Please see below the spending information pertaining to the participants of a hypothetical economy. C=$10+ 0.8Y I = $20 G=$30 X-M = $10 (a) State the name of the economic agent/participant that each equation above would apply to. (b) State the assumptions underlying the equations for C and I. Why do we make these assumptions? (c) Draw a graph to illustrate the desired aggregate expenditures of an economy whose participants have the spending plans provided above. (d) Calculate the value of equilibrium output.
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- 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?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?1. What is a market-clearing model? When is it appropriate to assume that market clear? 2. Use the model of supply and demand to explain how fall in the price of frozen yogurt would affect the price of ice cream and the quantity of ice cream sold. In your explanation, identify the exogenous and endogenous variables. 3. Consider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years. Goods Hot dogs Hamburgers Quantity (2010) 200 200 Price (2010) $2 $3 Quantity (2020) 250 250 Price (2020) $4 $4 Using 2010 data as the base year Compute the following statistics for each year. Nominal GDP, Real GDP, GDP Deflator, Inflation rate using GDP deflator, CPI, Inflation rate using CPI. (Hint: i) to calculate CPI use base year fixed quantity Hot dogs 200 and Hamburgers 200, ii) To calculate inflation rate, use percentage change in price level between two years.)
- Suppose that private savings and investment functions are given by: S = −c0 + (1 − c1)(Y − T) I = b0 + b1Y with G = T = 0. Assume 0 < b1 < 1−c1 < 1 (i.e. that slope of the savings curve is steeper than that of the investment curve). (a) Model Basics: Draw a graph of the investment=savings model with S,I on the vertical axis, and Y on the horizontal axis. Clearly label the 1) specific values of each intercept, 2) specific values of the slopes of each curve. (b) Suppose consumers choose to save more by reducing consumption at any given level of income, so that c0 declines. Show this on the graph. What are the effects of this change on 1) output, 2) the level of private savings, 3) the level of investment. (c) Briefly describe the economic intuition behind your results. Why is this called the paradox of thrift? (1-2 sentences is fine). (d) Deriving the Model: Show that the equilibrium condition Y = C + I + G implies I = S + T − GThe subtitle of the Commanding Heights series is “The Battle for the World Economy”. This episode is titled “The Battle of Ideas” and begins with the introduction of the two most important economists in the 20th century, John Maynard Keynes and Friedrich von Hayek. Keynes and Hayeks ideas were oppositional to each other, yet in the end, both men would have a profound impact in the world economy of the 20th century. Write a short essay of 1-2 paragraphs identifying the basic ideas of both men and explaining why Keynes dominated the early post WWII era and Hayek that late post WWII era. I need to write a short essay around 3 paragraphs1. 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…
- Economics: Public Economics Question: 1 Refer to Graph 2. Suppose the TANF program is established. What is the individual’s consumption if they spent all of their time in leisure? Do not include a dollar sign when writing your answer. Guess: 10,000 (with margin: 0) Question: 2 Refer to Graph 2. For every dollar earned by the individual below the cutoff (such that they are eligible for TANF), benefits decrease by how much? Do not include a dollar sign when writing your answer. Guess: 0.5 (with margin: 0) Question 3: Which of the following types of balanced budget requirements (BBRs) are least effective in restricting deficits? a. ex post BBRs b. neither ex ante nor ex post BBRs c. both ex ante and ex post BBRs d. ex ante BBRs Thank you for your help and support Academic Agent!Explain the relationship between these two formulas: Y = C + I + G + EX – IM S = (Y – T – C) + (T – G)This question is complete. The graph provides all the information. Use the graph to the right to answer the following question. Which of the following is not true according to the graph? A) Taxpayers in the top 1% of income levels paid more money in income taxes than they would have without the tax cuts. B) The treasury estimate if the share of tax cuts had not been enacted is 34%. C) Taxpayers in the top 1% of income levels paid a greater percentage of total federal income tax revenue than they would have without the tax cuts.
- Refresh your Math & Graphing Skills SOP-A D For each of the following scenarios, indicate whether the relationship between the two variables is positive or negative, as well as which line on the previous graph has a slope that reflects this type of relationship. X-axis Hint: The X-axis and Y-axis on the graph are not labeled intentionally. You need to substitute the variables from each scenario for the horizontal and vertical axis. For example, in the first scenario, X-axis should be labeled The average grade received" and Y-axis should be labeled "The number of hours spent studying". Scenario As the number of hours spent studying rises, the average grade received rises. As the number of hours spent studying falis, the likelihood of getting an A falls. As the number of hours spent watching TV rises, the average grade received falls. True True or False: Line B has a slope of infinity. O False www Relationship Line YThe following diagram shows two triangles. DISTANCE (Inches) 10 9 8 7 2 1 0 ← 0 1 2 3 5 4 6 DISTANCE (Inches) The green (upper) triangle has an area of 7 8 9 Đ 10 ? The purple (lower) triangle has an area of Place the orange triangle (square symbols) directly next to the green triangle so that the two triangles together make a rectangle. The total area of this rectangle is the area of the green triangle. which is1. 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).