The aggregate demand curve is represented by which of the following equations? O a) AD - Price level + Real GDP O b) AD - Unemployment + Inflation O9 AD = Consumption Spending + Investment Spending + Government Spending + Net Exports d) AD Wages+ Rent + Income O e) AD - Nominal Income + Real Income
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- 7. We ran a Vector-autoregresive model with two variables: with dtrade (change in trade balance), doilpr (change in oilpr) with one-lag and the result is as follows: dtrade 1st Lag of Trade Balance 1st Lag of Oil Price doilpr 1st Lag of Trade Balance 1st Lag of Oil Price Coef 0.48 275 0.04 1291 0.02 2939 0.35 7591 Std. Err 0.04 2789 0.02 1304 0.09 2198 0.04 5904 Z- statistic 11. 28 1.9 4 0.2 5 7.7 9 P>| zl 0 0.0 53 0.8 04 0 a) What can you infer from the result? b) Can you say anything about the long-run equilibrium value for change in trade- balance given the result?Question 2 The Personal Consumption Expenditures Price Index (PCEPI) is design to reflect Oonly prices faced by consumers in their purchases with discretionary income O only prices faced by consumers for essential goods and services Oonly prices faced by consumers for personal entertainment all prices faced by consumers2) Below is the Table showing the annual gross electricity demand (TW.h) of Turkey versus gross dom product a) Draw gross domestic product versus electricity consumption and find the equation of the line by the graphical method (be careful determining the dependent and the independent variables) b) By using the equation you have found, predict the electricity demand when GDP becomes 2500 billion $. Year GDP (billion S) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 800 928 1024 1120 1094 1250 1433 1532 1691 1861 1966 2040 2186 gross annual electricity consumption (TWh) 161 175 190 198 194 210 230 242 246 257 266 279 295
- 13. List the basic trend patterns within the projection methods and determine which is the most commonly used when analyzing demand.The Canadian economy produces a vast array of goods and services, from cars to cannabis Suppose that the hypothetical data for Canada has the folowing national income account data in billions of dollars: govermment purchases (SLOSO personal consumption expenditures (S4800 impors ($370 exports (524OE gross inventment (SL3O) Personal consumption expenditures are approximately what percentage of this economy? Mutple Choic O 70 percent O 60 percant O s percere 75 percentConsider the following actual and forecast demandlevels for Big Mac hamburgers at a local McDonald’s restaurant:DAY ACTUAL DEMAND FORECAST DEMANDMonday 88 88Tuesday 72 88Wednesday 68 84Thursday 48 80FridayThe forecast for Monday was derived by observing Monday’sdemand level and setting Monday’s forecast level equal to this demand level. Subsequent forecasts were derived by using expo-nential smoothing with a smoothing constant of 0.25. Using this exponential smoothing method, what is the forecast for Big Macdemand for Friday?
- What are the factors other than price that can shift aggregate demand curve interms of investment and consumption? Also explain graphically.Question 1 The Consumer Price Index (CPI) is designed to reflect O only prices faced by consumers in their purchases with discretionary income O only prices faced by consumers for essential goods and services O only prices faced by consumers for personal entertainment O all prices faced by consumers Question 2 The Personal Consumption Expenditures Price Index (PCEPI) is design to reflect Oonly prices faced by consumers in their purchases with discretionary income Oonly prices faced by consumers for essential goods and services Oonly prices faced by consumers for personal entertainment. all prices faced by consumers TI Att 9== 2. Consider an IS/LM model of an economy with the following equations:C = 300+ 0.6Ydl 100 5iG 200TR = 200T 200T = 0.1YL = 0.4Y 30iM/P = 500(a) Using the above data, derive the equation for the IS schedule. (b) In this example, what is the equation for the LM schedule? (c) Using simultaneous equations calculate the equilibrium level of income and interestrates. Sketch the IS/LM equilibrium position. (d) What are the values of the monetary policy multipliers with respect to income andinterest rates? If the money supply is increased by 30, what are the new market clearing income and interest rate levels?
- Price level AD2 AD1 Real GDP Refer to Figure 13-1. Ceteris paribus, a decrease in personal income taxes would be represented by a movement from O AD1 to AD2- O AD2 to AD1- O point B to point A. O point A to point B.2) Below is the Table showing the annual gross electricity demand (TW.h) of Turkey versus gross do product a) Draw gross domestic product versus electricity consumption and find the equation of the line by the graphical method (be careful determining the dependent and the independent variables) b) By using the equation you have found, predict the electricity demand when GDP becomes 2500 billion S. Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GDP (billion $) 800 928 1024 1120 1094 1250 1433 1532 1691 1861 1966 2040 2186 gross annual electricity consumption (TWh) 161 175 190 198 194 210 230 242 246 257 266 279 29519-Which of the following depicts autocorrelation (serial correlation)? O a. Cov(ut, us) = 0 for all t #s b. Cov(ut, us) 0 for all t s c. Cov(ut, us) =0 for all t= s O d. Cov(ut us) 0 for all t=s 20- If OLS is used in the presence of autocorrelation, which of the following will