Autonomous consumption and government spending

Assignment Help Business Economics

Reference no: EM13984164

Given the following model: Y = C + I + G + (X-M) Question 1 Suppose that: Autonomous Consumption = $500 MPC = 0.75 Taxes = $400 Investment = $500 Government Spending = $1200 Exports = $300 Imports = $500 Find the following: A. Equilibrium income B. Equilibrium consumption C. Equilibrium saving D. Write the savings function E. Show that injections equal withdrawals

Question 2 Suppose that full employment GNP (FE Y) is = 4000 (2 points each) A. Explicitly find the necessary change in G to get the economy to full employment GDP. B. Explicitly find the necessary change in Taxes to get the economy to full employment GDP.

Given the position of the economy in question one and that full employment GDP = 4000 explain how the following monetary policies would get the economy to full employment GDP (1.5 point each) A. Open market operations B. Discount rate C. Federal funds rate D. Required reserve ratio

Reference no: EM13984164

Questions Cloud

The demand schedule : The demand schedule for JK Rowling's book is Q=3000-100P. The cost of having the book typeset is $10,000 and then the cost of printing each copy is $4. How many copies should JK Rowling print?

Solow growth model with exogenous technological progress : The steady state of the Solow growth model with exogenous technological progress and Cobb-Douoglas technology predicts that the real rental rate (ie: the price) of capital will not exhibit long run growth if the capital input market clearing conditio..

Supply-side economists and monetarists : When Bill Clinton took office in January 1993, he faced two major economic problems: a large federal budget deficit and high unemployment resulting from a very slow recovery from the recession of 1990 to 1991. Some said at the time that without the F..

Autonomous consumption and government spending : Given the following model: Y = C + I + G + (X-M) Question 1 Suppose that: Autonomous Consumption = $500 MPC = 0.75 Taxes = $400 Investment = $500 Government Spending = $1200 Exports = $300 Imports = $500. Suppose that full employment GNP (FE Y) is = ..

Core competencies and porters competitive force model : Explain how information systems help companies develop competitive strategies using the Value Chain Model, the concept of synergies, core competencies, and Porters Competitive Force Model.

Depicted by a downward-sloping demand curve : In order to be a successful price discriminator, a provider must have a degree of market power (depicted by a downward-sloping demand curve) and meet what other condition(s)? Prospective customers must be categorized according to willingness-to-pay.

Monetary and fiscal policy in an effort to stabilize economy : Should the government use monetary and fiscal policy in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economi..

Calculate the elasticity of demand for each market : Suppose a monopolist sells in two distinct markets. The demand for the first mar- ket is given by P1 = 240 − 2Q1 , where Q1 is the quantity demanded and P1 is the price paid by the first group. How much does the monopoly supply in each market and wha..

User Account

All Pages