the period of economic downfall.
Q: Gendered Economic Geography mainly focuses on the gendered nature of the workforce, emphasizing how…
A: Gender equality would mean treating males and females same, as women also had right to be part of…
Q: Efficient
A:
Q: Gestalt, Inc. uses a kanban system in its automobile production facility in Germany. This facility…
A: Manufacturing, supply chain management, and project management are evaluated at the pre-processing,…
Q: The long-run Phillips Curve describes: The relationship between unemployment and inflation after…
A: The economies around the globe are involved in various types of economic, as well as financial…
Q: Evaluate the impact of TRAIN Law in the Philippine Economic Development using the…
A: A SWOT analysis basically refers to a strategy that is used for evaluating these four areas of your…
Q: How much money shoid be deposited annualy in a bank account for five years you wish to witdrew…
A: Answer;
Q: The table below shows the payments received from foreigners by the residents of the US and the…
A: Balance of payment Balance of payment is a statement of the country which records the Nation's…
Q: Why might the problem of raprd urbonization signiticont Population Poltey cuntailing POpulathon…
A: In the future, the majority of the world's population is predicted to reside in cities. Even if…
Q: 5. The physical life is always greater than all the other “life" factors under replacement analysis.
A: Physical life of an assets is the full life span of an asset, where market value of assets is 0 that…
Q: What do governments typically care about as "benevolent planners"? Question 3 options: Both…
A: When talking about a benevolent planner, he is the person or an institution that works to improvw…
Why is the interest rate irrelevant in the one-period general equilibrium model? What is the mechanism for the interest rate affecting labour supply in the two period model?
Step by step
Solved in 3 steps
- Describe the neoclassical model of labor -leisure choice model by emphasizing the objective function, constraint and optimality conditions?What are the endogenous variables in the labor market model?in the McCall partial equilibrium model, if unemployed individual can only live for 10 periods. In each period, she will receive $400 if unemployed. The offered wage is uniformly distributed in the range of [500,1000] 1.what will the reservation wage be in the period 9 if the discount rate is 0.9? 2.what will the reservation wage be in the period 8 if the discount rate is 0.9?
- what happens in the work-leisure model, when the wage rate is decreasing and income effect is stronger than substitution effect?Consider now the two-period model in general equilibrium, so that prices, investment and labour supply are endogenous, i.e. the production economy. Analyse and carefully explain graphically and in words the general equilibrium effects of a decrease in TFP(total factor production) for a benchmark economy with no frictions.Analyse how a Neoclassical version of the labour market would indicate that, in equilibrium, all unemployment is voluntary, and how, assuming imperfect competition instead, would account for the existence of some involuntary unemployment.
- During the great recession Obama administration had instituted a social security payroll tax break: in 2011-12 employees paid 4.2% of their paycheck to the social security fund. In January 2013 the break expired, and now employees pay 6.2% of their paychecks in social security taxes. How would you graphically model such a change using the labor-leisure model?… as a change in budget constraint or preferences? Illustrate. What prediction can we make with regards to hours worked as a result? Depending on your answer, which effect will dominate-income or substitution, that will affect the hours decision? Income support programs, (only if we discussed the TANF program in class). In 2005 North Carolina Temporary Assistance for Needy Families program, known as Work First, had the following features: Maximum monthly benefit (income guarantee), G, $272; Level of disregard. D, $0; Implicit tax rate 27.5%; How does the availability of the welfare program affect a family’s…When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium—back to full employment. Orthodox economists cite two mechanisms that cause the adjustment. Explain each of these.Determine how the following affect the slope of the output supply curve and explain your results. The inter-temporal substitution effect of the real interest rate on employment in the labor market increases.
- Consider the following model of a competitive labour market where both firms and workers have perfect foresight and symmetric information about the price level (that is, no misperceptions). Firms' technology is given by the production function y = a N ½ (production function) where a is a positive constant representing total productivity, N is employment and the elasticity of production to employed labour is 1/2. The government requires firms to pay pension contributions to the fiscal authority: the contribution is a small fraction x of the wage paid to each employed worker. Therefore, firms profits equal P y - W N - x W N and they are maximized taking the price level P, the nominal wage W, and the pension contribution rate x as given. Labour supply is given by: W = P b N where b is a positive constant. Answer all the following questions. a) Derive the labour demand schedule by solving the profit maximization problem of firms.Describe how workers and firms “marry” each other in the labor market when there are many types of jobs offering various levels of risk to their workers. What does the slope of the hedonic wage function measure?The labor market model (II): Now we add some parameters to the labor market model: labor supply: Ls = × w + labor demand: Ld = - w The parameters in this setup are , , and . (Notice that parameters are denoted with an overbar, a convention we will maintain throughout the book.) The parameter represents the number of hours workers would supply to the market even if the wage were zero; it therefore reflects the inherent amount of time people like to work. The parameter , in contrast, reflects the amount of labor the firm would like to hire if the wage were zero. It might be thought of as some inherent capacity of the firm (perhaps because the firm owns a given amount of land and capital that cannot be altered). (a) What is the economic interpretation of ? (b) What are the endogenous variables in this model? (c) Solve for the equilibrium of the labor market. That is, solve for the endogenous variables as a function of the parameters of…
