Circular Flow Model Expand on this simple model by suggesting at least 2 ways in which the government, the rest of the world, and/or financial markets can be linked with the other parts of the model. ( For example, taxes can flow from households to the government).
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- Explain in detail what are Computable General Equilibria Models?In economics the circular flow model illisytates whatUESTION 5 Suppose the parameters of the Romer model take the following values: A=10, 7 =0.01, 7=1/500, and L= 100,000. what is the growth rate of this country's economy? OA. 0.2 percent O B.2 percent OC. 200 percent O D.20 percent LC 100ml U R - Eter G H D Look B N M rol Alt Al Contral Ann
- In the circular flow model an example of a government spending flow would be collecting taxes building roads collecting interest O paying wages1. Explain the relationship of each factor of the circular model.2. Illustrate/paste/ draw/ provide a photo of both the simple and complex circular flow model.2. Briefly discuss the flow of each model.Why is the circular flow model important?
- Table 1: Rainfall and GDP growth Rainfall growth GDP growth Country Egypt Egypt Year 2000 Quarter1 2001 Quarter 2 2000 Quarter 1 2001 Quarter 2 | 2000 Quarter 1 -1 1 Moгоссо -2 -1 Morocco 4 3 Algeria 3 Source: World Weather Data a. Critically discuss the type of data provided in Table 1. b. Write the theoretical equation that estimates the effect of Rainfall growth on GDP growth. Calculate the parameters of the ordinary least squares model. Interpret your results. c. Calculate the correlation coefficient and critically discuss the difference in interpreting this coefficient and the OLS parameters. d. We assume a model where the linear line starts from the origin. Re-derive the slope in this case.1) Explain how a model has helped you solve a problem. Define the model and explain the problem it helped solve. 2) Use the space below to draw a circular flow diagram.What would be the impact of changing the determinant variables given in the first column (below) on Government Spending? Factors affecting Govt. Spending Effect on Government Spending Government prepares for election Economy at the recession phase of business cycle Low level of poverty More need for merit goods No need for further infrastructure Less population Economy is at the boom phase of business cycle
- Life expectancy 2000 1000 1000 a) Suppose you have country-level data for 100 countries, and you want to estimate the effect of real GDP pder capita (GDP) on life expectancy (LIFE). You suspect that there is a structural change in the relationship between GDP and LIFE which occurs when GDP per capita is $5,000 (think rich vs poor countries). How would you test for this structural break using 1) dummy variables and 2) the Chow test? Write down the regression equations (including other control variables), the null and alternative hypotheses, test statistics, degrees of freedom and any other details you think are important. Would the Chow test and dummy variables approach give you the same answers? Discuss. b) You plot the data with LIFE on the y-axis and GDP on the x-axis: 2500 Breakpoint 5000 GDP per capita 7500 Does the scatter plot indicate anything which could be problematic for your regression results? How would you (formally) test this problem? How would you fix it?I. EOQ Model Suppose during your college life, every year you need $5,000 cash to spend in addition to the studying expenses. Each time in need of cash, you decide to go to the bank for that. And the transportation costsyou $5 (assumed amount) of going to the bank and coming back. Assume that the current saving/checking link account has an interest rate of 5%. Please find the optimal solution of the amount of cash each time for the withdraw.1. 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…