User Account

All Pages

Find the equilibrium levels of exchange rate

Assignment Help JAVA Programming
Reference no: EM133215153

A small open economy can be described by the following equations:

DD equation: Y = 8000 + G - 600P + 200E

AA equation: Y = 500 + 2(MS/P) + 80Ee - 40E

Full-employment output: YFE = 8000

Note: Exchange rate is quoted as EDC/FC. Keep your answer to two decimal places if needed.

a) In the initial long-run equilibrium, the government collects 15% of long-run output as taxes and runs a budget deficit of 400, while the central bank sets the level of (nominal) money supply to 33100. Find the (long-run) equilibrium levels of exchange rate and aggregate price if the expected exchange rate (Ee) is 22. 

Suppose the economy is initially in its long-run equilibrium as described in part (a). Due to recent drop in house prices, households change their spending habits such that for any given level of exchange rate the demand for goods & services changes by 400. At the same time, the government increases its spending by changes 80. In addition, the (combined) permanent shocks will cause the expected exchange rate to change by 0.8 DC per FC.

b) If the economy adopts a flexible exchange rate and the changes are short-lived, find the short-run equilibrium levels of output and exchange rate. 

c) (Continued from part b). Suppose the central bank finds the change in output in part (b) undesirable and wants to keep it at the full-employment level via a (temporary) change in monetary policy. Find the level of money supply that would achieve this goal. 

d) If the economy adopts a flexible exchange rate and the changes are long lasting, find the short-run equilibrium levels of output and exchange rate. 

e) Instead of adopting flexible exchange rate, the economy adopts a fixed exchange rate and the official rate is set at the one calculated in part (a). In addition, the fixed exchange rate is maintained by a change in real money supply. Answer the following questions:

  • If the changes are short-lived, find the short-run equilibrium levels of output and real money supply.
  • If the changes are long lasting, find the short-run equilibrium levels of output and real money supply.

Reference no: EM133215153

Questions Cloud

Explain three of most important personality characteristics : Based on your type profile, identify and explain three of your most important personality characteristics. Provide examples that demonstrate your unique qualiti
How would you also use socio-cultural theory in program : How would you also use socio-cultural theory in this program and you were designing an infant/toddler program based on constructivist theory of cognitive
The world largest debtor : In the Theory to Application article "The World's Largest Debtor," we learn how the United States went from the largest creditor in the world to the largest deb
What does the positive result means : What does the positive result means and What type of antibodies were most likely tested in this screening
Find the equilibrium levels of exchange rate : a) In the initial long-run equilibrium, the government collects 15% of long-run output as taxes and runs a budget deficit of 400, while the central bank sets th
What we would expect to observe under a given set : One method that biologists use to conduct research is by collecting experimental data through statistical hypothesis testing. Statistical hypotheses
Examples of expansionary fiscal policy in action : There are many examples of expansionary fiscal policy in action, that place you answer the question "With that in mind, should governments implement expansionar
Does this deficit financing lead to debt : Does this deficit financing lead to debt? What is debt? What is a deficit? And do these things have different outcomes for individuals and nations?
Should governments implement expansionary fiscal policy : During the COVID recession, many governments implemented an expansionary fiscal policy to prevent deep recessions with uncertain long-term consequences.

Reviews

Write a Review

JAVA Programming Questions & Answers

  Recursive factorial program

Write a class Array that encapsulates an array and provides bounds-checked access. Create a recursive factorial program that prompts the user for an integer N and writes out a series of equations representing the calculation of N!.

  Hunt the wumpus game

Reprot on Hunt the Wumpus Game has Source Code listing, screen captures and UML design here and also, may include Javadoc source here.

  Create a gui interface

Create GUI Interface in java programing with these function: Sort by last name and print all employees info, Sort by job title and print all employees info, Sort by weekly salary and print all employees info, search by job title and print that emp..

  Plot pois on a graph

Write a JAVA program that would get the locations of all the POIs from the file and plot them on a map.

  Write a university grading system in java

University grading system maintains number of tables to store, retrieve and manipulate student marks. Write a JAVA program that would simulate a number of cars.

  Wolves and sheep: design a game

This project is designed a game in java. you choose whether you'd like to write a wolf or a sheep agent. Then, you are assigned to either a "sheep" or a "wolf" team.

  Build a graphical user interface for displaying the image

Build a graphical user interface for displaying the image groups (= cluster) in JMJRST. Design and implement using a Swing interface.

  Determine the day of the week for new year''s day

This assignment contains a java project. Project evaluates the day of the week for New Year's Day.

  Write a java windowed application

Write a Java windowed application to do online quiz on general knowledge and the application also displays the quiz result.

  Input pairs of natural numbers

Java program to input pairs of natural numbers.

  Create classes implement java interface

Interface that contains a generic type. Create two classes that implement this interface.

  Java class, array, link list , generic class

These 14 questions covers java class, Array, link list , generic class.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd