What were the equilibrium levels of the real interest rate

Assignment Help Econometrics

Reference no: EM13244932

Due to its remoteness, Siberia can be considered as a closedeconomy. Recent data about its popula- tion movements indicate thatthe region suffered from a severe loss in its working agepopulation from 1995 to 2005. As a consequence full employmentoutput declined from Y1995 = 100 to Y 2005 =90. This question asks you to analyze the long-run implications ofdifferent fiscal policies available to Siberian officials. Theeconomy can be described as follows:

C(r) = 10 + 0.6Y -1000r (14)

I(r) = 50 -1000r (15)

G =20 (16)

(a) What were the equilibrium levels of the real interest rate,consumption and investment in 1995?

(b) In 2005 government officials consider changing governmentexpenditures in order to keep in- vestment at the same level as itwas in 1995. What must the value of G be to implement thispolicy?

(c) The second policy under consideration is to alter governmentexpenditures in order to maintain private consumption at its 1995level. What must the value of G be in this case?

Reference no: EM13244932

Questions Cloud

Socially desirable level of pollution : There are only two polluting sources in the region, each of which generates 10 units of pollution for a total of 20 units released into the environment. The government determines that emissions must be reduced by 10 units across the region to achieve..

How many photoelectrons are emitted : A beam of blue light of wavelength 500 nm has an intensity of 170 W/m^2, How many photoelectrons are emitted from the potassium plate per second

Explain what are technological applications : What are 2 technological applications of Entropy, free energy and equilibrium. and explain

What is the radius of the orbit : A positively charged He+ atom has two protons in the nucleus and one electron in the shell. In a classic model of the atom, What is the radius of the orbit

What were the equilibrium levels of the real interest rate : Due to its remoteness, Siberia can be considered as a closedeconomy. Recent data about its popula- tion movements indicate thatthe region suffered from a severe loss in its working agepopulation from 1995 to 2005.

Explain what is the molecular formula for the compound : A 1.00 g sample of a gaseous compound of boron and hydrogen occupies 0.820 L at 1.00 atm and 3 degrees C. What is the molecular formula for the compound

Determine what will be the new price level today : Assume velocity is constant, real income is constant at Y ¯= 200 and that the demand for real money balances is given by: L(i, Y ) =Y/√i (9) (a) If expected inflation is zero, the nominal interest rateis i = 0.25 and the price level..

Affect resource conservation and the speed of depletion : Affect resource conservation and the speed of depletion?

Determine the charge on each ball : Two identical small insulating balls are suspended by separate 0.23-m threads that are attached to a common point on the ceiling, Determine the charge on each ball

User Account

All Pages