EBK MACROECONOMICS
4th Edition
ISBN: 8220103648165
Author: KRUGMAN
Publisher: MAC HIGHER
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Chapter 10, Problem 14P
To determine
Concept Introduction:
Financial System: It is a system where all the borrowers and lenders exchange their financial assets.
Investment Spending: All those spending’s which are done on physical capital which means that only expenses that increases an economy’s level of physical capital is known as investment spending.
Budget Balance: The budget is considered to be balanced when revenue collected from tax and expenditures made by the government are equal. When it is a deficit it is represented by a negative value, when it is a surplus it is represented by a positive value and in case of a balanced budget it is zero.
Net Capital Inflow: It is the total amount of incoming of all the financial assets into a country which is then deducted from the total outgoing of financial assets out of a country.
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Exercise 5Consider the demand and supply functions for the notebooks market.QD=10,000−100pQS=900pa. Make a table with the corresponding supply and demand schedule.b. Draw the corresponding graph.c. Is it possible to find the price and quantity of equilibrium with the graph method? d. Find the price and quantity of equilibrium by solving the system of equations.
1. Consider the market supply curve which passes through the intercept and from which the marketequilibrium data is known, this is, the price and quantity of equilibrium PE=50 and QE=2000.a. Considering those two points, find the equation of the supply. b. Draw a graph for this equation.
2. Considering the previous supply line, determine if the following demand function corresponds to themarket demand equilibrium stated above. QD=.3000-2p.
Supply and demand functions show different relationship between the price and quantities suppliedand demanded. Explain the reason for that relation and provide one reference with your answer.
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