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COURSE:
Refer to 2 different models (and/or conditions) under which an increase in the amount of money circulating in the economy has a NULL impact on GDP. Then, refer to 2 different models (and/or conditions) under which an increase in the amount of money circulating in the economy has a MAXIMUM impact on GDP. EXPLAIN very briefly the mechanism by which each model generates that NULL or MAXIMUM impact on GDP.
Hint: 2 conditions under increase of M (money) and how impact null (zero) and maximum on GDP. Example, considering both fiscal or
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- Name some factors that could cause the SRAS curve to shift, and say whether they would shift SRAS to the right or to the left.COURSE: MACROECONOMICS - IS-LM MODEL Comment on the following statements:1.- Changes in government spending will have a greater effect on output when the demand for money is very sensitive to changes in the level of output. Graph 2.- Demonstrate under the assumptions of the IS-LM model the effect of having a consumption function with an exogenous component, an income-dependent part and a part that depends on the interest rate. Graph6.1.What is an AD-AS model and what does such a model as per the givendiagram essentially focus on?6.2.Discuss the diagram in detail by first explaining what leads to step Step 1(representing a shift in curves on the diagram) and indicating what occursto cause shifts in some of the curves. Then discuss Step 2 (whichrepresents other macroeconomic changes) and indicate what happens toother variables when there are shifts in some of the curves as per Step 1. 6.3.What, in general, do the points of intersection between the AS and AS2curves and the AD curve show?6.4.When the LAS curve moves to the right to LRAS2, what exactly do thepoints of intersection between the AS and AS curves and the AD1 curve,indicated as point 1 and point 2, reflect on the diagram?
- Course: Macroeconomic - IS-LM Model Prove mathematically the following: Given an increase in the proportional tax on income(t), what happens to the level of output and to the tax?" . Hint: for demostration, use the IS general function for a closed economy Y = C + I + G, where C = a + c*YD and YD = Y + TR - Y*t (where t = proportional income tax) and realize changes i.e., from "t1" to "t2"The figure below shows a simple macroeconomic consumption model. The letters N and D indicate curves, the letters T, A, L and Q denote (intersection) points. The "auxiliary triangles" marked in burgundy mean that if the value of the horizontal section shown in them is considered to be 1, the value of the vertical sections is s and r, respectively. It is known that L is 100 and ris 0.75. T 45° A 1 Give the equation of the savings function: S= (use a decimal point and 2 decimals if needed, and write capital letters as an unknown variable) How much is the value of A on the X axis?"The following chart indicates the aggregate demand (AD) and short-run aggregate supply (SRAS) schedules of decision- makers for the current period. Both buyers and sellers previ- ously anticipated that the price level during the current period would be P 105 a. Indicate the quantity of GDP that will be produced during this period. b. Will it be a long-run equilibrium level of GDP? Why or why not? c. What will the relationship between the actual and natural rates of unemployment be during the period? Explain 20 your answer.
- I have to analyze, using the IS-LM model, the macroeconomiceffects of an increase in savings in the short term and its implications for long-term growth. Specifically, I have to suppose that households (consumers) lose confidence and start saving more for any level of disposable income. Can you plase answer the following question (using graphs too): In terms of total savings and, therefore, of potential long-term growth, is a flat LM curve or a positive sloping LM curve better?In the 1970s a common practice was to estimate a distributed lag modelrelating changes in nominal gross domestic product (Y) to current andpast changes in the money supply (X). Under what assumptions will thisregression estimate the causal effects of money on nominal GDP? Arethese assumptions likely to be satisfied in a modern economy like that ofthe United States?Suppose the following equations represent an economy. What is the multiplier for thiseconomy?Z = C + I + G C = 400 + .5YD YD = Y - T T = 400I = 200 G = 1800a. 0.5.b. 1.c. 1.5.d. 2.e. none of these.
- 1. Consider the following simple Keynesian model, (i) Rewrite the model into matrix form with Y, C and I as endogenous variables and Go and i as exogenous variables. (The coefficient matrix must be a 3 by 3 matrix.) Y=C+I+Go C = 200+ 0.8Y I= 1000-2000 (ii) Compute the equilibria Y*, C* and I* as functions of Go and i using Cramer's rule. 8Y* (iii) Find and di ƏY* ƏGo (iv) Give an economic interpretation of national income? ƏY* " ƏGo what should the government do if it wants to raiseplease answer as detailed as you can Q. What is the difference (if any) between macroeconomic equilibrium and expenditure equilibrium ?COURSE: MACROECONOMICS - IS-LM MODEL Demonstrate under the assumptions of the IS-LM model the effect of having a consumption function with an exogenous component, an income-dependent part and a part that depends on the interest rate. Graph
