answer only question 6 pls Suppose that the production function for the economy is given by:Y = AL/3K/3Suppose that this economy has 1,000 units of Labour, and 125 units of capital, and TFP (A) isequal to 10.The Short-Run Aggregate Supply Curve (AS) here is given by:Y = 5pAnd when we consider the AEF at a price level of $1,400, the main components of it (C, I, & G)are given by (we are assuming a closed economy NX = 0):C = 300 + 0.8YI = 300G = 2001. What is potential GDP in this question (Y*)? Show your work.Suppose also that for any $10 decrease in price, desired consumption will increase by $5.2. Write down the equation for the Aggregate Demand Curve (AD) in the form ofY = a + bp. Show your work.3. What is the current Short-Run Equilibrium value for Real GDP (Y) and the price level (p)?Show your work.4. Draw the AD, AS, and LRAS curves. Label all x-intercepts and y-intercepts. Are wecurrently in an Inflationary Gap, Recessionary Gap, or in Long-Run Equilibrium? How doyou know? Now suppose that the Central Bank has set the current Money Supply to be equal to $8,000.This Money Supply is currently made up of $2,000 of printed currency, and $6,000 of BankDeposits. The current mandated reserve ratio is 10%.The Demand for Money (MD) as a function of the interest rate ("i") is given by:1MD = 20,000 – 1,000i5. Draw the MS and MD curves in a single figure. Label all x-intercepts and y-intercepts.Where is the equilibrium in the money market? Given this, what is the current prevailingmarket interest rate (i*)?Now suppose that there is an increase in autonomous consumption of 180.6. What will be the new short-run equilibrium Real GDP in this case? Are we in aninflationary gap or output gap now? How large is it? Show your work.Finally, suppose that for every 1% decrease in the interest rate, Desired Consumption willincrease by $25 and Desired Investment will increase by $25.The Central Bank wants to close this output gap.7. If the Central Bank wants to close this gap by changing the Money Supply in circulation,how much does the MS need to change to close this gap? What is the new interest rate?Show your work.8. Suppose instead that the Central Bank wants to reduce the money supply by raisingreserve requirements instead. How much does it need to raise the reserve requirementsto close this gap? Show your work. For the purposes of the next questions, the First MDCurve is as before:MD = 20,000 – 1,000iAnd the Second MD curve a new MD curve:MD = 20,000 – 400i

Output gap is the difference between potential output and actual equilibrium output.

Answered: 6. What will be the new short-run…

6. What will be the new short-run equilibrium Real GDP in this case? Are we in an inflationary gap or output gap now? How large is it? Show your work.

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

Ca = 40 + 0.80 (Y-T) Ig = 30 Xn= 10 T=20 G=20 DI-Y-T
s EconomicsQ&A LibraryEach term (3 months) the current group of economics students completed a questionnaire as to how much they would spend on new purchases compared to how much they would save/pay off bills, if they suddenly and unexpectedly received a check for $1,000. The average MPC is shown in the table below. Month in which student poll was taken Average of students’ responses as MPC March 0.41 June 0.30 September 0.22 December 0.56 What do these MPC’s imply about the students’ thinking over the course of the year? (Enter response here.) What is likely happening in the economy during the same period of time? Each term (3 months) the current group of economics students completed a questionnaire as to how much they would spend on new purchases compared to how much they would save/pay off bills, if they suddenly and unexpectedly received a check for $1,000. The average MPC is shown in the table below. Month in which student poll was taken Average of students’…
Calculate the coefficient of variation for the following sample data: 10 8 11 7 9
Focusing on government spending as a percentage of GDP in the U.S., we observed that between 1820 and 1929 the: minimum value was 3.13%; mean value was 6.83%; and maximum value was 29.03%. In contrast, between 1930 and 2021 , the a) None of the above answers are correct. B) maximum value was 10.94%.c) minimum value was 2.12%. D) mean value was 30.56%. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
9
The questions has two parts: A departmental store sells stereo systems, television sets and radios. The percentage distribution of the total sales volume (in rupees) is estimated as 30 per cent stereos, 50 per cent televisions and 20 per cent radios. The prices of one stereo, one television and one radio in 1990 were $ 20,000, $15,000 and $ 500 respectively while their respective prices in 1995 were $25,000, $ 20,000 and $ 800. A weighted price index for 1995 with base 1990 is to be computed. (i) Which index number formula is appropriate, why? (ii) Compute the index.
The measurement of the number of people who are willing to work, capable of working, and who have jobs that fit their skills is called:
1- If more then one sample is selected from the universe, these samples should be (heterogeneous or homogeneous).
An economist compiled data on productivity improvements last year for a sample of firms producing electronic computing equipment. The firms were classified according to the level of their average expenditures for research and development in the past three years. The results of the analysis of the study were as given below: Source of variation d.f Sum of squares Mean Sum of squares 2 23 groups error total 16.623 B 30.678 A с
In a sample of 20 students, 7 are economics majors, 4 are psychology majors, 6 are math majors and 3 are English majors. What is the relative frequency of English majors? Group of answer choices 0.20 3 4 0.15 thanks
Complete the following worksheet and then use it to calculate the coefficient of determination. (9,- y)²2 8.210 8.210 3.688 ŷ 19.232 19.232 18.287 18.287 60 19.5 17.342 6 60 19 17.342 7 65 15.5 16.397 16.397 15.452 15.452 13.562 13.562 11.672 1 2 50 21 3450 00 Z; 3/4 50 20 8 55 19 55 19.5 65 15 9 70 15 10 70 15.5 13 12 80 14 13 90 11.5 14 90 11 15 40 17 22888 11 80 -0.46 Ⓒ -0.02 11.672 21.122 The coefficient of determination (2) is 0.767 -0.50 Total O 0.03 3.688 0.951 0.951 0.001 0.001 0.837 0.837 7.866 7.866 22.040 22.040 22.613 (34 - y)² 13.201 21.468 6.934 9.818 What is the price elasticity of demand at a price of 50 cents? 9.818 6.934 0.751 1.868 1.868 0.751 11.334 5.601 23.684 28.801 0.401 143.232 ▼
In automobile mileage and gasoline-consumption testing, 13 automobiles were road tested for 300 miles in both city and highway driving conditions. The following data were recorded for miles-per-gallon performance. City: 16.6 17.1 16.3 14.8 13.6 15.7 17.2 16.4 16.5 15.7 15.6 15.7 16.6 Highway: 20.0 21.2 18.9 19.2 19.8 18.0 17.8 19.2 19.6 21.7 20.0 19.1 19.3 Calculate the mean, median, and mode for City and Highway gasoline consumption (to 1 decimal). Highway Mean City Median Mode The data are bimodal: Make a statement about the difference in gasoline consumption between both driving conditions. The mean, median, and modal mileages are all better on the highway than in the city. and