What is nurds equilibrium evel of income

Assignment Help Business Economics

Reference no: EM1320617

Q. Assume that in 2008, the subsequent prevails in the republic of Nurd: Y=$200 G=$0 C=$160 T=$0 S=$40 I=(planned)=$30 Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC+.8 also MPS=.2. That is, C=.8y also S=.2y

a. Is the economy of Nurd in equilibrium? Illustrate what is Nurd's equilibrium evel of income? Illustrate what is likely to occur in the coming months if the government takes no action?

b. If $200 is the full employment level of Y, illustrate what fiscal policy might the government follow if its goal is full employment?

c. If the full employment level of Y is $250, illustrate what fiscal policy might the government follow?

d. Assume Y=$200, C=$160, S=$40, an I=$40. Is Nurd's economy in equilibrium?

e. Starting with the situation in part d, Assume the government starts spending $30 every period. If I remain constant, illustrate what will occur to the equilibrium level of Nurd's domestic product(Y)? Illustrate what will the new levels of C also S be?

f. Starting with the situation in part d, Assume the government starts taxing the population $30 each year without spending anything also continues to tax at that rate every period. If I remain constant, illustrate what will occur to the equilibrium level of Nurd's domestic product (Y)? Illustrate what will be the new levels of C also S? Elucidate how does your answer to part of differ from you answer to part e? Why?

Reference no: EM1320617

Questions Cloud

Find probability that 1 card is king and 2 card is a queen : Find the probability that the first card is a king and the second card is a queen.

Testing difference between two population means : Do the thinner cans appear to be strong enough so that they are not crushed when the top lids are pressed onto the sides?

Implementing the transactions using sql : Write down the complete transaction utilizing the SQL. Write down the full transaction log

Finding probability that lot will be rejected or accepted : If a lot is known to contain 10% defective items, find out the probability that lot will be rejected? Accepted?

What is nurds equilibrium evel of income : Illustrate what is Nurd's equilibrium evel of income. Illustrate what is likely to occur in the coming months if the government takes no action.

Identify null-alternative hypothesis-test statistic : Test the given claim. Identify the null hypothesis, alternative hypothesis, test statistic, P-Value or critical value(s), conclusion about the null hypothesis, and final conclusion that addresses the original claim.

Distinguishcrowding-out effect also the ricardo barro effect : Distinguish between the crowding-out effect also the Ricardo Barro effect. Elucidate how are the 2 effects related

How changes in government spending also taxes positively : Elucidate how changes in government spending also taxes positively do or negatively affect the economy's production also employment.

Securing the web passwords : Describe how the Web passwords can be more secure. Give examples and/or details in order to support your ideas.

User Account

All Pages