What kind of output gap does this economy have

Assignment Help Business Economics

Reference no: EM131104852

Consider an economy characterized in part by the following functions:

C = 200 + 0.8Yd

AE = 600 + 0.75Y

Ye = 2400

Y* = 2240

Prices are fixed

A. What kind of output gap does this economy have? How large is this gap?

B. If the government wants to close the gap by changing autonomous taxes only, what should be the size and the direction of the change in T°? SHOW YOUR WORK

Reference no: EM131104852

Questions Cloud

What is the highest price that risk-neutral buyers : Suppose that sellers value a good car at $10,500 and a bad car at $5,500, and quality is not observed by the buyers. What is the highest price that risk-neutral buyers will offer for a used car if they ignore adverse selection when 60% of the cars ar..

The benefit of hindsight : Are there any decisions that you made, that in retrospect, you now wish you could take back? Why? With the benefit of hindsight, what would you do differently?

What extend these exceptions protect the bona fide buyer : Based on the facts above, critically discuss THREE (3) exceptions to the above maxim and critically discuss to what extend these exceptions protect the bona fide buyer.

Derive an expression for the maximum allowable amplifier : derive an expression for the maximum allowable amplifier noise figure F, assuming an amplifier gain G and a connecting line loss L. Evaluate this expression for

What kind of output gap does this economy have : What kind of output gap does this economy have? How large is this gap? If the government wants to close the gap by changing autonomous taxes only, what should be the size and the direction of the change in T°?

Seasonal factors to determine the seasonally adjusted : Figure 20.3 shows CCW's average daily call volume for each quarter of the past three years, and column F of Fig. 20.4 gives the seasonally adjusted call volumes.

Employment laws and the consequences of non-compliance : Describe three employment laws and the consequences of non-compliance. Assess how an organization might structure their policies, practices or culture to ensure compliance.

Should you consider accepting the settlement : After the case is over, the defendant's attorney calls your attorney and offers to settle the case for $7.5 million - Should you consider accepting the settlement? Explain why or why not?

Regulation of nation financial intermediaries : Explain how savers and borrowers might benefit from regulation of nation's financial intermediaries. Does regulation impose costs? How do these costs affect long-run economic development.

User Account

All Pages