Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

Consider a closed economy, where the price level P is constant and equal to 4.You are given the following additional information:

C = 1,000 + 0.8(Y - T)
T = 0.25Y - 100
I = 3,000 - 1,000r
G = 500
L = 20,000r
M = 6,400

A.What is the equilibrium level of income? What is the equilibrium level of the interest rate? Explain how you obtained your answers.

B. The public increases its demand for money such that L = 30,000r. The Bank of Canada responds by increasing the money supply such that M = 9,600. What is the equilibrium level of income? What is the equilibrium level of the interest rate? Explain how you obtained your answers.

C. Compare the equilibrium level of income for Part A with the equilibrium level of income for Part B. Explain why this result has occurred.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91234744

Have any Question?


Related Questions in Microeconomics

Question suppose there is a pure exchange economy with two

Question: Suppose there is a pure exchange economy with two goods, A and B. The utility function for consumer i is U(A,B) = A 1 0.5 B 1 0.5 . The utility function for consumer 2 is U(A,B) = A 2 0.25 B 2 0.75 . Consumer 1 ...

Question bull this assignment must be submitted on

Question: • This Assignment must be submitted on Blackboard (WORD format only) via the allocated folder. • Email submission will not be accepted. • You are advised to make your work clear and well-presented; marks may be ...

Question hypothesis testing z tests olae oil beauty lotion

Question: Hypothesis Testing: z Tests. Olae Oil Beauty Lotion is a skin moisturizing product that contains rich oils, blended especially for overly dry or neglected skin. The product is sold in 5-ounce bottles by a wide ...

Question using exercise sketch the effects in parts a and b

Question: Using Exercise, sketch the effects in parts (a) and (b) on a single supply and demand diagram. What prediction would you make about how the improved information alters the equilibrium quantity and price? Exerci ...

Question from 2000 to 2002 the sharp decline in capital

Question: From 2000 to 2002, the sharp decline in capital spending was almost completely matched by the sharp decline in government saving. (A) How do you think the overall economy would have responded? However, suppose ...

Question 1 how do managerial economists distinguish between

Question: 1. How do managerial economists distinguish between short and long run for business? 2. In most production processes the short run average cost of production typically drops as more is produced, but eventually, ...

Question - jiffy-pol consultants is paid 1000000 for each

Question - Jiffy-Pol Consultants is paid $1,000,000 for each percentage of the vote that Senator Sleaze receives in the upcoming election. Sleaze's share of the vote is determined by the number of slanderous campaign ads ...

Question please answer the three questions1 why after

Question: Please answer the three questions: (1) why, after pushing interest rates down for several years, is the Fed now focusing on raising them? (2) After indicating in December that further increases in the federal f ...

Question the following variant of the lets make a deal game

Question: the following variant of the Let's Make a Deal game. Again one of the three boxes contains a prize, but now there are two players, 1 and 2. Assume Player 1 picks Box A and Player 2 picks Box B. The host (who ag ...

Question suppose the full-employment level of real gdp is

Question: Suppose the full-employment level of real GDP is increasing at a rate of 3% per period and the money supply is growing at a 4% rate. What will happen to the long-run inflation rate, assuming constant velocity? ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved