4) Suppose the economy is closed and is characterized by the following behavioral equations: C=q₂ +GY Y₂=Y-T 1=b₂ + b₂Y a. b. C. Government spending and taxes are constant. Suppose that consumers decide to consume less (and therefore to save more) for any given amount of disposable income. Specifically assume that consumer confidence () falls. What will happen to output? As a result of the effect on output you determined in part (a), what will happen to investment? What will happen to public saving? What will happen to private saving? Explain. What is the effect on consumption? Suppose that consumers had decided to increase consumption expenditure, so tha Co had increased. What would have been the effect on output, investment, and private saving in this case? Explain. What would have been the effect on consumption?

4) Suppose the economy is closed and is characterized by the following behavioral equations: C=q₂ +GY Y₂=Y-T 1=b₂ + b₂Y a. b. C. Government spending and taxes are constant. Suppose that consumers decide to consume less (and therefore to save more) for any given amount of disposable income. Specifically assume that consumer confidence () falls. What will happen to output? As a result of the effect on output you determined in part (a), what will happen to investment? What will happen to public saving? What will happen to private saving? Explain. What is the effect on consumption? Suppose that consumers had decided to increase consumption expenditure, so tha Co had increased. What would have been the effect on output, investment, and private saving in this case? Explain. What would have been the effect on consumption?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose we start with a general equilibrium, and the economy experience an improvement in payment technology. Which of the following statements correctly describes the goods market response in the short term? 1. The IS curve remains unchanged 2. The IS curve shifts to the left 3. The IS curve shifts to the right 4. None of the above
Suppose that the economy is characterized by the following behavioral equations: C = 180 + 0.75YD | = 160 G = 160 T= 130 Equilibrium GDP (Y) = 1610.00 . (Round your response to two decimal places.) Disposable income (Yp) = |- (Round your response to two decimal places.)
Suppose that the least amount of goods and services that Jim will consume in a year is $40,000. Jim tends to save $0.30 of every dollar of disposable income that he makes. Use the given line to graph Jim's consumption function for disposable income levels between $0 and $200,000. Move each endpoint to the appropriate spot on the graph.
Suppose the economy is characterized by the following behavioral equation: Y = C + I + G + (X-M) Equilibrium condition C = 2000 -f' 0.75Yd Consumption equation I = 4000 Investment expenditure G = 4100 Government Expenditure X = 2800 Export M = 400 + 0.25Y Import equation T = 100 + 0.3Y Tax equation Yd = disposable IncomeRequired: Derive Balance of Payment (BP) curve and explain why it slopes upwards Compute equilibrium national income and Imports for the economy. Differentiate between the closed-economy model and the open economy model
3. Consider a parent who is altruistic towards her child, but also cares about her own consumption. The parent's utility over her own consumption and that of her child is up = log(co) +a log(ci) where c is the child's consumption, and a > 0 is the degree of parental altruism. Suppose that the parent can invest in the child's human capital by spending money (e) on her education; education generates human capital h /() and human capital is paid at rate w. The parent has a total income of (a) Write down an expression for the child's future consumption in terms of the parent's choice of e. (b) Now write down the Lagrangian for the parent's decision problem.
Please Solve Fast All Part I give Good Feedback and Upvote. Thank you.
Suppose Bank of England is considering using the tool of cutting interest rates to boost household consumption. In this question you will be asked to use the intertemporal choice model to assess the impact of different policies on household consumption. Suppose a consumer's current income is £25,000 and their future income is £30,000, and they initially face a market interest rate of 15% on both saving and borrowing. (a) In a diagram with consumption this year (C1) on the horizontal axis and consumption next year (C2) on the vertical axis, illustrate this consumer's budget constraint (using the numerical values set above) and indicate their optimal choice by drawing a indifference curve convex to the origin, assuming that at the current interest rate it is optimal for them to save. (b) Calculate (using the numerical values set above) and interpret their marginal rate of time preference at their optimal choice. (c) Illustrate and explain how a fall in the market interest rate from 15%…
Given that the consumption function is: C = 10 + .9Y, at the level of Y = 200, we should expect the level of savings (S) to be Group of answer choices 0. a. none of the other answers are correct. b. .1 c. 10
Answer a-d. Will upvote who will answer properly
Solve all this question......you will not solve all questions then I will give you down?? upvote....
19
Answer the given question with a proper explanation and step-by-step solution. the value of a is 1334