Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 10, Problem 6WNG
To determine
Identify the autonomous spending.
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Chapter 10 Solutions
Macroeconomics
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.2 - Prob. 1STCh. 10.2 - Prob. 2STCh. 10.2 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.4 - Prob. 1ST
Ch. 10.4 - Prob. 2STCh. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Prob. 4QPCh. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 15QPCh. 10 - Prob. 16QPCh. 10 - Prob. 17QPCh. 10 - Prob. 18QPCh. 10 - Prob. 19QPCh. 10 - Prob. 20QPCh. 10 - Explain how to derive a total expenditures (TE)...Ch. 10 - Prob. 22QPCh. 10 - Prob. 23QPCh. 10 - Prob. 24QPCh. 10 - Prob. 25QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNGCh. 10 - Prob. 7WNGCh. 10 - Prob. 8WNG
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- Please answer fast please helparrow_forwardQUESTION 2 For an IS/LM model of an economy with the following equations: C = 200 + 0.8Yd | = 220 – 25i %D = 240 = 150 T= .2Y L = .1Y – 3i 125 The equations for the IS and LM (to two decimal places) are Y= 2168.4 – 69.5i and Y = 3i + 125 Y= 780 – 25i and Y = 30i + 1250 %3D Y= 2168.4 – 69.5i and Y = 30i + 1250 Y= 2168.4 + 69.5i and Y = 30i – 1250arrow_forward(1) What are the functions of the BP curve in the analysis of an IS-LM framework? Briefly discuss them. On an IS-LM diagram, what do points on, above or below the curve indicate?arrow_forward
- This question requires you to solve a macro model algebraically. Reading the appendix to this chapter will help you to answer this question. But, just in case, we lead you through it step by step. The equations for the model are as follows: i) C = c + MPC × YD consumption ii) I = I0 investment iii) G = G0 government purchases iv) T = tY net tax revenue v) X = X0 exports vi) IM = mY imports a. Step 1: Recall that Y D = Y – T. By using this fact, substitute the tax function into the consumption function and derive the relationship between desired consumption and national income. b. Step 2: Sum the four components of desired aggregate expenditure ( C, I, G, NX). This is the aggregate expenditure ( AE) function. Collect the autonomous terms separately from the induced terms. c. Step 3: Recall the equilibrium condition, Y = AE. Form the equation Y = AE, where AE is your expression for the AE function from part (b). (Your autonomous terms can be collectively labelled A and the terms that…arrow_forwardWhy do we have upward sloping LM curve? What does it shows? Derive the LM curve. Explain your answer using the diagrams.arrow_forwardAn economy is described by the following: C=20+0.9Y I=120-200r. Md=250+0.2Y-400r. Ms/P=1250 Y=70 W=17.5 Lf=144 a) Find AS and AD. b) Find the equilibrium level of Y and P c) Graphically represent this economy d) Find the long-run Y of this economy. e) What is the level of government expenses G, the government needs to impose in order to lead the economy to the full employment? (Show the long-run graphically).arrow_forward
- How do changes in consumer spending patterns impact the accuracy of short-term economic forecasting models?arrow_forwardConsider the following numerical example of the IS-LM model. C = 300 + 0.5(Y – T) – 1000i | = 150 + 0.2Y – 3000i G = 400 T = 100 + .2Y i = .05 (M/P)d= 2Y – 8000i a.Derive the IS relation. (Hint: You want an equation with Y on the left hand side and everything else on the right.) b. Solve for Y, given that the central bank has set interest rate at 5%. (Use .05 in the equation.)arrow_forwardUse the behavioural equations below and answer the questions that follow: C = R4 billion + c1YD = R19.7 billion Y= R13.1 billion T= R6 billion c0 = R13.5 billion i. Calculate the propensity to consume.arrow_forward
- The equations defining a simple model of the economy are : c=0.75y+18 and I =22 where C,Y and I denote consumption,national income and hence draw an accurate graph of C+I plotted against Y on the interval 0arrow_forwardUse the classical general equilibrium model WITH INVESTMENT and GRAPHICAL ANALYSIS to discuss the effects on the LEVELS of consumption, investment, GDP, the interest and the price level at time t of (a) A permanent DECREASE in the level of productivity (that is, a decrease in At and At+1) (b) A temporary DECREASE in the level of productivity (that is, a decrease in A; but not in A-1) (c) An ANTICIPATED DECREASE in the level of productivity (that is, a decrease in Ag+1 but not in A:)arrow_forwardWhat are some examples of changes in the economy that would lead to a movement along the IS curve? What are some changes that would shift the IS curve?arrow_forward
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