Consider the following Model (notation is standard): C=c(y-τ) I=i(r) y = C+I+G Md/P = L(y, r) Md= Ms=M y = f(n) n = h(W/P) f´(n) = W/P Calculate the effects of a change in τ on C, I, r, y and P.
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Consider the following Model (notation is standard):
C=c(y-τ) I=i(r) y = C+I+G Md/P = L(y, r) Md= Ms=M
y = f(n) n = h(W/P) f´(n) = W/P
Calculate the effects of a change in τ on C, I, r, y and P.
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- M7Consider the following Cobb-Douglas production function for the bus transportation system in a city: Q = Lβ1Fβ2Bβ3 Where L = labour input in worker hours F = fuel input in gallons B = capital input in number of buses Q = output measured in millions of bus miles Suppose that the parameters (α, β1, β2 and β3) of this model were estimated using annual data for the past 25 years. The following results were obtained: β1 = 0.45, β2 = 0.20 and β3 = 0.30 a. Determine the (i) labour, (ii) fuel, and (iii) capital-input production elasticitiesWhat conditions must non-linear time series models, such as vector autoregressive models, satisfy in order to use impulse response functions