Discuss the economy of hicksonnia

Assignment Help Macroeconomics

Reference no: EM133597368

Assignment:

1. Consider the economy of Hicksonnia.

(a) The consumption function is given by C=300+0.7YD

Where YD is a disposable income defined as

YD = Y - T

T = 0.2Y

Investment function is I = 200 - 1, 500i + 0.04Y

Government purchases is 200. For this economy, derive and graph IS curve.

(b). The money demand function in Hicksonia is

Md P = 0.5Y - 2, 000i

The money supply M is 550 and the price level P is 1. For this economy, derive and graph LM curve.

(c). Find the equilibrium interest rate i and the equilibrium level of income Y. Draw your results.

(d). Suppose that government spending is raised to 300. How much IS curve shift? What are the new equilibrium interest rate and level of income? Draw your results.

(e). Suppose instead that money supply is increased to 600. How much LM curve shift? What are the new equilibrium interest rate and level of income? Draw your results.

Reference no: EM133597368

Questions Cloud

Describe the conflicting roles of the global hr professional : Describe the conflicting roles of the global HR professional and based on what you have learned from the readings make recommendations for de-confliction.

What can be said about the compensation offer made : She was ready to sign when an attorney contacted her and told her that her compensation was significantly less than male employees with her knowledge

Discuss when introducing change : Discuss when introducing change or corrective action is essential during a project's lifecycle. What are the common triggers or indicators that suggest change

Define the three high-level risk assessment tools : Define the three high-level risk assessment tools, which are risk framework, risk complexity index, and risk assessment grid. Take one of these and apply

Discuss the economy of hicksonnia : Suppose that government spending is raised to 300. How much IS curve shift? What are the new equilibrium interest rate and level of income?

Describe the importance of project scheduling : Describe the importance of project scheduling and to assist in the development of the WBS. Explain the major components of the project schedule and some

Analyzing the business case : Make an Organization Chart for Appliance Warehouse 2. Make a SWOT analysis 3. Revise the Appliance Warehouse Mission statement

How should eric convince juanita of importance of investing : The language training is vital to success. How should Eric convince Juanita of the importance of investing in better language training for expatriates?

What are the key features of a good project charter : What are the key features of a good Project Charter? How does it set up a good project plan? How can it be utilized to enable successful project kick-offs

User Account

All Pages