A 3-sector economic model was constructed and solved, and assuming the parameterstake on certain values, the multiplier matrix that is obtained is displayed in Table 1.You are required to answer the following questions by showing your calculation inthe space provided.Table 1: Multiplier MatrixExogenous VariablesEndogenous VariablesI*G*T*: Output: Consumption Expenditure 1.895: Tax RevenueY2.6312.631- 2.105C1.895- 2.316T0.2630.2630.789YD : Disposable Income: Government Budget2.3682.368- 2.8950.263- 0.7370.789Balance: Saving0.4740.474- 0.579(a) If autonomous investment is reduced by100, justify its precise impact ondisposable income and tax.Answer : AYD =AT =80, what is the amount of(b) If the govemment has increased its spending byautonomous tax that is required so that the govemment's action in increasing itsspending does NOT have an impact on the government's budget balance?Answer : AT* =

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A 3-sector economic model was constructed and solved, and assuming the parameters take on certain values, the multiplier matrix that is obtained is displayed in Table 1. You are required to answer the following questions by showing your calculation in the space provided. Table 1: Multiplier Matrix Exogenous Variables Endogenous Variables I* G* T* : Output : Consumption Expenditure 1.895 : Tax Revenue Y 2.631 2.631 - 2.105 C 1.895 - 2.316 T 0.263 0.263 0.789 : Disposable Income : Government Budget YD 2.368 2.368 - 2.895 0.263 - 0.737 0.789 Balance S : Saving 0.474 0.474 - 0.579 (a) If autonomous investment is reduced by 100, justify its precise impact on disposable income and tax. Answer : AYD= AT = 80, what is the anmount of (b) If the govermment has increased its spending by autonomous tax that is required so that the government's action in increasing its spending does NOT have an impact on the government's budget balance? Answer : AT* =

A 3-sector economic model was constructed and solved, and assuming the parameters take on certain values, the multiplier matrix that is obtained is displayed in Table 1. You are required to answer the following questions by showing your calculation in the space provided. Table 1: Multiplier Matrix Exogenous Variables Endogenous Variables I* G* T* : Output : Consumption Expenditure 1.895 : Tax Revenue Y 2.631 2.631 - 2.105 C 1.895 - 2.316 T 0.263 0.263 0.789 : Disposable Income : Government Budget YD 2.368 2.368 - 2.895 0.263 - 0.737 0.789 Balance S : Saving 0.474 0.474 - 0.579 (a) If autonomous investment is reduced by 100, justify its precise impact on disposable income and tax. Answer : AYD= AT = 80, what is the anmount of (b) If the govermment has increased its spending by autonomous tax that is required so that the government's action in increasing its spending does NOT have an impact on the government's budget balance? Answer : AT* =

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 7E

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The table below is the multiplier matrix of the 4 sector economic model. Exogenous Variables G* T* AND C T Even. YD M B AS S A 1.163 0.817 0.311 1.73 0.311 0.311 - 0.311 0.222 I* 1.163 0.817 0.311 1.73 0.311 0.311 - 0.311 0.222 1.163 0.875 0.311 1.73 0.311 -0.655 -0.311 0.222 - 1.094 -0.815 0.781 -1.875 -0.219 0.781 0.219 - 0.563 X* 1.163 0.815 0.311 1.25 0.311 0.311 0.547 0.222 a. Calculate the change of each endogenous variable value of the effect of AG* = 160 M* - 1.163 - 1.393 - 0.311 - 1.25 0.655 - 0.311 - 0.547 - 0.222 b. Calculate the net change in each value of the endogenous variable as a result of the simultaneous change, AX* = 200 and AM* = -150 c. AT* = 250; By how much does the government need to change G* so that the net effect of these 2 shocks (AT* = -250 and AG* which you calculated) so that AB = 0? d. Calculate the net change in each value of the endogenous variable as a result of the 2 shocks occurring in (c).
2. Question 2: Suppose that you estimate a model of the aggregate annual retail sales of new cars that specifies that sales of new cars are a function of real disposable income, the average retail price of a car adjusted by the consumer price index, and the number of sports utility vehicles sold (you decide to add this independent variable to take account of the fact that some potential new car buyers purchase sports utility vehicles instead). You use the data (annual from 2000 to 2014) and obtain the following estimated regression equation: CARS, = 1.32 + 4.91Y D; + 0.0012 PRICE, - 7.14 SUV (2.39) (0.00045) (71.40) 1 where CARS = new car sales (in hundreds of thousands of units) in year t, YD; = real disposable income (in hundreds of billions of dollars), PRICE = the average real price of a new car in yeart (in dollars), SUV = the number of sports utility vehicles sold in year t (in millions). You expect the variable YD to have a positive coefficient and the variables PRICE and SUV to…
Suppose that Y=MX+b, where Y=consumption, b=consumption at zero income, M=slope, and X=income(i) Are Y and X positively related or are they negatively related?(ii) If graphed, would the curve for this equation slope upward or slope downward?(iii) Are the variables Y and X inversely related or directly related?(iv) What is the value of Y if b=10, M=.50, and X=200?(v) What is the value of X if Y=100, b=10, and M=.25?
C. Suppose your neighbor is a physics major who also races motorcycles, and she tells you that horsepower can be expressed in terms of the following equation: H = MDA/S where M=mass, D-distance, A=acceleration and S and H are as defined above. Based on this conversation with your neighbor, you decide to change the functional form of the relationship to include 1/H rather than H as an explanatory variable because that's the appropriate theoretical relationship between the two variables. Estimate the above equation, substituting 1/H for H. Which of the two models do you prefer and why?
Question: Suppose that the marginal cost of extracting a non-renewable natural resource is MXC(Q) = 10 and the marginal beneÖt of using the resource are MB(Q) = 90Q. In the context of a static model, address the following question: Calculate the efficient value of Q if the total stock of the natural resource is Q = 50: Provide a graphical representation of the solution. My Note: This is my first time resubmitting, I was told to confirm that MXC(Q) =10 is the correct form of the Marginal cost of extraction to answer this question correctly. I'm not sure but this is the way my professor asked his question.
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1. Suppose that an equation for infant mortality is described by the function: i= Y()". where i is the infant mortality rate (expressed in per 1,000 children), Y is the gross domestic product (in US dollars), P is the population, and B and b are constants. d. Assume that b = 492.7 and ß = 0.2. Derive a specific linear equation on the relationship of i and y from the linear equation in (a). Interpret the slope coefficient. Using the equation in (d), compute for the infant mortality rate given that a GDP per capita of $3, 650 and of $4, 100. e. f. If GDP per capita GDP increases from $3,650 to $4, 100, estimate the percent change in infant mortality rate by using the computed values in (e). g. If GDP per capita increases from $3,650 to $4, 100, estimate the percent change in infant mortality by using the elasticity in the equation in (d). Compare this result to that in (f).
3. Suppose that you are interested in answering the question of how consumption reacts to tax increases. In recent years, government has imposed tax increases to fund increased infrastructure spending. If you could design an ideal experiment to answer this question, how would you do so? Do you think it would be practical to use this experiment on a large scale?
1. The Grossman model uses the economic concept of a production function. Before you dive deeply into the Grossman model though, I want you to think more generally about the concept of a production function as it relates to health status. A production function describes the relationship between inputs and outputs for a production process. For a business, the inputs are labor, capital, raw materials, etc. and the output is the finished product. The production function is often describe mathematically using an equation like the one below: Y = K¹/3L2/3 Where Y is the amount of output from using K units of capital and L units of labor. a. Now consider a production function for something very different: in the United States. That is, consider a average life expectancy production function where Y = life expectancy measured in years. What do you think are the primary inputs? That is, what are the variables on the right-hand side of the equation? Hint: think broad categories...and there are…
A tax on gasoline is proposed in order to raise money for the pollution-control activities of several public agencies. The tax will be 10¢ per gallon, and last year 10.3 million gallons of gasoline were used by motorists (this is strictly an illustrative number). Does this mean that we can anticipate $1,030,000 in revenues from this tax? Explain and use a graph to answer this question.
Which one of the following statements is FALSE?(a) There are four broad groups of decision‐making units in the economy:households, firms, government and the foreign sector;(b) Savings are an important injection into the circular flow of income andMultiple‐choice questions: Select one correct answer for each of the following. In your answer booklet, write down only the number of the question and next to it, the letter of the correct answer.spending in the economy;(c) Taxes are a leakage or withdrawal from the flow of income and spending in the economy;(d) Spending by households on consumer goods and services is calledconsumption spending.
6 05:09 12:07 AM.. 51.8KB/s, 0 VPN talll 3 73) = Chegg Time remaining: 00:09:56 Economics In the budget presented by the Government, far reaching tax rebates are provided to all classes of tax payers. A researcher therefore conducts survey to examine whether these tax reductions have led to a change in the consumption patterns of various social classes in the country. What kind of study would this fall under. Explain your answer Answer Skip Exit