Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Given the fundamental Keynesian three-sector model:

Y = C + I + G i = interest rates

where C = a + bYdY = aggregate income and I = f ( i …) but I ≠ f (Y f = is a function of with G = Go and Tx = Txo

problem 1: Suppose: C = 20 + .75Yd

Now suppose that government spending is increased by $12 billion. That would (increase or decrease) the level of income by how much?

problem 2: Suppose: S = -35 + .25Yd

Now assume that the taxes are cut by $15 billion. That would (increase or decrease) the level of income by how much?

problem 3: Suppose: C = 42 + .8Yd

Now increase taxes and government spending (simultaneously) by $33 billion. That would lead to a (decrease or increase) of __________ billion in the level of income

problem 4: Suppose: C = 20 + .7 Yd

Now cut taxes by $20 billion. This would have the effect of shifting the consumption function (upward or downward) by _________ billion. (Think Keynesian cross model)

problem 5: Suppose that the current level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential to raise the level of aggregate income to $760 billion. Suppose that S = -25 + .2Yd. How much would government spending have to be increased in order to accomplish the desired outcome?

problem 6: Suppose that the current level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential to raise the level of aggregate income to $760 billion. Suppose that S = -25 + .2Yd. How much would taxes have to be cut in order to accomplish the desired outcome?

problem 7: Given a saving function of S = -25 + .2Yd, a $10 billion increase in government spending will bring about how many dollars of change in the consumption?

problem 8: Now, let us modify our model a bit. Let’s add a fourth sector of spending so that Y = C + I + G + Xn with X = Xo and M = M = f (Y). Will this change, by itself, increase, decrease or not affect the magnitude of the government spending multiplier? Describe!

problem 9: Thinking about modifications in the model again: Go back to the original model again, however add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is defined as ΔI/ΔY and has a positive value. Will this increase, decrease or not affect the value of the government expenses multiplier? Describe.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91337

Have any Question? 


Related Questions in Microeconomics

Assignmentfor this assignment write a paper describing how

Assignment For this assignment, write a paper describing how an analysis of intrusion signatures could be conducted for your project organization. Include the following in your paper: • A description of signature analysi ...

Assignmentbliss v attorney general of canada was a canadian

Assignment Bliss v. Attorney General of Canada was a Canadian Bill of Rights case. Stella Bliss' claim for maternity benefits (under the former Unemployment Insurance Act) as a form of "equality before the law" was rejec ...

The economy is full employment now the government wants to

The economy is full employment. Now the government wants to change the composition of demand toward investment and away from consumption without, however, allowing aggregate demand to beyond full employment. What is requ ...

1 this question is for discussion in teamsas the semester

1. This question is for discussion in teams. As the semester progresses. we will discuss these issues in class. Visit The World Factbook at https://www.cia.govlibrarypublications:The-world-factbook'. In "Please select a ...

Assignmentlinking questions 51 which one of the generic

Assignment Linking questions 5: 1. Which one of the generic competitive strategies best characterize your company's strategic approach to competing successfully? 2. Which athletic footwear companies in your industry appe ...

Here is a link to the pdf version of dan ariellys

Here is a link to the pdf version of Dan Arielly's Predictably Irrational. http://radio.shabanali.com/predictable.pdf The Table of Contents starts on page 11. Scan through it and choose a chapter that looks interesting. ...

Short paperthus far in the course the primary focus has

Short Paper Thus far in the course, the primary focus has been on hospitals within the healthcare industry. For this short paper you will consider the economic issues related to long-term care facilities. In this assignm ...

Assignment economics read the following case study and

ASSIGNMENT: ECONOMICS Read the following case study and answer the given question. THE MACROECONOMICS OF POVERTY REDUCTION: THE CASE STUDY OF BANGLADESH Adapted: Osmani, S.R; Mahmud, W; Sen, B; Dagdeviren, H; and Seth, A ...

Question 1the document that lists and details the contents

Question 1 The document that lists and details the contents and conditions of a shipment is called: A. The Tariff B. Proof of Delivery C. The Invoice D. The Bill of Lading Question 2 Declining transport rates as the quan ...

Article analysisplease choose an article from the wall

Article Analysis Please choose an article from the Wall Street Joumal, The Economist, Bureau of Labor/Statistics, Bureau of Economic Analysis etc... or any peer reviewed article for the UOP library. Select one subjects f ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen