Consider a Keynesian IS-LM model for national income: Y = C(Y−T) + I (r) + G L(r,Y)= M³ IS: LM: where we consider Y and r as the endogenous variables and G, M³, and T as the exogenous variables. (a) Find the effect of a lump-sum tax, T, change on Y, i.e., OY/OT, using the implicit function theorem.

Consider a Keynesian IS-LM model for national income: Y = C(Y−T) + I (r) + G L(r,Y)= M³ IS: LM: where we consider Y and r as the endogenous variables and G, M³, and T as the exogenous variables. (a) Find the effect of a lump-sum tax, T, change on Y, i.e., OY/OT, using the implicit function theorem.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 9SQP

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2. Consider a Keynesian IS-LM model for national income: Y=C(Y-T) + I (r) + G L (r,Y)= M³ (b) IS: LM: where we consider Y and r as the endogenous variables and G, M³, and T as the exogenous variables. Find the effect of a lump-sum tax, T, change on r, i.e., Or/T, using the implicit function theorem.
1. Consider the following simple Keynesian model, (i) Rewrite the model into matrix form with Y, C and I as endogenous variables and Go and i as exogenous variables. (The coefficient matrix must be a 3 by 3 matrix.) Y=C+I+Go C = 200+ 0.8Y I= 1000-2000 (ii) Compute the equilibria Y*, C* and I* as functions of Go and i using Cramer's rule. 8Y* (iii) Find and di ƏY* ƏGo (iv) Give an economic interpretation of national income? ƏY* " ƏGo what should the government do if it wants to raise
Course: Macroeconomic - IS-LM Model PROVE MATHEMATICALLY the following: Given an increase in the proportional tax on income(t), what happens to the level of output and to the tax? Hint: remember Consumption Function (C = A + c Yd), where Yd = Y - tY + TR (t is proportional income tax in %)
2. For simplicity, we normally treat aggregate tax payments (T) as determined by politics or other factors unrelated to output. However, suppose that aggregate tax payments are proportional to income. That is, T=t·Y, where tis the marginal tax rate and is between o and 1. a. How, if at all, would this change in our assumptions affect the Keynesian cross diagram? b. Would this change increase, decrease, or have no impact on the multiplier effect, or is it not possible to tell? (That is, how would the effect of a given vertical shift of the planned expenditure line compare with what it was before?)
2. Consider a Keynesian IS-LM model for national income: Y=C(Y-T) + I (r) + G L (r,Y)= M* where we consider Y and r as the endogenous variables and G, M, and T as the exogenous variables. Given: IS: LM: Implicit function theorem • Implicit function theorem. - Consider an equation F(x1,..., Xm. y) = 0. If an implicit function y = f (x1,...,xm) exists, then the desired derivatives can be found by Question: (b) ду Əx; ƏF/Əx; ƏF/Əy Find the effect of a lump-sum tax, T, change on r, i.e., Or/OT, using the implicit function theorem.
En Santiago, la oferta y demanda del sector automotriz son Q. = 60 + 5P (Oferta) Qp = 120 – 7P (Demanda) A) ¿Cuál es el equilibrio de mercado? B) Ahora suponga que la demanda del sector automotriz disminuye en 30 unidades, ¿Cuál es el nuevo punto de equilibrio? C) Represente su respuesta en un gráfico letra A) y B). D) Considerando el caso inicial, si el gobierno fija un precio máximo de $10, ¿Qué sucederá en el mercado? E) Considerando el caso inicial, si el precio es $3, ¿Cuál es la elasticidad de la demanda? ży si el precio es 12?
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Ts assume that in the model of national economy household consumption is C = 300 + 0.9*DI, companies' gross vestment is Ig = 200, but government expenses are G = 250, while the sum of taxes collected by the government iS -150. Taking into account that disposable income DI =Y-T, calculate: a) Equilibrium level of income Y; b) Calculate the value of Marginal propensity to consume and value of Marginal propensity to save; c) Private consumption at macroeconomic equilibrium%3; d) Develop equation of saving and calculate amount of saving at the point of equilibrium level of income.
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option C is incorrect Use the Keynesian cross model to predict the impact of an increase in government purchases on equilibrium GDP. State the direction of the change and give a formula for the size of the impact. O An increase in taxes shifts the planned expenditure function downward. The change in income is given by AY= AY=. O An increase in taxes shifts the planned expenditure function upward. The change in income is given by -MPC 1-MPC ΔΥ= -MPC 1-MPC AY= O An increase in taxes shifts the planned expenditure function inward. The change in income is given by XAT 1 1-MPC XAT 1 1-MPC O The direction of the shift is undetermined without knowing the slope of the PE function. The change in income is given by XAT XAT
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