Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

1. Use Okun's law to answer the problems below;

ut - ut-1 = -0.4(gyt - 3%) Assuming ut-1 = 7%

a) Compute the change in u (ut - ut-1) for each of the following values of gyt: 5%, 7%, 9%. How much has output growth increased? What happens to the change in unemployment due to this increase?

b) Compute the change in u (ut - ut-1) for each of the following values of gyt: 2.5%, 1.5% and 0. How much has output growth decreased? What happens to the change in unemployment due to this increase?

c) Compute the change in u (ut - ut-1) when gyt is 3%. What should the growth rate of output be to keep ut from changing?

2. Assume a central bank decides to increase m by 2.8%. What will be the medium run effects of this on gyt, ut and πt?

3. Taxes are affected by the level of economic activity: When output increases, tax revenues typically increase, when output falls, tax revenues fall. Suppose a balanced- budget amendment is passed by Congress, which requires that the budget always be balanced. Further suppose that economy is initially operating at its natural level of output and that the budget is presently balanced.

a.)Now assume consumer confidence declines. What effect would this have on the IS Curve (graph and describe), on AD curve (graph and describe), output, tax revenues and on the budget?

b) Given that we now have a balanced- budget amendment, what would policymakers have to do in this situation?

c) Based on your answers in "a" and "b", what effect does existence of a balanced-budget amendment have on the output effects of any shock to aggregate demand?

d) Based on your analysis in problem "c", what happens to fluctuations in output caused by shocks to aggregate demand in presence of a balanced-budget amendment?

4.  Suppose B, G and T are in real terms (and in billions of dollars).

Bt-1 = 1000      Gt= 220           Tt= 200            it = .15    πt = .10

a)  Compute the official measure of the deficit in year t.

b)  Compute the correct (i.e. inflation adjusted) measure of deficit in year t.

c)  Compute the primary deficit in year t.

d) Discuss what happens to the primary deficit in year t if the nominal interest rate in year t increases to 17%.

e) To what extent does the official measure of the deficit overstate correct measure?

f) Given the above information, what will happen to the level of debt between years t-1 and t? Describe

5. Use the information provided in problem #4 to answer this problem.

a) What should happen to taxes in year t for the primary deficit to be zero?

b) What should happen to taxes in year t for the debt to remain constant between years t-1 and t?

c) What should happen to taxes in Year t for the debt to be fully repaid?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92017

Have any Question? 


Related Questions in Microeconomics

Microeconomics assignmentquestion 1 - read attachment

MICROECONOMICS ASSIGNMENT Question 1 - Read Attachment 1 Answer the following questions. Use diagrams where appropriate. [Assume that the Australian grape and wine industries are perfectly competitive markets]: Use deman ...

Three paragarphs economicswrite 3 paragraphs answering the

Three paragarphs Economics Write 3 paragraphs answering the following questions: 1. How does each of the following relate to the financial crisis of 2007-2008: declines in real estate values, sub-prime mortgage loans, an ...

Introduction to economic evaluation of health promotion

Introduction to Economic Evaluation of Health Promotion Interventions Assignment Evaluating Cost-effectiveness using Markov cohort models: The HPV case The goal of this assignment is to provide students with applied prac ...

Assignmentselect and review an inspection report posted on

Assignment Select and review an inspection report posted on the OSHA website. The inspection reports can be searched by industry group or establishment name by accessing the reports through the OSHA's Statistics & Data P ...

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 ...

Economics problemsconsumer demand analysis and estimation

Economics Problems Consumer Demand Analysis and Estimation Applied Problems Please complete the following two applied problems: Problem 1: Patricia is researching venues for a restaurant business. She is evaluating three ...

Assignment emerging economies and Assignment: Emerging Economies and Globalization

Assignment: Emerging Economies and Globalization Background Markets in developed economies are approaching saturation level. Therefore, MNCs are searching for new untapped markets in emerging countries such as India and ...

Micro economics paperyou have been given the responsibility

Micro Economics Paper You have been given the responsibility of working with your organization's CEO to do a competitive market analysis of the potential success of one of their existing products. Select your organizatio ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Feeding america final milestonein this assignment you will

Feeding America Final milestone In this assignment, you will demonstrate your mastery of the following course outcomes: - Evaluate management strategies and organizational structures of not-for-profit organizations for t ...

  • 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